Why You Should Use Cloud Spend Optimization

Cloud Spend Optimization

It is no secret that various companies are currently using cloud technology to support various matters related to job advancement. Especially now that when many employees are doing WFH (Work From Home), companies must also provide facilities that are used for employees to continue working like in an office.

Not only are these the benefits of using cloud technology, but there is much more that can be done for the cloud. In the world of the cloud, there is something called cloud spend optimization.

Before discussing what are the advantages of using cloud spend optimization, there are some facts that you may not know about using the cloud.

The cloud offers organizations unlimited scalability and lower IT costs only for the resources you use. But the truth about Amazon Web Services (AWS) pricing and Microsoft Azure pricing is that cloud customers are charged for the resources they order, whether they use them or not.

In their latest report, How to Identify Solutions to Manage Costs in the Public IaaS Cloud, Gartner analysts Brandon Medford and Craig Lowery estimate that as much as 70% of cloud costs are wasted. Fortunately, there are many best practices for cloud cost optimization.

This is where the role of cloud spend optimization is needed for those of you who own a company but instead waste the money you use to rent cloud services on a cloud platform.

Best Way For Cloud Spend Optimization

Find Unused or Unattached Resources


The easiest way for cloud spend optimization is to look for unused or unused resources. Often an administrator or developer might “run” a temporary server to run a function, and forget to shut it down when the job is done. 

In other common use cases, administrators may forget to delete the storage attached to the instances they terminate. This happens frequently in IT departments throughout the company. The result is that the bill from the cloud platform will cover the costs for resources that they have purchased, but are no longer using.

A cloud spend optimization strategy should start with identifying unused and truly disconnected resources and removing them.

Identification and Consolidation of Missing Resources

The next step in optimizing cloud computing costs is to address idle resources. Idle compute instances may have a CPU usage rate of 1-5%. When a company is billed for 100% of that computer instance, that’s a significant waste. The main strategy of cloud spend optimization is to identify those instances and consolidate computing work into fewer instances.

In the data center era, administrators often wanted to operate at low utilization so that they had prime room for traffic spikes or during busy times. Adding new resources to a data center is difficult, expensive and inefficient. In contrast, the cloud offers automatic scaling, load balancing, and on-demand capabilities that let you increase your computing power at any time.

Making use of Heatmaps

Heatmaps are an important mechanism for cloud spend optimization. Heatmaps are visual tools that show peaks and valleys in computer demand. This information can be useful in setting start and stop times to reduce costs. For example, heatmaps can indicate whether a development server can be safely shut down over the weekend.

While this can be done manually, a better option is to take advantage of automation to schedule instances to start and stop, optimizing for costs.

RightComputing Services RightComputing

SizeSizeis the process of analyzing a compute service and modifying it to the most efficient size. As well as server size, there are options for servers that are optimized for memory, database, compute, graphics, storage capacity, throughput, and more. An Appropriate Sizing Tool can also recommend changes across the sample family if necessary.

The Right Size does more than just reduce cloud costs, it helps with cloud optimization, which means achieving peak performance for the resources you pay for.

Investing in a Cloud Service Provider

If you want to save even more money on cloud leasing, it may be more appropriate to invest. An example is AWS or Azure Reserved VM Instances (RIs). You can get a cheaper subscription price.

You can get bigger discounts based on prepayments and time commitments. RI savings can be up to 75%, so this is a must for cloud cost optimization. Since RIs can be purchased for one or three years, it is important to analyze your future usage.

Take advantage of Spot Instances Spot

instances are very different from RIs, but they can help you save more on AWS spending or Azure spend. Spot Instances are available for auction and, if the price is right, can be purchased for immediate use. However, opportunities to purchase Spot Instances can quickly disappear. That means they are best suited for specific computational cases such as batch jobs and jobs that can be terminated quickly.

Jobs like this are common in large organizations, so Spot Instances should be a part of any cloud spend optimization strategy.

Consider Multi-Cloud vs. Single Cloud

Some companies deliberately seek multi-cloud solutions to avoid vendor lockdowns. While this is a valid strategy for increasing availability and uptime, these organizations can risk missing out on potential volume discounts by one cloud vendor. For example, if a company spends IDR 50,000,000 on AWS + IDR 30,000,000 for Azure + IDR 20,000,000 on Google Cloud Platform, they could lose the $ 1 million achievement level with one vendor.

That $ 20 rate value might be a huge discount on overall cloud spend, as well as preferred status with that particular vendor. In addition, the ability to save money with a multi-cloud strategy can be compared to the administrative complexity of switching between platforms, paying for network traffic between clouds, and training staff across multiple clouds.

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