Eight Ways to Optimize Your Cloud Spend


 It's no secret that the cloud is the future of business and technology. Cloud computing has become a core competency for organizations, who realize the many benefits it provides, from scale to agility and cost savings to risk mitigation.

The cloud is also an excellent resource for companies that are looking to expand their business but may not have the budget or space available in-house. It allows employees and customers alike, regardless of location, to access data securely anytime they need it.

The global public cloud service market is expected to reach $623.3 billion by 2023 and 94% of enterprises are already using a cloud service.

Cloud can help you optimize IT costs by reducing hardware expenditures, increasing your data center footprint, or even serve as an alternative to on-premise solutions.

However, cloud services are not without their challenges. There are instances where cloud spend goes unchecked and without optimization, costs can balloon without any clear benefits.

As it stands, 30% of all IT budgets are allocated to cloud computing and just over half of all enterprises spend more than $1.2 million annually on their cloud services.

In this article, we'll be discussing eight effective ways to optimize your cloud spend in order to get more out of your investment without a huge cost increase.

1.  Make it a priority

The first and most important part of optimizing your cloud spend is to make optimization a priority.

For most IT departments, there's no such thing as routine cloud usage; it all depends on what projects are currently in development and how much bandwidth each project requires.

Without any clear criteria for prioritizing cloud spending, optimizing cloud usage becomes an exercise in futility, since costs increase without improving benefits.

Cloud spend optimization has to be built in as a core aspect of a cloud usage policy and its importance underscored to stop it from being put on the back burner in favor of other priorities.

The cloud is an ideal place to look for ways of streamlining IT spending, but cloud usage policies need to be clear and unambiguous about how costs are determined.

For example, many organizations subscribe to different cloud services based on the department that needs cloud resources rather than whether those departments require public or private clouds.

This results in unnecessary duplication because each individual organization within a larger enterprise has its own cloud service subscription without any sharing between them except through making available some virtual machines (VMs).

A better approach would be consolidation by using hybrid cloud architectures with shared infrastructure where possible; this will save money while improving performance since it reduces data transfer times over wide area networks (WANs) instead of having multiple VMs.

2.  Make use of Heat Maps

Cloud usage heat maps are an excellent method of cloud spend optimization since they provide a clear visualization of cloud usage over time.

By identifying the patterns in cloud spending, heat maps allow cloud managers to optimize cloud usage so that IT can take advantage of all its potential without causing unnecessary expenses.

Heat maps provide a visual representation of computing demand on cloud servers and cloud services.

When combined with cloud service management software, heat maps provide a powerful way for cloud managers and admins to optimize cloud usage by shutting down unnecessary servers at the end of each day or week as needed.

This can help companies either reduce their overall cost per server unit (PU) while also reducing energy consumption and environmental impact.

For instance, development servers might not need to be up and running over the weekend if the team using them doesn't work weekends. These might seem like small savings, but they quickly add up to either larger savings or inflated costs.

Tagging resources enables users to track cloud spend across public and private clouds, allowing them not only to monitor how much is being spent where but also to identify opportunities for optimization through shared services like Software-as-a-Service (SaaS).

When used in conjunction with an automated start/stop schedule tied to the data produced by a heat map, cloud service management software can automatically turn servers on and off in response to need, without any manual oversight.

3.  Use Cloud Forecasting Tools

As with nearly all business expenditures, cost forecasting is an excellent way to stop costs from artificially increasing without adding any clear benefit.

Forecasting tools allow for maximum optimization of cloud usage by estimating future costs based on current spending patterns.

This allows businesses to plan ahead so that they can appropriately allocate the funds needed in order to avoid overspending or underutilizing the cloud.

By using forecasting techniques organizations are able to more effectively manage their use of public clouds as well as reduce costs through planned reductions if necessary.

Finding cloud services that are well suited to the business is another way of optimizing cloud spend.

It's possible to use cloud computing without spending too much money on it by simply not overpaying for unnecessary cloud resources or underutilizing important features.

The results of cloud forecasting tools can help businesses understand their optimized current and future computing needs and find a provider that covers those without paying for pointless additional services or capabilities.

Clouds can provide a variety of different capabilities, but there are only certain types that make sense for particular businesses. 

By taking time to research various public clouds and find out what they have to offer an organization will be able to save money in the long run by utilizing only those options which benefit them most, rather than just using whatever was provided at no extra cost initially because all service providers give away some things free-of-charge regardless of whether or not they're needed.

4.  Reduce redundant storage

Nearly all enterprises produce huge amounts of data that require storage. The use of cloud storage services can cut down on the overhead required to maintain large amounts of data.

Copying and maintaining backups often requires additional hardware, electricity usage, cooling facilities, and other resources which are not needed with cloud-based solutions.

However, redundant duplicates of such data can take up huge amounts of costly cloud storage without any clear benefit.

For example, cloud-based storage services can automatically synchronize files between multiple devices. However, if the same file is already stored on one of those devices it does not need to be uploaded again.

All that extra cloud space just costs money and provides no benefit for businesses or users who are trying to save cloud expenses.

Businesses can avoid data redundancy in general by utilizing cloud apps more efficiently.

For instance, cloud backup solutions should only store absolutely necessary information because redundant backups cost companies time and money without providing any tangible benefits.

Automated data management tools can be put in place to check for data redundancy and delete any identical files while cloud management software looks for recently emptied storage servers and deactivates them to save on costs.

Additionally, ways of working can be optimized to reduce siloing between departments and increase interconnectivity, meaning only one copy of a document can be accessed by all relevant employees, rather than multiple departments paying to store the same file in the cloud.

