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One of the reasons that many organizations are attracted to cloud computing solutions is the promise of cost savings. But simply shifting an on-premises computing environment to a public cloud provider may not achieve the desired economic benefits. A move that was intended to save money can end up being more expensive if not done carefully.

Cloud cost optimization is the process of reducing cloud spend with a methodical approach that eliminates waste, identifies mismanaged resources, and takes advantage of provider services that are designed to reduce overall expenses. You need to remember that a cloud provider is charging you for the contracted resources whether or not they are being used. 

Methods of Saving on Cloud Resources

One methodology that can be used to control cloud costs is the six pillar approach. It identifies six aspects that go into obtaining and using cloud resources cost-effectively. We are going to look at three of them. 

  • Reserved instances (RIs) are offered by the major cloud providers and allow an enterprise to more accurately estimate usage and acquire resources at substantially reduced rates. A factor that needs to be considered is the percentage of your cloud presence you want to be covered with reserved instances. Exploring the RIs that are available and managing them centrally across the organization is an excellent starting point when looking for ways to trim cloud computing costs.  
  • Auto-parking addresses the problem of terminating cloud services or instances when they are no longer in use. The practice of auto-parking shuts down resources during off-hours. You need to identify resources that can be parked, such as test and development systems over the weekend. Only paying for systems and services when they are needed can substantially reduce cloud costs.  
  • Storage requirements can fluctuate wildly depending on the organization and the savings anticipated by eliminating on-premises hardware can quickly evaporate. It’s easy to just provision more storage as needed but that can result in exorbitant and unexpected bills. You will likely be charged based on the amount of storage you need, the bandwidth required for data transfers, how often data is retrieved, and the time constraints on retrieval requests. Understanding your data lifecycle policy can help reduce the costs while still providing the space to satisfy enterprise demands.  

Tools for Optimization 

There are vendor-specific and third-party tools that can help organizations optimize cloud costs. The major cloud providers want your business and understand the complications that selecting the right services poses for the decision-makers in the average company. They are willing to help you find the best way to use their products. As an example, the Azure Advisor is one of the offerings from Microsoft intended to help control the cost of using their cloud platform. Some of its features include: 

  • Best practices designed to optimize Azure workloads;
  • Recommendations and guidance to quickly remediate problems;
  • Alerts that notify you that new recommendations are available.

If your enterprise makes use of cloud services, it is in your best financial interests to optimize the costs. As with many of the benefits of our digital society, using something and using it properly can be two very different things. The savings that you originally envisioned when engaging a public cloud provider can still be achieved, even if finding them takes some extra effort.

Last modified on Monday, 14 September 2020
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 Robert Agar

I am a freelance writer who graduated from Pace University in New York with a Computer Science degree in 1992. Over the course of a long IT career I have worked for a number of large service providers in a variety of roles revolving around data storage and protection. I currently reside in northeastern Pennsylvania where I write from my home office.

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