Cloud Cost Management Archives

Why Most Companies Are Failing at Cloud Cost Management?

Posted on July 20, 2020 | by Steve Upkin | Leave a Comment

As cloud storage becomes increasingly popular large numbers of businesses are shifting their data and resources to cloud-based servers. The days of in-house servers are past as cloud servers are gaining more popularity today. However, there are numerous companies that complain that instead of minimizing expenses there seems to be no discernible change in their cost of business operations. This is where effective cloud cost management tips come handy.

Today, as businesses aim for higher workload scalability they are swiftly shifting their apps and database to cloud servers. However, the successful migration of data and apps to cloud servers is only the start. Essentially, businesses mostly get satisfied after shifting to cloud servers despite the increased storage costs due to improper cloud cost management.

Hence, our experts came together and found the reasons why most companies fail at cloud cost management and derived tips for effective and better cloud cost management.

Reasons Companies Find Cloud Cost Management Difficult

Thanks to the incredible computing power and secure storage, increasing numbers of companies are shifting their web services and apps to cloud-based servers all over the world. Normally, companies tend to set a specific budget for cloud services. Their resources are pre-assigned to ensure optimal cloud usage too. Despite this, there are many companies who complain about increased operational costs.

Here, we take a look at the major reasons that companies find increased operating costs after shifting to cloud-based servers:

1 – Inflexibility

AWS provides auto-scaling that lets you scale any system automatically and meet the increasing demands. However, apps and services that need a longer time to boot up may not scale according to the changing business needs.

2 – Sub Par IT Infrastructure

Often, in a bid to migrate faster to cloud computing and storage, business organizations tend to choose sub-par IT architecture. This causes inefficient workload performance and increased AWS cloud cost management.

3 – Predicting Complications

Predicting the budget for new services or completing the changing demand for currently-used services is complex, which often causes inaccurate budgeting and fault in costing.

4 – Geographical Price Variation

The plans for AWS cloud services depend on the specific region where the storage server is physically located. In case you do not pay attention while selecting the server location as per your business requirement it can result in increased expenditure for cloud server services.

Why Most Companies are Failing at Cloud Cost Management – Geographical Price Variation

5 – Less Use for EC2 Instances

Check to see if your EC2 instance is sitting idle or being utilized less than it should be. It is important to identify such instances and make sure you do not have to pay unnecessarily. In addition, it is important to ensure that your EC21 instances are shifted to the most updated version too.

How Companies Excel at Cloud Cost Management

If you’ve migrated to cloud storage but still feel that the cost of cloud services has only increased your spending instead of decreasing it, then there are certain aspects that need to be analyzed. Although AWS cloud services are aimed at increasing efficiency and decreasing server storage and computing costs, companies fail to get the
advantage due to several other reasons.

Let’s check out the top ways that you too can save on cloud cost management efficiently:

1 – Select the right AWS Managed Services

A certified managed service will get you professional help all along the way. With access to super-fast cloud computing technology, the transition from conventional servers to cloud servers will not only be quicker but also cost-efficient at the same time.

2 – Keep unused AWS services shut

Instances not currently in use are the only burden on your cloud budget. You will need to ensure that idle instances are shut down to avoid unnecessary billing and to prevent affecting the configuration of your current cloud architecture.

3 – Choose the correct storage class

AWS provides the Amazon S3 storage through 5 different price plans. The five plans are divided according to their storage amount, data volumes, HTTP GET requests, etc. Different types of storage have different costs depending on the above-mentioned factors. Hence, choose the storage amount which your business needs and avoid paying unnecessary expenses for additional storage and computing power.

4 – Select the appropriate type of instance

Choose the instance families that are according to your application work requirements. When you know how much memory you require for running your services, you can easily and effectively minimize the cost of cloud services.

Following the above tips for cutting down on excess cloud cost management. Choose the AWS cloud services according to your specific requirements and avoid paying for unwanted and unneeded cloud services.

cloud cost optimization strategies

aws cost reduction strategies

Cloud Cost Management: Strategies for Cloud Costs Reduction

Posted on November 7, 2019 | by Ozzy Brightrose | Leave a Comment

Cloud cost management symbolizes managing and using cloud services in a cost-efficient manner to maximize the business. In particular, the term refers to organizing expenses by monitoring cloud resource usage and business needs.

