7 Effective Tips on Managing Your Cloud Costs

Back in ‘79 the Flying Lizzards sang “The best things in life are free”. They obviously had no idea that Cloud Computing would come to rule the world.

But this has been the exact opposite in the technology industry since it was feasibly commercialized. You essentially pay a premium for what is considered industry-leading technology. 

And although this is still true today (ultimately paying more for what you think is better) the cloud levels out the playing field to some degree.

Cloud makes the same technology available to everyone at a comparable cost. And it actively gets cheaper the longer you plan to use it. These commits give the bigger consumers more leverage over smaller players, but byte-for-byte it’s fair game. On top of that, everyone now has the ability to make global, world-class deliveries.

Simply put, Cloud gives us the scale to actively apply best practice to our solutions. 

While managing your cloud spend can be painful, we’ve made a few observations over the years to keep in mind when considering your cloud costs.

Keep A Sharp Eye On That Bill!

It’s important to note that the Hyperscalers building out and making these facilities available to us do not do this for love and charity. Sure, they are promising you the unlimited. But they do so without assuming your ability to pay for it.

The onus is on the consumer to make sure that they build their solutions in such a way that the costs are absorbent.

You are responsible for your cloud bill. None of the Hyperscalers will give you a friendly reminder saying “This is very expensive, are you sure you want to build this?”. 

Remember that if you select it, you provision it – and straight into billing it goes! 

#7) Don’t Treat The Cloud As A Hardware Refresh

The cloud, in all it’s flexibility, is built on very smart design.

This means that it uses:

  • Far better hardware than most businesses are able to afford;
  • A highly superior network and infrastructure;
  • Orchestration/engineering expertise that are superior to most organizational capabilities. 

For this reason, going from on-premise to cloud is not a like-for-like scenario. You really do not need to make everything the same and replicate your existing setup.

Know your baselines, monitor your workloads and adjust.

Especially if you are using the cloud to run virtual machines. They run a bill up the quickest in any of the Hyperscalers. 

#6) Modernise Your Solutions In The Cloud

The most common first step to cloud is a migration.

Bear in mind the first tip! If you are going to migrate to the cloud with your current technology stack, be sure to right size it. 

But don’t just leave it there! Modernise.

Every hyperscaler has cloud-native solutions for everything you might need. These are full consumption-based services, which hyperscalers often fully manage by the themselves. This means that your internal teams only have to manage the code and customers/user integration.

By all means, use the cloud to spare yourself a capex-intensive hardware refresh and reduce your risk with aging hardware. But the very next step should be modernising your applications and technology stack.

#5) Use Hyperscaler-Native Solutions

Every hardware vendor will be pushing for you to use virtual appliances in the cloud.

The Hyperscalers have even accommodated them with a marketplace to push these solutions.

The drawback is that, often, these solutions are built on the compute mechanisms offered by a Hyperscaler. So they are VMs, which we have established is the most expensive way to consume services in the cloud.

Furthermore, the architecture architecture behind bigger hyperscalers prevents you from access to the hypervisor you might need. Which is helpful in on-premise virtual appliance deployments. This means that you often have to modify the way your VPC works to accommodate these appliances. 

I acknowledge that there are very real features offered by hardware vendors that might not exist in the cloud. And in those scenarios, by all means, use them, but if you are looking for a load balancer or a firewall, compare your chosen Hyperscaler solution to your preferred OEM and see if, feature for feature, the Hyperscaler solution meets the brief. 

If it does, you will save a bucket on licensing and engineering complexity.

#4) Use SaaS Solutions

Often when we look at what needs to go into the cloud, we bucket in certain solutions such as a payroll or time management system, for example. More often than not, these get looked at and the standard response is “We don’t own this software, so it will need to go into VMs in the cloud”. 

As mentioned initially, virtual machines are the most costly way to consume cloud computing, and where feasible, should be avoided.

More often than not, the vendors of these systems you are looking to migrate have a cloud based service offering which doesn’t rely on you having to build, pay for and maintain cloud infrastructure.

Engage with these vendors and see what they can offer from a SaaS perspective. Do the due diligence on security and accessibility. This will be time far better spent than shoehorning these solutions into the cloud at a premium.

#3) Embrace a Multi-Cloud Approach

For the most part, all the hyperscalers offer similar services. Each also having their own niche services unique to their world. For this reason, there might be scenarios where a specific Hyperscaler is the best option for the workload you are looking to put into the cloud. 

Microsoft has an amazing solution for it’s SharePoint offering. It wouldn’t make sense to keep VMs running in another Hyperscaler for SharePoint. 

This ties into tip 4, which speaks to using SaaS offerings where they exist.

There are also security and availability considerations. 

Certain hyperscalers are closer to your customers than others. In a global business, it helps to be open to using all the providers. If Cloud gives you the ability to apply best practices, you may as well apply best practice in the best of breed provider for a solution.

#2) Edge Computing Is Not A Swear-Word

There is often an “All In” approach taken when an organization moves to the cloud.

Not enough thought is given to the potential impact on the user or customer experience. Especially with monolithic workloads.

Customers are not always close to the cloud, despite the top 3 hyperscalers actively fighting for space to open up. This means that edge computing needs to be part of your cloud strategy from a cost perspective as well as an experience perspective.

It should never be an expansive footprint and it should always be done with the chosen hyperscaler/s edge product suite in mind. 

It can provide a tangible cost saving from the perspective of getting as close to your customers as possible, as well as saving on wasted time and money trying to get a solution that just isn’t right for the cloud. 

#1) Make Cloud Costs Visible To The Cloud Team

Traditional Operations and finance teams have had a great wall of sorts when it comes to the cost of hardware and software. Historically, only technology management was privy to those expenses. 

Typically there was a cost cutting drive every few years due to the very narrow visibility of these expenses and that was the first the Operations knew that the costs were getting out of line.

This way of work should not be carried over to the cloud. Especially given the granularity of access that can be given from this environment.

If a team is managing a specific solution or tenant, give them the ability to see those costs. It will help them understand that there is a cost associated with everything they do, and it will help them look for potential savings in their solutions.

It will also force them to understand that when provisioning something, the highest value configurable is an option, not a target.

Every Hyperscaler also has a freely available cost calculator which engineering teams can use to understand the financial implications of what they are proposing. 

These do not reflect any agreements or commits with the Hyperscaler, so billing tends to generally be higher than what you might think. But as a way to inculcate cost consciousness in the cloud, this is the first step that businesses should take.

The Best Things In Life Aren’t Necessarily Free

By observing some of these principles, you will be able to prioritize innovation in your technology stack, as well as effectively manage the costs associated with cloud computing.

It will never be free, but you can manage it. And in so doing, become the necessary leverage to grow your business affordably.

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Or! If you’re ready to take the next step towards digital transformation, let this bring you closer.

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