DevOps Jun 15, 2020

How to Reduce Cloud Costs and Manage Them in 2021

Jane Vyshnova

CEO

Author

Content

  1. Things to Know Before You Start Cloud Cost Reduction
  2. Why Consider Cloud Cost Optimization
  3. Monitor and Forecast Spendings
  4. Optimize Infrastructure by Following Cloud Cost Optimization Strategies
  5. How to Reduce Cloud Costs
  6. How to Control Cloud Migration Costs
  7. Virtual Server vs Cloud
  8. Automate Processes
  9. Cloud Cost Optimization Tools for Amazon Web Services
  10. Summary
Content

Сompanies of all business types increasingly tend to consider cloud opportunities as a way to save the budget, to provide even more flexible and high-quality services, and to virtualize the business overall. On top of all that, cloud-based digital infrastructures are highly secure and accessible from any point one may be situated at. However, reducing cloud costs often becomes an issue to consider. In this article, we cover best practices and tips on how to reduce cloud costs.

Things to Know Before You Start Cloud Cost Reduction

In recent years, the issue of proper cloud spend management is of special relevance for most users. IT teams must be able to thoroughly optimize expenses in local, cloud, and SaaS systems to save resources.

Here are a couple of key cloud trends from the RightScale 2019 report that point out the ultimate importance of efficient cloud expense management:

Why Consider Cloud Cost Optimization

A large quick and unexpected change in business activity for a greater part of the global economy is a result of the COVID-19 pandemic impact. Among a few results of it are some markets just as work from home services and tools, a large workload of healthcare and grocery retail as well as social media apps, but their income from advertising may be affected. Also, multiple businesses in travel, manufacturing, and entertainment were closed because their personnel have been in lockdown.

Datacenter-based IT costs are mainly fixed but cloud costs are intrinsically changeable and can be sized according to needs. During the tough times, a focus on cost optimization can also significantly cut cloud costs.

Monitor and Forecast Spendings

Cloud computing expenses are among the most significant budget articles for many companies out there. The thing is, it’s difficult to predict the final cost of server rental before the cloud architecture is established. The budget in this matter may fluctuate. Constant, systematic monitoring of all provider, server, and app processes allows it to be prepared for critical overload moments.

Thus, you get to conveniently pinpoint the aspects that require optimization and further constant monitoring, which include:

Optimize Infrastructure by Following Cloud Cost Optimization Strategies

Unnecessary IT expenditures are not new to pose issues to the global community. Startups that purchase quite large infrastructures of data centers several years in advance are especially susceptible to this one. They need to pay special attention to this issue, otherwise, serious downtimes may have to be handled.

In the conditions of a limited budget of starting-up projects, cloud cost optimization strategies can help not only to keep one’s head above the water but also to grow into a full-blown business. You can employ the following key expense optimization opportunities:

How to Reduce Cloud Costs

Among the major cloud cost management tools in the company, should be knowledgeable in-house handling of resources and powers’ optimization. There are three major ways to save cloud expenses: instances, discounts, and data storing.

Instances

Virtual machines or instances are most expense-intensive, taking up 55% of total expenses. Therefore, efficient cloud cost management should start exactly with them, step-by-step as follows:

  1. Excessive resources. Over 40% of instances are twice, thrice bigger than is needed at the workload. The efficiency boost allows reducing up to 30% of virtual machine expenses and over 15% of cloud costs.

  2. Downtime. Many resources operate 24/7, even if they are factually used only on workdays. Scripts that activate cloud services in the 12-hour workday and five-day week mode allow for reducing over 60% of expenses in the matter. If you timely disable resources upon finishing stretches of time-based projects (presentations, demonstrations, etc.), you get yet another expense optimizing tool.

  3. High pricing. According to your selected type of instance, you can switch regions to save. For AWS in the USA, for example, South California is more expensive than Oregon while for Azure, prices differ for several virtual machine families located on the East Coast.

  4. Updates. Suppliers offer new types of instances that are more productive and economic than the existing ones. Implementing progressive options allows for saving up to 5% of cloud expenses.

Discounts for instances

Employing providers’ discounts, you get another great ability to reduce cloud expenses. The conditions and sizes of their representation may differ, but the assignment principles are quite similar.