These days, cloud computing has become an ever-evolving trend. Most of the businesses and IT departments now follow this cost-conscious approach to innovate business better.

Moving business to the cloud offers dramatic improvements, and increased profits. It is possibly the preeminent technique to lower spending and boost revenue.

There is no need to prepare an extra budget for data storage, security, support, and all other resources.

Why Go for Cloud Cost Management?

Cloud cost management is all about analyzing overall cloud costs and strategizing to spend the amount smartly. From identifying the resource consumption to infrastructure planning, the cloud cost management strategy covers everything.

Cloud technology is truly an innovative and practical approach to improve business performance and efficiency.

A business can easily integrate the required resources and calculate overall costs related to cloud technology.

There come exclusive cloud cost models and subscription plans to make a natural choice.

These cost structure models cover everything from scalability and security to all-time support and boost-up performance.

Cloud cost management produces an excellent impact on the overall businesses. The business data directly operates with cloud and poor cost management can also impact negatively. Even the poor cost models can create numerous issues for the business.

So, it is better to choose the resources and services as per business requirements. By doing so, the business grows efficiently without paying additional bills for unused resources.

Reducing Cloud Spending with Cloud Cost Management: The Tips

Various options, such as cloud models, subscription plans, and more, assist in trimming down the cloud costs by a considerable margin.

When operating the business on Cloud, spending is reduced to one-third or less. That’s why most companies these days migrate to cloud technology.

Simply put, moving the business to cloud is the ultimate decision to trim down infrastructure, hardware, network, security, storage, and many other costs.

And, when operating with the cloud, you pay only for the used resources and not for the ordered ones.

Scalability and flexibility are the two primary reasons most businesses are migrating to cloud.

But, those business owners know how fast costs grow when it comes to expanding services with innovative resources. And, it becomes tricky to manage the expenses.

Well, that’s when cloud management comes to the rescue.

Let’s put together the tips to reduce cloud costs & get the most of cloud cost management.

Right-Sizing Server Instances

Choosing server instances that perfectly suit your business workload needs would not harm the budget.

Right-sizing is a part of cloud cost optimization, and network instances come first when it is about reducing the cloud costs.

Having too many servers for the business, which are unused, results in adding unnecessary charges to the monthly bills.

There are cloud providers named Google Cloud, Amazon Web Service (AWS), and AZURE, which offer server-optimized options available at competitive prices.

Modifying server instances to an adequate size, which are actually required for workloads, would work the best to reduce regular bills.

Removing In-active Resources

When it comes to cloud cost optimization, in-active or unused resources turn out to be the chief facet.

And, this remains the most unnoticed part while executing cloud management task. It’s better to remove the unused resources after the process is done.

These purchased and no-longer-used resources increase the monthly bill and nothing else.

So, finding and getting rid of such resources would be a smart decision to reduce cloud costs.

Choosing Discounted-Reserved Instances

Who doesn’t love discounts? And guess what? Even these cloud services are available at discounted prices, under specific conditions.

The virtual servers or cloud instances are available at competitive prices too. The Amazon Web Service (AWS), Google Cloud Platform, and Microsoft AZURE are some of the top cloud providers offering such discounts.

The Amazon Reserved Instances, Amazon EC2, is probably the best to reduce IT costs.

And, yes, choosing a specific cost and time-efficient instance type would work the best.

Prefer Storage Tiers

Storage plays the most crucial part in overall cloud costs. Starting from hardware spends to increasing cloud storage when required, these spends can generate a surprising bill for you.

It’s better to choose storage tiers, or as per the business requirement, to reduce extra spends.

There are storage tiers to store and backup data in the cloud. So, if you do not wish to use the cloud data, then it’s better to save it in a cheap-storage tier.

The charges are basically calculated by the Retrieval Time and Requests. In particular, this means the costs are calculated by the data-access rate, storage capacity, and bandwidth.

A Take Home Message

All in all, reducing cloud costs with cloud cost management strategies can be achieved precisely.

