Cloud adoption offers a range of challenges for tech directors, but regulating Cloud expenses may be the most demanding one. Most leaders migrate their infrastructure to the Cloud to reduce costs and streamline processes. A predominant mistake that they make during migration and adoption is trying to pursue the fastest path. By using in-house IT resources, they merely lift and shift the systems they were using for handling internal processes.
This approach lets organizations pay greatly for peak load instances and ends up spending idle resources when the load declines. In short, enterprises find that their expenses keep increasing. Similarly, with a lift-and-shift approach, leaders will fail to visualize the holistic view of Cloud expenses for each stage of the development lifecycle. Cloud cost optimization is a quintessential concept that tech enthusiasts need to consider effectively. Here is some guidance to establish a standardized optimization structure to control Cloud costs.
Factors Causing Surge in Cloud Expenses
- Data Gravity – Typically, it’s easier for leaders to transfer and store large volumes of data on the Cloud than handling on-premise infrastructure. However, this can lead to a Data Gravity scenario, in which numerous data move to the Cloud at once. When leaders need a backup for internal processing, they shift data back to on-premises systems. Eventually, businesses end up spending for migrating workload data to the Cloud and back to an on-site system. It is a highly unproductive and expensive approach.
- Lack of Predictability & Governance – With rapid Cloud adoption and evolving customer demands, the directors encounter problems related to the non-predictability of Cloud costs and lack of governance. The variability of Cloud spending based on end-user needs and agility needs makes it challenging to organize. Moreover, a further lack of transparency makes Cloud resources non-obvious, resulting in unnecessary costs.
- Overprovisioning – This is a scenario where organizations spend more on Cloud resources than what’s needed. In the case of low-load situations, the costs become higher since instances run needlessly.
- Contract Complexity – Most tech experts are unaware of the hidden prices of Cloud contracts and spend more unreasonably. Another key factor is the unfamiliarity of Cloud services’ price oscillations. Unfortunately, many organizations don’t know price hikes and deploy more instances, increasing overall investment.
Cloud Consulting Services – Empowering Cost-Effective Cloud Consumption
To take the stress out of rapid Cloud adoption, business leaders should consider collaborating with an experienced Cloud consulting services provider. The devoted consultants deploy cost-optimized Cloud infrastructure and embrace a unique approach to tackle every modernization obstacle. By utilizing a robust project infrastructure management plan, consultants avoid data gravity.
These consultants can act as Cloud assessment experts and meticulously validate pricing structures and contracts. By keeping an eye on Cloud contracts, ownership, and data compliance, the consultants reduce connectivity and data transmission costs.
Here is an insightful blog on how you can Scale up Digital Transformation with Cloud consulting services.
Three Aspects that Cloud Consulting Services Focus on Controlling Cloud Costs
Workload Prediction
A random gut analysis will not ensure that spending remains within anticipations. Hence, Cloud consultants predict workload requirements and generate budget expectations to remain within that projection. Consultants exercise this step and run processes before deploying workloads, applications, and infrastructure in the Cloud.
Key parameters considered by consultants while predicting workload requirements:
- How sensitive is the workload data?
- What happens when the information remains inaccessible or is lost altogether?
- Does the workload data follow compliance with any sector-specific regulations?
Spend Transparency
After forecasting budget, and workload requirements, and deploying the application, retaining transparency is important. This is possible by defining key metrics like Capacity, Availability, Performance, and Utilization that are critical to tracking Cloud expenses for the organization. This allows consultants to provide an organized view of expenditures outside of the bill. To simplify this process, major cloud-based service providers offer labels (or tags) as an essential governance framework. These labels are an important tool for expense tracking.
Waste Reduction
Once goals and transparency are established, consultants identify ways to lessen Cloud waste. Reducing waste won’t involve altering in-house systems’ architecture or code. Instead, consultants follow some approaches like:
- Removing Unused Resources – Though it may sound like a familiar practice, it is an uncommon measure for many CIOs and CTOs. Consultants identify any resources that the enterprise has installed but does not utilize. Especially, they look for allocation-based assets that accumulate cost irrespective of their utilization. Some examples include idle IP addresses, unused storage space, and unassigned compute instances.