5.  Implement centralization and remove 'Shadow IT'

One of the main benefits of cloud computing is its decentralization. However, when it comes to spending, that decentralization becomes an issue because cloud services are rarely all centralized in one place.

This means that companies need to spend time and money on optimizing their cloud usage, which often includes figuring out who is using what cloud service.

Implementing centralization directly addresses the problem of decentralization by providing a single point for cloud expenditure across an entire company so it can be managed easily without any guesswork or wasted labor hours trying to figure out how your employees use various cloud applications.

One excellent way to implement this kind of centralization is to reduce what is known as Shadow IT.

Shadow IT describes cloud applications that are deployed through non-approved or unmonitored channels.

It is not uncommon for employees to deploy cloud apps without the knowledge of their company's IT department, which can lead to wasted cloud spend and security vulnerabilities such as ransomware attacks.

By implementing cloud expense management tools, companies can gain visibility into how much they're spending on various cloud services and who within their organization is using them.

Once this data has been collected, companies can then put in place workflows and policies that restrict the unauthorized usage of cloud resources and re-centralize cloud deployments back through their IT management team.

This allows for greater control over the use of cloud resources and, therefore, overall cloud spending.

6.  Identify and Consolidate Idle Resources

One of the easier ways to reduce cloud spend is to identify and consolidate idle resources

When cloud resources are idle or go unused for a period of time, they continue to cost money. 

For example, even if a computing instance is idling with a CPU utilization level of 1%, you'll still be getting charged the same amount as if it was utilizing 100%.

A primary reason for the overuse of idle cloud resources is cloud sprawl. Cloud sprawl is the term used to describe what happens when organizations continue adding cloud resources without properly managing their cloud footprint first.

As more and more cloud services are added, it becomes increasingly difficult to keep track of everything that's happening in the cloud. This often results in resource overlap or inefficient use which can lead to costs spiraling out of control.

Another issue is a legacy holdover from data centers where administrators maintained low utilization assets to provide greater headroom in case of data spikes.

This behavior has carried over to cloud computing services, where autoscaling, load balancing, and on-demand capabilities make keeping low utilization assets online in case of usage spikes redundant and costly.

Ensuring that all staff fully understand the cost implications of cloud sprawl and unused idle resources is the key to cloud cost optimization.

7.  Consider multi-cloud vs. single cloud

There are a number of benefits associated with a multi-cloud policy, including the ability to cloud-burst in case of a spike or outage and the prevention of vendor lock-in.

However, multi-cloud can also lead to more costs if it is not implemented correctly by ensuring that all cloud services are sourced from compatible providers with transparent pricing and billing metrics.

Once these parameters have been met, there still remain significant hurdles for enterprises looking at adopting a multi-cloud strategy: accounting for licenses across multiple providers; managing different cloud instances on an individual basis while maintaining control over cost allocation; and migrating workloads between clouds without increasing security risks or requiring substantial re-architecting efforts.

All this additional effort has a related cost in time and staff productivity, which can be avoided by switching to a single cloud provider.

There are also other benefits of using a single cloud provider. The cloud provider can offer a more advanced cloud infrastructure that allows for greater scale, reduced latency, and cost savings.

Another benefit of using a single cloud is the ability to use managed services from your cloud providers’ partners without having to rely on an external third party.

This ensures data security with minimal effort while increasing speed and responsiveness by reducing time-to-market in creating new applications or products.

An example would be utilizing machine learning tools that help organizations make better day-to-day business decisions faster through automation thereby improving productivity across all aspects of their organization including marketing, sales, finance, etc.

Just as importantly, many cloud vendors offer discounts to cloud customers that purchase managed services from their partners.

This enables cloud providers to work with strategic partners who can provide exceptional services while giving cloud users an opportunity for additional savings on top of the already competitive pricing they receive as cloud consumers.

The ability to easily move workloads between data centers gives organizations more flexibility in how they manage IT resources, which reduces costs and increases productivity by bringing applications closer to end-users wherever they are located around the world.

An additional cost-saving aspect for using single cloud providers is the potential discounts offered in relation to spending. For example, spreading out a $1 million spend across three providers could result in a company missing out on a significant discount and preferred status with a single vendor.

8.  Use cloud KPIs to measure performance and implement accountability

Cloud KPIs can be used to monitor cloud spend and performance, which provides visibility into the cloud environment. Organizations can use this information for cloud cost optimization by evaluating IT resources that are underutilized or over-utilized.

However, simply setting KPIs and generating reports is not enough to ensure cloud savings.  It is important to implement cloud cost optimization strategies and processes that align with these KPIs.

One of the best ways to ensure that cloud-based KPIs actually have an impact is to create accountability.

For example, cloud spend can be tied to individual business units and managers and cloud KPIs used to determine whether they are properly optimizing their cloud spend.

This level of data gather target setting, and accountability is often used in all other aspects of a cloud-based organization and there is no reason it shouldn't be applied to cloud spend optimization

However, when setting cloud cost optimization strategies and processes, it is important to begin by understanding the current state of cloud spending within your business and how it might grow.

For example, if a company currently has five different departments using public cloud services from several providers, it will be difficult to develop an effective strategy around optimizing cloud spend without first establishing some sort of consensus across these departments on how they should approach their shared use cases for cloud technology.

In order to effectively build this level of consensus across multiple teams in a larger enterprise setup, you need buy-in from senior management who understand that even small changes can have a large impact over time given the scale at which many companies are operating with regard to cloud usage.

Instead of a static approach, goals and KPI metrics for cloud use and spend optimization should be reviewed constantly to make sure they are not strangling productivity.

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