Although there is rise in cloud adoption today among various organizations, they are losing track of cloud costs. Cloud cost optimization (CCO) not only facilitates users in managing cloud costs but it also helps in achieving an optimal cloud performance.

Detecting mismanaged resources, reserving higher discounts and Right Sizing computing services to scale & diminishing waste are some of the ways to achieve Cost Optimization. It lets clients to arrange the most efficient way in allocating cloud resources and in doing this it helps to avoid the waste but increase the performance in the cloud.

Why is cloud cost optimization important

Cloud cost optimization is highly crucial since almost all firms have migrated to the cloud and have started relying highly on it. They spend huge amounts of money on cloud costs and are wasting cloud resources & this problem is getting worse.

Around ninety-two percent of firms across the world are relying on cloud technologies to a greater extend & nearly thirty-two percent of IT budgets is mainly dedicated to cloud spending. Cloud facilitates lesser initial IT costs as well as scalability. However, it can be pricey in the long run. According to a recent report it is estimated that thirty percent of cloud spending is wasted & the firms usually over budget nearly twenty four percent for their cloud needs. Hence, cloud cost optimization is necessary for increasing an organization’s cloud ROI.

Benefits of Cloud Optimization

The most important benefits of CCO includes cost reduction, Higher visibility & Utilization and increase in productivity, efficiency and innovation.

Cost reduction

CCO can help in huge reductions in cloud costs. A few of the vendors offering CCO tools claim the following numbers: An average of twenty three percent decrease with Crayon’s Cloud Economics & forty percent decrease as per Snow Software.

There are numerous cloud cost optimization tools and platforms that are currently available in the market.  Some of these include Cloudera, Crayon, AWS Cost Explorer, and CloudCheckr.

CloudCheckr delivers deep insight & actionable recommendations along with automated management of Reserved Instance & Savings Plans commitment portfolios via Spot Eco. This helps in achieving the greatest savings possible.

Five important steps to achieve CCO

Every organization builds different optimization strategies according to the type of business they do. However, there are numerous procedures or steps which should be commonly followed on the path to CCO. These include administration, cost optimization & procurement across the cloud platforms that they have employed.

Evaluating resources

All firms evaluate their resources to determine resources that are idle & consolidate them. Either the important cost drivers would be missed, without this or even duplicate purchases may be made. Therefore, the optimization lets organizations to comprehend how much computing power they must purchase, and this will help in not wasting the money.

Computing instances which were terminated would still possess attached, active storage resources in a few cases. Deleting/removing these is the 1st step in CCO. Furthermore, in addition to public cloud services, organizations can audit both their private as well as on-premises computing resources that were acquired in the past and anticipate to reclaim ten percent of these as per Snow Software.

Further, most of the organizations do not understand both the important functions of the resources they employ, as well as their pricing. Therefore, enhancing resource scheduling & optimizing the pricing can result in major cost savings by itself, and this would be somewhere up to eighty percent in a few cases.

Identifying reserved instances

The next step is detecting the reserved instances that organizations purchased excessively & find out ways for replacing, changing, & downsizing these instances. Spot instances, where instances which utilize space capacity which is available for lesser than the on-demand price are useful in dealing with the high capacity of cloud services.

Densify leverages a unique approach that helps in solving a number of problems and helps in managing resources the right way in the cloud. It combines ML with deep analytics and automates the process of finding the ideal instance types & resource specifications for the organization’s cloud-based infrastructure. This helps in ensuring the optimal balance of performance as well as cost.

Optimizing the framework

The 3rd step is related to establishing a better framework & general governance system. Although there are numerous ways for creating such a framework based on the necessities of the business the listing requirements & aligning the cost with these requirements will be wiser.

Optimizing storage & subscription

Enterprises tend to overbuy storage & subscriptions, while cloud storages as well as massive subscriptions can be estimated easily corresponding to the organizational requirements. Earlier, it was not easy and was time consuming to rise the capacity. Hence, organizations held onto excess capacities that are easily auto-scaled, today eliminating such need for excess capacity.

Assigning monitoring tasks to specific employees

The 5^th and one of the most important components are assuring that managing as well as monitoring the cloud servers are assigned to the business developers clearly. While in new projects/campaigns, new servers in the clouds are commissioned, it is often unclear how these servers are managed & monitored or who is in charge of decommissioning them once the projects are complete. When it comes to cutting expenses such smaller adjustments can act as a lifesaver.

Benefiting from offers

The last & final factor is about exploiting the cloud at the most and this comprise understanding as well as executing the licenses & subscriptions. Others include the different kinds of licenses that are qualifying for hybrid benefits, as well as taking advantage of promotions & validating the prices.

In a nutshell

The cloud possesses great potential and organizations can achieve cost savings as long as they pay attention to CCO. The CCO tools help companies to manage as well as allocate costs, optimize spend & save money on their cloud bills. Hence, it is important for businesses to choose the right CCO tool that would help in meeting their requirements.