What Is Cloud Cost Optimization?
Cloud cost optimization ensures that each workload or application is allocated the most appropriate and cost-effective cloud resources. It balances the necessary performance, cost, compliance, and security requirements to ensure optimal cloud investments meet the organization’s requirements.
Each workload in a cloud deployment is unique, and its requirements change over time. To optimize cloud costs, you must define performance thresholds for each assignment based on domain knowledge and actual operational metrics. Optimization aims to reduce costs while ensuring performance constraints are met.
Cloud cost optimization is dynamic, responding to altering request requirements and ever-changing cloud pricing and service options. Due to the enormous difficulty of cloud environments, optimizing cloud costs requires detailed metrics, analytics, and automated tools.
9 Cloud Cost Optimization Best Practices
The following recommendations will help you optimize your cloud costs:
1. Review Pricing and Billing Information
Cloud service providers provide payment details that explain the cost of cloud services. You can use this information to identify the most valuable areas and save. Prioritize and analyze costly services and workflows. Understanding the cost of the cloud lets you make wise spending decisions and avoid paying for excess resources.
2. Set Budgets
You can control costs by confirming all parties know each project’s goals and budget. Don’t choose an arbitrary number. Instead, facilitate communication between engineering leads, product leads, and executives to understand cost requirements.
Basic requirements by the planned packaging and delivery of the product and its characteristics. For example, indicate whether this is a free trial or an enterprise plan. Consider these requirements as trade-offs during planning and development, along with requirements such as speed and stability.
Set a monthly budget to plan your cloud-calculating strategy. This budget may vary depending on the needs of your organization. An established budget is necessary for planning overall expenses and optimizing costs.
3. Identify Untapped Resources
You can easily optimize your cloud costs by finding unattached and unused resources. Administrators and developers sometimes provide a temporary server for a specific task and may forget to delete it after finishing the job. Alternatively, the administrator may forget to delete storage attached to terminated instances.
This practice causes AWS or Azure to be overbilled for resources an organization has purchased but no longer uses. A cloud cost optimization strategy helps you identify and eliminate unused and unconnected resources to eliminate unnecessary costs.
4. Identify Idle Resources
As in the exercise above, you can improve cloud costs by finding and combining idle computing resources.
Cloud service providers charge you for idle resources, even if you don’t use them. You can optimize costs by identifying and combining these capitals to decrease costs. For example, if your CPU utilization is 10% and your ISP charges 100%, you are wasting many computing resources.
You must find all the free resources and combine them to reduce costs. Conserving free resources for events such as busy periods or traffic peaks is unnecessary. To increase capacity, you can use cloud features such as auto-scaling, load balancing, and on-demand options.
5. Right-Sized Services
Right-sizing allows you to analyze compute services and resize them to the optimal size. However, manually measuring instances is difficult because there are many possible mixtures and memory, graphics, database, storage capacity, and bandwidth options.
For instance, you can use zoom tools to get recommendations for changes to families. This helps reduce cloud costs and optimize cloud utilization, helping to maximize the performance of existing resources.
6. Use reserved instances
Reserved Instances (RI) are prepaid compute instances that offer significant discounts. When you purchase Reserved Instances from a cloud provider, you select the instance type, typically a region or availability zone, and pledge to use the instance for 1 or 3 years. In return, most cloud providers offer discounts of up to 75%. Since you’re paying upfront, you should research and plan based on your historical usage of the opportunity. AWS also offers Savings Plans, which provide similar discounts but allow for more flexibility.
7. Use Savings Plans
The Savings Plans valuing model is flexible and assists you in saving up to 70% on AWS. This model offers reliably low prices similar to RI, subject to a one-year or three-year contract.
8. Use Spot Instances
Unlike Reserved Instances, Spot Instances are obtainable for last-minute purchases. AWS auctions off its remaining resources at low prices. However, these opportunities are unreliable as they are not always available and may sell out quickly. Spot instances support batch jobs or jobs that can be terminated immediately, but they are not mission-critical and take a lot of time.
The table below shows the Spot Instance offerings from leading cloud providers, key service parameters such as shutdown times, and the supreme time a Spot Instance is allowed to run.
9. Limit Data Fees
Moving data to and from the public cloud can be expensive. Cloud service providers often charge egress fees for moving data from their platforms and occasionally among areas. You can decrease cloud costs by avoiding unnecessary data transmissions.
Evaluate your cloud provider’s data transfer fees and configure your architecture to minimize required data transfers. For example, you can reduce unnecessary migrations by moving on-premises applications that frequently access cloud data to the cloud.
Review the fees for transfer methods to secure and speed up data transfers between the cloud and a private data center. You can compare the cost of using a dedicated network connection service, such as AWS Direct Connect, Google Cloud Interconnect, or Azure ExpressRoute, with the price of a physical transmission device, such as AWS Snowball or Azure Data Box.
Cloud Cost Optimization with Spot by NetApp
While public cloud providers offer tools to track your cloud expenses and even recommend potential cost reductions, they don’t implement any of them that optimize for you.
This is where NetApp’s Spot portfolio can help. Spot not only provides complete visibility into what is being spent on your cloud computing and by whom but also:
- Delivers an average savings of 68%, showing exactly where you can use EC2 Spot Instances or Reserved Capacity (Reserved Instances and Savings Plans) to save costs. It lets you reliably automate workload optimization references in just a few clicks.
- Ensure Spot Instance continuity by ensuring that even production and mission-critical applications can securely run on Advertisement Instances using predictive algorithms and advanced automation to ensure workload continuity.
- Manage RI portfolios and savings plans to ensure maximum utilization and ROI while minimizing the risk of financial lock-in and cloud waste.
- Maximize savings for DevOps teams using Kubernetes and proven machine learning and automation to consistently identify and deploy the most balanced, cost-effective computing resources for your container clusters.
