4 Keys to Controlling Cloud Costs

Cloud Migration & Integration / Digital Optimization Strategy / Integration & APIs / IT Consulting / Technology

4 Keys to Controlling Cloud Costs

One of the biggest concerns that organizations have when it comes to online software solutions is controlling cloud costs. Many cloud platform providers understand this concern and offer a variety of options and features to fit different budgets. These companies also often provide cost management tools for users, which can be a helpful way to reign in soaring computing costs. However, for the most efficiency with cloud solutions, organizations should not rely on these tools alone.

There are four keys that can help organizations control cloud costs including defining a cost baseline, aligning architecture with best practices, leveraging right-sizing tactics, and modernizing applications for the cloud. Knowing these and putting them into practice can help companies better control cloud costs.


Define a Cost Baseline

A major part of any strategy is to define a baseline, which brings understanding to the issue. How that applies to controlling cloud costs is to understand cloud spending at two levels, the macro, and the micro. Once a cost baseline has been defined, it will be easier to set key metrics that measure whether cost optimization efforts have been successful or not. When setting your metrics, it is important to remember two things: Select things that can be measured objectively and choose factors that relate to the goal. For example, tracking spending by team or project.


Align Architecture with Best Practices

Organizations that are attempting to control cloud costs should examine the tools that cloud platform providers have that relate to cost optimization. These tools can help align architecture with best practices in the cloud. Some providers have tools that can point organizations in the right direction to reduce cloud computing costs. Moreover, these tools are often free for first-time users, which can also be helpful to a company’s bottom line.


Leverage Right-Sizing Tactics

One cost-controlling measure that often gets overlooked by companies is right-sizing. Some tactics for right-sizing that are used by AWS are spot instances, reserve instances, and savings plans. By using one or all of these at different times, organizations will be able to cut down their spending on cloud solutions.

Spot instances are usually where organizations will find the most cost savings. With spot instances, the cloud provider does not commit to offering the solution at a specified time. Rather, users decide what they’d like to run and for how long. When capacity becomes available, users will be permitted access. This makes spot instances an ideal fit for flexible workloads such as batch processing.

Cloud users could also opt for reserve instances or savings plans which can also be a good way to curb cloud spending. Each cloud provider offers its own type of these programs that can lead to big discounts for users. The exchange is that users will only use the platform once or make a multi-year commitment. However, organizations need to be clear on the fine print of these programs so that they don’t get caught in a commitment to a defined amount of usage. In addition, an organization’s needs can change over time. Leveraging right-size tactics will be an ongoing exercise for companies that want to get the most out of their cloud investment.


Modernize Applications for the Cloud

Although modernizing applications for the cloud requires more time and energy, it can be one of the best ways to control cloud costs. Transitioning from on-site services to cloud-ready applications allows a company to benefit from cloud functionality like scaling and flexibility. These will also enable an organization to get the most efficiency from their cloud investment.

Other advantages can come with moving to the cloud including process optimization, improved productivity, and optimized utilization. Yet, because most businesses rely heavily on legacy applications it is important to have a strategy to modernize for the cloud. This will ensure the most flexibility, agility, and innovation.

Controlling cloud costs without losing the benefits that come with cloud computing is a balancing act that many organizations find themselves doing. While cloud platform providers offer cost management tools, it is vital to go beyond these tools to cut down on the cost of the cloud.

Four of the keys to saving on cloud spending including defining a cost baseline, aligning architecture with best practices, leveraging right-sizing tactics, and modernizing applications for the cloud. Making these a central part of a company’s cloud procedures can help control cloud costs.