Many organizations are attracted by the potential to save money in the cloud. Once adopting the cloud, however, these organizations often find that cloud costs are much higher than anticipated. In some cases, these organizations can end up spending more in the public cloud than they would have with on-premises infrastructure.
This is not necessarily caused by poor financial management, but is often the result of taking advantage of the speed, agility, and flexibility of the cloud to expand operations. For many organizations, the biggest challenges to save money in the cloud stem from the complexity of cloud pricing options, legacy processes for allocating resources, and limited options for developing and enforcing policies to keep costs in control.
The complexity of cloud pricing
The complexity of cloud pricing can often lead to higher-than-anticipated cloud costs. For example, when a Virtual Machine (VM) is deployed, multiple resources are deployed alongside it (i.e. block storage, load balancers, IP addresses, monitoring services, etc.). These additional costs aren’t always factored into calculations, nor the costs of snapshots, networking, and disaster recovery services.
Unravelling the complexity of cloud pricing is extremely difficult without total visibility into your cloud environment. You can’t optimize your cloud environment until you can see what resources are being deployed, where they are being deployed, and how they are being used.
How on-premises principles influence cloud deployments
When organizations move workloads from on-premises infrastructures to the cloud, they often apply the same principles used for on-premises deployments. For example, if the on-premises configuration for a specific workload is x vCPUs, x memory, and x local storage, the same configuration might be used when deploying a workload in the cloud.
However, cloud-based virtual servers are often far more efficient than those used on-premises, so the same configuration can lead to over-provisioning. This challenge can be exacerbated by developers allowing “wiggle room” in cloud deployments to accommodate future increases in demand.
Other ways total visibility helps save money in the cloud
Visibility into a cloud environment not only helps organizations simplify cost optimization by identifying cost drivers and over-provisioned resources, it can also help increase accountability. Many organizations implement showback and chargeback programs to establish ownership over cloud budget, which can encourage developers and other team members to explore more cost-efficient options, such as committed use discounts like Reserved VM Instances and AWS Savings Plans.
The benefit of automating cost optimization
As opposed to notifying administrators of policy violations retroactively, as most cloud-native monitoring tools do, CloudHealth can be configured to proactively prevent overspending on cloud resources. Examples include:
·If a block storage volume is unattached for more than one week, trigger a snapshot and delete the volume.
·If a snapshot is older than one month, delete the snapshot (this policy can vary according to snapshot retention policies and resources).
·If a user attempts to deploy a non-sanctioned resource, initiate an approval workflow (this policy prevents users from deploying larger-than-necessary VMs and also prevents Shadow IT).
·If the number of VMs deployed in one day exceeds a certain threshold, block further deployments and initiate approval workflows for all attempted VM deployments.
For more suggestions that have helped our customers control AWS costs, check out our eBook, 6 Policy Types for AWS Governance.
Save money in the cloud on committed use discount programs
In addition to automating cost optimization, CloudHealth’s policy-driven automation capabilities can be configured to send alerts when committed use discount programs are being under-utilized or when existing commitments can be converted or increased, such as by purchasing additional Reserved VM Instances or AWS Savings Plans.
Choosing the right committed use discounts requires understanding the potential impact of the options available. The CloudHealth platform provides the ability to model different scenarios and view side-by-side comparisons of the cost impact of their Savings Plans and Reserved Instance options before making a commitment.
Understanding the options to help you save money in the cloud is just one part of a successful cloud financial management strategy. To learn more about how our customers capitalize on the financial advantages of the cloud, check out our whitepaper, Building a Successful Cloud Financial Management Practice.