Following cloud cost optimization techniques would probably work the best to save some bucks. With comprehensive cloud management strategies, businesses innovate better and quicker.

A laser focused precision when optimizing your cloud cost demands an advanced calculation. Go ahead and calculate your cloud cost with these calculators designed by our cloud economists:

AWS Lambda Cost Calculator

S3 Cost Calculator

EC2 Cost Calculator

AWS Data Transfer Calculator

aws lift and shift migration

What Cloud Cost Management Actually Means?

Posted on October 29, 2019 | by Ozzy Brightrose | Leave a Comment

What is Cloud Cost Management

Cloud Cost Management is Not Just About Switching the Platform

Switching to cloud services is often at least as much about cost management as it is about the flexibility offered by cloud infrastructure.

There are indeed many cost savings to be made by switching to a cloud platform. It is, however, also true that companies, especially SMBs may not really understand what this actually means in practice.

Cloud computing is basically about swapping capital expenditure for operating costs

Let’s create an analogy. If you buy a house, you have to spend a whole lot of money buying the house. Then, you have the responsibility of repairing, maintaining, decorating and furnishing the house.

Everything that needs to be done to the house comes out of your pocket. Now, let’s say you rent, you don’t have to find an upfront payment, just your monthly rent.

Likewise, anything to do with managing the house is your landlord’s problem not yours. This is basically the situation with swapping in-house data centers for cloud computing.

Of course, the analogy isn’t perfect, far from it. If you buy a house, you build up equity in it, which is a benefit. You can also expect it to increase in value over the long term.

Mainstream IT equipment, by contrast, almost invariably depreciates in value, often very steeply. It also requires a whole lot more maintenance than the average house.

The general point, however, is still valid. Moving to cloud services is not necessarily cheaper, but it is often a whole lot more cost-effective than running in-house data centers.

Three reasons why cloud platforms can be more expensive than you think

There are three main reasons why moving to cloud computing can work out more expensive than you think it should.

The first is, quite simply, that you don’t understand your usage patterns. This is vital to cost-effectively managing cloud services.

The second is that you waste your resources. In a data center, it doesn’t really matter all that much if you leave devices idling.

Yes, you use electricity, but you might use even more to power them down only to power them back up again.

In the cloud, there is a direct link between cost and usage. If you leave an instance “idling” when you don’t need it, then you are wasting money.

Similarly, if you fail to detach storage when you close an instance, you are wasting money.

Basically, you need effective cloud governance to ensure you only use what you need and do not waste the cloud resources for which you are paying.

The third is that cloud vendors will try to upsell services. Just remember, no matter how great a discount you’re getting, it only has value if you actually really need the cloud service or really want the cloud service.

You may get some good deals through upselling offers but resist the temptation to buy cloud services just because they’re at a discount.

Three unexpected ways the cloud could save you money

There are three indirect ways, the cloud could actually save you money and could work out cheaper than running your own in-house data center.

Firstly, you can get rid of any hardware you have on-site. You can then reassess your office space and may be able to put it to more productive use.

Even if you can’t, you should certainly let your insurance company know that the equipment is now gone. It may lower your premium. As a minimum, keep it in mind when you go to renew your policy.

Secondly, you no longer need to try to recruit and retain IT staff. For SMBs, this can be a huge benefit. There is a massive skills shortage in IT, especially in IT security.

This means that experienced IT professionals know they can command salaries way beyond anything the average SMB could afford.

Additionally, working for larger companies generally offers more opportunities for personal and professional development and in a fast-moving sector like IT, that can count for a lot.

Thirdly, switching to cloud services facilitates remote working.

As a minimum, this offers an obvious disaster-recovery strategy. In business terms, a “disaster” does not have to be something that makes headline news across the world. It just has to be something that disrupts your access to your habitual place of business.

Remote working can, however, serve all kinds of useful purposes. For example, it can be used to help staff manage their work/life balance.

This can be very useful for retaining them. It can also be used to address a lack of office space and/or a lack of local staff with the necessary skills.

The ability to onboard remote workers can also make it vastly easier to bring in freelancers for short periods, whether that’s a few hours a week long-term or when you need help in peak seasons.