Tips to manage your cloud spending

January 27th, 2021
Tips to manage your cloud spending
Before we begin:

In case you’re unfamiliar with what the cloud is and how it can greatly benefit your business, download our free eBook first. Once you’re done reading it, jump right back in!

The cloud is touted to be a cost-saving tool for businesses of all sizes. This is because it allows companies to rent instead of purchase hardware, software, and human resources from a cloud service provider. However, as with any company expense, the cloud can break your budget if you overspend on it.

Stay on top of your cloud spending by following these tips now:

Plan for capacity

Sudden spikes in traffic can lead to protracted downtimes that make you lose working hours and/or compel your customers to switch to your competitors. This fear can make your IT team overspend on extra capacity, which is not a good thing, either.

Thankfully, proper capacity planning can prevent you from burning money on unnecessary cloud resources. First, take full advantage of your cloud provider’s auto-scaling capabilities. For instance, Amazon Web Services has AWS Auto Scaling. Auto-scaling features, in general, monitor and automatically adjust cloud resource allocation to meet the demands of your applications.

Furthermore, you can use auto-scaling to prioritize some workloads over others. If, for example, both high- and low-priority workload requirements suddenly spike, having higher upper limits on capacity allocation for the former and lower upper limits on the latter ensures that you’re spending more on critical processes only.

Second, you can avail of alternatives to extra capacity, such as caching and message queuing.

Avoid unnecessary data transfers

Cloud providers charge you whenever you move data to and from their platforms. To control costs here, first assess your provider’s transfer fees, then look at how your organization accesses cloud-hosted data. Identify data transfers that needlessly add to your cloud bill and make adjustments so that you can stop the bleeding.

To illustrate, you may be hosting applications in-house, but those apps draw data from your cloud a lot. It will be much more cost-effective to move those apps to the cloud and thereby cut data transfer costs.

Take advantage of discounted pricing schemes

On-demand cloud resources come at a premium, at least when compared to alternatives that trade flexibility and immediate availability for price reductions.

Reserved instances
If you’ve identified workloads that require predictable and consistent cloud capacity, then you’ll do well to use reserved instances, i.e., cloud instances that you commit to use for a predetermined time period. A period can range from one to three years, during which time you’ll have a certain amount of consumable capacity that is normally a third of the price of capacity were it on-demand.

Spot instances
For workloads that you don’t mind getting disrupted (because they’re not business-critical but they’re still nice to have), you can check out a cloud provider’s unused capacity. Referred to as spot instances, providers offer these at significantly discounted rates. These rates reflect the overall demand for capacity in a region and fluctuate by the hour, so during times of low demand, low-priority instances can be discounted by as much as 90%.

Users set a maximum price they’re willing to pay for a spot instance and pay the going rate at the time of consumption. If the pricing rate of the instance they’re using exceeds this threshold, they’ll be cut off from this resource so that it can be made available to users who can match or exceed the new price.

Trim cloud sprawl

Cloud providers offer services a la carte to fulfill whatever cloud requirements you may have at the moment. Perhaps you need new instances to develop a new application, or perhaps more storage for the data you got when you acquired another company. But once the app development project is finished or you’re done winnowing out the data you don’t need, you may forget to discontinue or scale down your extra cloud service subscriptions.

Then, you’ll get new priorities that will require other services — and those may be forgotten about as well. This unabated accumulation of services is called cloud sprawl, one of the leading causes of overspending on the cloud.

To prevent this, you need to exercise vigilance by using cloud infrastructure monitoring, application management, and cost monitoring tools. Implement company policies on decommissioning unnecessary resources. For instance, you can require the use of automated provisioning, a cloud feature that cuts off service as soon as workloads are terminated.

Have HERO Managed Services help you out with cloud management. You too can optimize your use of the cloud and orient it toward growth. Contact us today to find out how.

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