- Empowering Allocation-based Services – Consultants foster a culture of allocation-based resource utilization. This approach requires technical workers in an organization to request particular resource allocation during provisioning. Subsequently, IT managers can optimize the volume of their resource allocation and meet the actual workload demand, thereby reducing costs. Container, database, storage, and application services are some resources that can be allocated based on provision requests.
Additional Practices for Firm Cloud Cost Optimization
Optimize Expense at Each Stage of the Development Cycle
Regulating Cloud costs throughout a development lifecycle phase requires constant assessment, data monitoring, and system tracking. Dedicated Cloud consulting services plan software development processes and apply a data-centric methodology for crucial decisions to eliminate tech debts. They establish a framework for the Cloud-based development process by assessing an enterprise’s end-user requirements and budget availability.
At the deployment stage, consultants analyze the operational expenses and ROI of the framework developed. Further, they embrace automation to enhance efficiency. Consultants define KPIs during development to minimize error refinement and maintenance costs.
Implement Cloud Expense as a Key Metric
Keeping expenditures a priority allows consultants to form a culture of regulating Cloud-based expenses. Setting up Cloud cost as a metric needs consultants to assess key areas where they can monitor and optimize overheads.
Accountability is a major pillar for implementing Cloud costs as a metric. Consultants focus on rationalizing the financial processes to drive business value and financial accountability. Measurement of costs is another pillar that depends on resource order, data architecture, and IT-driven designators. By aiming at this pillar, consultants can organize Cloud resource attributions through reliable tagging.
Rightsizing Resources
Rightsizing is a strategic Cloud cost optimization technique to date. During this process, consultants discover idle resources and deactivate such instances to control Cloud costs. Moreover, it involves complementing the Cloud assets with the workload and provisioning the required instances. Most of the consultants mention that when enterprise leaders know how to provision instances strategically, savings on the Cloud expenses can touch around 72%.
Cloud consulting services leverage pre-built features of Cloud platforms to simplify infrastructure optimization and instance rightsizing. For instance, AWS provides Spot Instances that offer a backup and allow users to use EC2 storage instead of devoting massively to Cloud resources.
Take the case study of Expedia Group, which is a US-based travel accommodation service provider. After the pandemic, it witnessed a decline in online operations. So, Expedia associated with offshore Cloud consultants to migrate their infrastructure to AWS spot instances and save around 64% of Cloud costs and enhance operational performance up to 90%.
Leveraging Hybrid Strategy
Another major problem is Cloud expenses that arise due to modifications in pricing. The reliance on a single vendor and interoperability concerns eventually increase Cloud costs. Hence, the Cloud technology consulting providers are encouraging tech leaders to leverage a hybrid Cloud strategy. A hybrid Cloud strategy is where enterprises leverage multiple providers to run infrastructure. For instance, tech teams can use public Cloud infrastructure for back-end services and private Cloud services for front-end administration.
Consider the example of ExxonMobil’s Hybrid Cloud approach. The US-based oil giant had a massive system of on-premise data centers. After switching to the Cloud-first transition, they migrated those data centers to Microsoft Azure. The comprehensive lift and shift of the data centers were not economically practicable. So, they introduced a hybrid approach for setting up optimized Cloud infrastructure.
Closing Thoughts
As strategic leaders continually work on optimizing their Cloud infrastructure, many find that the efforts needed are more complicated than they expected. That’s why, they should consider working with skilled Cloud consultants from offshore firms. By applying the steps above, consultants can start to regulate spending, implement realistic operations budgets, and ultimately minimize costs.
Christine Shepherd is an accomplished content writer with a passion for technology, particularly in the fields of artificial intelligence (AI) and machine learning (ML). With over five years of experience in the industry, I have established myself as a knowledgeable and insightful writer who has consistently delivered high-quality content to both technical and non-technical audiences.
