The cloud transformed web technology by offering near-unlimited scalability, but with that flexibility and power comes additional complexities in understanding and optimizing cloud spending.

Cloud service providers love to tout, and with good reason, that their offerings provide customers the ability to quickly scale infrastructure and resources up and down seamlessly as needed. Unfortunately for many businesses, if cloud spending isn’t correctly optimized, costs can rise out of control quickly.

What is Cloud Cost Optimization?

Cloud cost optimization is the process of reducing an organization’s cloud spend while minimizing impacts to performance and scalability. While the cloud offers unprecedented scalability and nifty services like automated and elastic resource scaling, it’s essential to understand that the main driver for cloud cost is the reserving of services and not just the services used.

Elastic service offerings from AWS and Azure can significantly simplify the scaling of resources. Still, they can also massively raise costs when compared to an organization proactively reserving the resources it knows it needs.

Cloud optimization requires continuous improvement to eliminate cloud resource waste and right-size resource acquisition in alignment with the infrastructure and services the organizations need. For many organizations, it is a discipline that requires a cultural shift towards a commitment to better forecasting and addressing challenges of complexity and scale with robust tools and techniques to eliminate waste.

Cloud Cost Optimization Best Practices

1. Develop a deep understanding of your organization’s usage patterns and seasonality

The starting point for cloud cost optimization is understanding in precise terms the usage needs and workload patterns for an organization’s IT resources. Once an organization understands its requirements and critical factors like seasonality, leveraging tools and techniques to forecast cloud spending becomes a lot simpler.

For organizations already in the cloud, a best practice is to use tools to get a complete picture of current cloud usage and spending. Some of these tools are native to cloud service providers, and many powerful third-party tools greatly expand viewing and analytics capabilities.

2. Learn how to right-size

In the cloud, right-sizing refers to the process of analyzing the service task on a service-by-service basis and modifying each until their size is commensurate with the need. It starts with selecting the correct server sizes, and further optimization comes from configuring memory, databases, storage, and networking.

3. Continuously search for unused resources

As cloud implementations grow larger and more complex, there is a greater risk of unused, unattached, or idle resources. Unused resources can stem from many sources, but developers or operations teams often use new resources to run tests and forget to turn them off. Idle resources occur when computing power isn’t fully used (even though it’s being paid for). In both cases, routine scanning and resource usage monitoring across cloud implementations can identify these issues so operations teams can address them.

4. Monitor and Correct Anomalies

Robust monitoring capability beyond traditional dashboards and manual analytics is essential for managing and optimizing cloud costs. Detecting anomalies and spikes in real-time enable organizations to apply corrections with the potential to save a great deal of money.

5. Leverage infrastructure automation

Proper cloud optimization requires automated insights and forecasting to continuously right-size and tailor their environments to fit the minimum necessary for their needs. These tools are potent in multi-cloud environments that are challenging to monitor holistically.

6. Choose the proper storage solutions for your needs

Storage options are an often overlooked yet critical component of cloud cost optimization. Organizations must consider both performance and cost requirements when selecting storage tiers. Underused storage volumes should be right-sized, and unattached cloud storage should generally be removed.

7. Leverage elastic solutions understanding they are not a substitute for proactive cloud cost management

Features like elastic load balancers, IP addresses, and block storage are hugely convenient and potentially improve system performance and sustainability. They can also be quite costly, and there is a tendency for a “fire and forget” mentality for these premium services. In almost all cases, accurate forecasting and right-sized service reservations will cost drastically less than relying on elastic services alone.

8. Use Reserve Instances

Use reserved instances: If you know that you will be using a certain type of resource for an extended period of time, consider purchasing a reserved instance. This can save you up to 75% compared to using on-demand instances.

9. Utilize Spot Instances

If you have flexible workloads that can tolerate interruptions, consider using spot instances. These are available at a significant discount compared to on-demand instances, but can be terminated when demand for capacity increases.

10. Implement Cost Effective Storage

There are a number of storage options available, each with their own trade-offs in terms of cost and performance. Select the option that best fits your needs.

Anodot for Cloud Cost Management

Cutting cloud costs means eliminating waste. Anodot offers cloud cost management solutions with real-time monitoring and tailored recommendations that help businesses gain control of their cloud spend.

Robust visibility features allow spending and usage tracking across multi-provider cloud stacks with highly intuitive custom reports and dashboards. AI and ML-based anomaly detection and correlation quickly identify the source of anomalies and spikes and provide real-time alerts to help companies avoid unnecessary expenses. Robust forecasting features autonomously analyze cloud usage data to provide accurate and yearly forecasts and easy-to-use savings recommendations.

Written by Anodot

Anodot leads in Autonomous Business Monitoring, offering real-time incident detection and innovative cloud cost management solutions with a primary focus on partnerships and MSP collaboration. Our machine learning platform not only identifies business incidents promptly but also optimizes cloud resources, reducing waste. By reducing alert noise by up to 95 percent and slashing time to detection by as much as 80 percent, Anodot has helped customers recover millions in time and revenue.

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