Public cloud spending is booming. It is outpacing private cloud spending by a wide margin. It has been that way for years. And the spending shows no signs of letting up. Gartner predicts end-user spending on public cloud services to grow 18.4% in 2021 to a total of $304.9 billion. That is up from $257.5 billion in 2020. Gartner also predicts the cloud will make up more than 14.2% of the total global enterprise IT spending market in 2024, up from 9.1% in 2020. So, the cloud isn’t going away anytime soon.
The growth in cloud spending is not surprising. Cloud technology is ideal for today’s pandemic-driven world. It helps organizations reduce fixed costs, shift to remote work, and adapt to surges in online needs. But public clouds have their challenges. Many organizations, for example, waste up to 35% of cloud spend. Few enterprises can afford to waste critical resources like that and thrive in tough environments. So, optimizing cloud costs is essential for today’s cost-conscious enterprises.
6 Proven Strategies for Containing Cloud Costs
Complex pricing models make it hard for enterprises to generate significant cloud savings. That’s especially true if an organization is misusing the cloud. Strategies exist, however, that can help you drive efficient consumption of cloud resources. Below are six of them:
1. Right-size your resources
Right-sizing resources are critical to containing cloud costs. The simple four-step process below helps you do that. It lets you “right-size” and “right-buy” your cloud estates based on real-time and forecasted usage:
- Identify the sizes of instances needed for each application workload.
- Isolate unit costs, such as cost per customer, feature, and transaction, then tag them to determine actual spending.
- Distinguish between the number of users hitting a platform and the number of transactions going through a platform. They often differ.
- Review cloud reports. Then, make strategic decisions using unit cost data to develop informed cost optimization decisions based on actual resource usage.
2. Use consolidated billing to avail yourself of volume discounts.
If you are like many organizations, you have multiple cloud accounts. That approach may work well for you. But you may also have separate bills to pay. Cloud prices drop dramatically with a price per unit approach. So, switching to consolidated billing lets you take advantage of volume and usage discounts and generate cloud savings.
3. Choose the right pricing model based on actual usage.
Cloud hosting partners offer demand and reserve, pricing models. Leverage these pricing models where you can. In use cases where you need long-term, dedicated services, as in production instances, choose reserve pricing based on storage and content distribution. In instances where you need short-term cloud resources, choose demand pricing, which is pay-as-you-go. Working with your cloud partner to determine pricing models based on actual usage is critical to containing cloud cost.
4. Automate resource life cycle/eliminate the stagnant cost
Invest in automation. Often, resources you have provisioned for long-time usages, such as IP addresses, load-balanced servers, or storage devices, become idle, unused, or unattended. Yet, you are still paying for additional usage of hours, servers, or storage. Managing usage elasticity by automating resource life cycle, however, boosts efficiency and optimizes cloud cost.
How do you know what to automate? That is easy. First, analyze resource utilization. Next, decide which machines you can switch off or downsize from core count, memory, and allocated storage. Then, identify how long an instance should run for, and when idle, how long before you can shut it down.
5. Go Native to Optimize Cloud Savings
Organizations can also go cloud-native to optimize cloud costs. This approach lets you build applications in the cloud, boosting cost-efficiency. But going cloud-native almost always requires you to move to a service-separated architecture. It may also require you to use the native services of your public cloud hosting provider of choice. In other words, going cloud-native moves you from paying for a provisioned-based infrastructure to paying for a consumption-based service. That helps optimize cloud costs significantly.
6. Partner with the Right Cloud Hosting Provider
Enterprises can also optimize cloud cost by partnering by their choice of cloud hosting service providers. They offer numerous benefits that can help boost productivity and efficiency, conserve energy, and scale down your IT departments. But be careful. Cloud hosting deployments often differ based on traffic pattern, storage footprint, number of nodes in the web tier, and the database’s size. They also vary based on VPN requirements, backup strategy, development/staging environment, and many other hosting specifics.
So, choosing the right cloud services provider with the right platform is critical to optimizing cloud costs. You want a provider that is going to fit your evolving needs, has extensive experience working with organizations like yours, and features a powerful cloud hosting solution. You also want a provider that offers a basic level of service you’re comfortable with, has the mechanisms that make it easy for deploying, managing, and upgrading your software, and provides a comprehensive security infrastructure for all levels and types of cloud services
How CherryRoad-HopOne Helps Optimize Cloud Cost
CherryRoad’s cloud hosting solution, for example, is unique. Its public cloud solutions help organizations improve performance, manage costs, maintain compliance, and enable disaster recovery. The solution offers the same flexibility and control as found in a private cloud; on-demand provisioning of high-performing virtual machines with any combination of the operating system, storage, and memory; and a resource pool that lets you size up or down in real-time and provide any number and any configuration of VMs.
Plus, CherryRoad provides critical cost optimizing tools, like a data migration app that provides an accurate, cost-effective mechanism for converting data efficiently; a highly secure centralized repository to house legacy data so you can decommission older systems; a travel calculator application that integrates with Oracle Cloud Expenses so employees can enter their daily travel mileage; and a timekeeper solution that allows employees to punch in or punch out and logs out once an operation is completed.
The Bottom Line on Optimizing Cloud Costs
These six strategies can help you optimize cloud costs. By combining the right sizing and right buying approaches, you can manage workflow demands efficiently and effectively yet still meet peak demand needs when you must—all while cutting excess costly headroom. More importantly, by minimizing cloud spend you can enjoy all the benefits of employing a public cloud—lower costs, no maintenance, near-unlimited scalability, flexibility, high reliability—without experiencing the downsides that come with private or hybrid clouds.
Cloud computing is helping organizations weather the COVID-19 storm by reducing fixed costs, shifting to remote work, and adapting to surges in online needs. But public cloud computing has its challenges. The typical enterprise, for example, wastes as much as 35% of its cloud spend each year—a heavy burden for any organization to bear. Optimizing cloud cost, then, is critical for an organization’s survival. Implementing the strategies discussed above and partnering with the right cloud hosting provider can help you optimize cloud cost, generate critical cloud savings, position you for significant growth.
Cherry Road’s highly skilled and engaged people have decades of experience helping clients like you beat their IT challenges. To know more about CherryRoad-HopOne cloud hosting services, email us at sales at hopone dot net.