How to Reduce and Manage Cloud Costs

Development Sep 12, 2019

How to Reduce and Manage Cloud Costs

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Companies 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.

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:

Monitor & 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 the this matter may fluctuate. Constant, systematic monitoring of all provider, server, and app processes allows 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

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:

  1. Autoscaling - only a certain part of resources is being employed for particular activities. Depending on the specifics of every other business, two major business activity-driven ways to save can be defined:

    • seasonal economy - most relevant for retail businesses when sales spikes can be forecasted and depend on the time of year (Christmas holidays, summer vacations, etc);

    • daily economy - when the maximum rates of demand take place during certain hours while the rest of the time it is mostly downtime.

  2. Cloud computing - cloud cost reduction opportunities here lay in that you don’t need to purchase any hardware or software, you can just rent the needed space from a specialized provider. And if you don’t need any excessive space at the moment, you don’t have to pay for it. Rented cloud servers are also available for any point of the world, which enables you to rent cloud storages by lower tariffs.

  3. Containers - small virtual machines containing microservices that are activated upon request and are unloaded from the virtual memory if there is no initial need in them. Numerous companies went and rewritten existing architectures to fit them;

  4. Clusters - to step the game with the containers further up, you can employ tools like Kubernetes and manage clusters that control multiple containers simultaneously. Within large infrastructures, Docker and Kubernetes often perform in combination. Databases may also be organized into these clusters for higher fail-proof ability.

  5. Cloud cost management software - products that are usually intended to optimize the data storing routines and to remove obsolete and sine elements from the storage.

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% cloud expenses.

Discounts for instances

Employing providers’ discounts, you get another great ability to reduce cloud expenses. 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 does the costs of maintaining it, which may reach with time 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 storing 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 an ability to use employ them to the fullest.

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 factor on the final results.

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.

Summary

Increasing profitability by reducing expenses is an 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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