Discounts for instances

Image source: Habr

Consider the rules and abilities to offer discounts on the example of several major providers:

  AWS Azure Google
Type Instance reserve Sustained Use Discounts (for the period of use), Committed Use Discounts
Period one or three years
Discount size up to 75%   up to 55%
Changes Standard: change of zone or type of network. No ability to switch region or machine family Convertible: any customizations Any changes Changes in network type and machine family. Inability to switch region
Refund Independent sale Refund for 12% of payment No supported

Data storing

As the storage grows, so do the costs of maintaining it, which may reach up to 25% of cloud storage expenses. There are a few key methods to optimize data-related expenditures.

  1. Unattached drives. Drives attached to a virtual machine often stay in place even after the machine is deleted. As it accumulates, data attached to the instances start to take up a significant volume of storage and require to be detected and removed manually by an admin.

  2. Old snapshots. Immediate copies frequently aren’t removed. It’s efficient to delete such elements upon the end of necessary terms of storage set up by a company.

  3. Expensive options. Inexperienced users can often select pricey reserving, operating frequency, and drive options, like SSD and HDD, without the ability to use them to the fullest.

How to Control Cloud Migration Costs

As the remote workforce has become a new standard in no time while making cloud migration more crucial followed closely by cost management. The number of companies that are thinking or in the process of moving their applications to the cloud, is greatly increasing. However, the cloud migration costs are quite high and the process could eat up a large part of the budget.

According to recent research, over 50% of the companies consider cost as the most significant pain point during migration to the cloud. It is important to note that apps created for on-prem behave differently on the cloud. It needs more attention while starting the migration process for restructuring the application for the cloud environment.

Here is a list of crucial aspects that should be taken into account while controlling cloud migration costs:

  1. Start well - you should make sure you are selecting a suitable size for your cloud infrastructure;

  2. Benefit from the assistance of expert;

  3. In case of having stable and predictable workloads, utilize reserved specimens;

  4. Provide an integrated approach during your migration scheduling;

  5. Tools of cost controlling that may be helpful.

Virtual Server vs Cloud

Virtual Server vs Cloud

Image source: Spark

An optimal choice of one or other type of storing depends on two crucial factors: the need and the provider’s offer. The key differences between the major types of hosting are as follows:

Criterion VDS/VPS Cloud
Payment Advance fixed payment Per actual usage
Configuration Mostly, only one server Server cluster
Reliability Average - one OS for all machines High - distributed server cluster structure
Accessibility of customizing virtual machine parameters Difficult - a machine has to be reloaded and re-established so that parameters can be customized Simple - parameters can be customized in real time without stalling any processes
Limit of capabilities At the most - configuration of a server (cluster) excluding virtualization resources
Pricing Average High
Data storing In a RAID-array configured by a provider or client Double data replication in data storage systems Source

Automate Processes

One of the major cloud cost optimization tools to highlight as well is automation that helps to dramatically boost the efficiency of managing finances, security, and operations. Small, recurring tasks should definitely be automated. In this aspect, pay attention, primarily, to:

With the required tools, one data center operator is able to manage thousands of virtual machines. Such an approach allows not only for efficient cloud cost optimization but also for increasing business flexibility and lowering the influence of human factors on the final results.

The point solution of issues in managing cloud expenses is, unfortunately, of low efficiency. Companies tend to choose DevOps outsourcing to hire experts offering a complex approach to minimizing expenditures: analysis and subsequent implementation of the best project infrastructure optimization solution with further support.

Cloud Cost Optimization Tools for Amazon Web Services

Cloud services and particularly Amazon Web Services come with multiple resources and functions to improve your experience, but at the same time, they could be a little bit expensive.

Taking into account all their features, different Amazon Web Service cost optimization tools can be divided into two large groups.

To predict the cost of cloud services that are provided by the Amazon Web Services platform effectively could be difficult.

The list of AWS cost estimation and optimization tools that will help you effectively and seamlessly manage your costs includes:

Summary

Increasing profitability by reducing expenses is the ultimate goal of any business. Managing cloud expenses reasonably requires the selection of the most optimal service provider and constant monitoring of efficiency in employing the existing resources.

All the highlighted above points, despite the seeming simplicity and logic, require a good share of experience to be implemented properly. Contact our DevOps experts right now to avoid numerous errors and keep each detail that can help accelerate the establishment and further growth of your business in check.

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