If your organisation has migrated to the cloud, then good for you. Depending on the extent of your utilisation of cloud solutions, you would have already saved your business valuable time, manpower, and money. As enterprises may discover at some point, however, there are also some challenges to embracing cloud computing. One of these is to understand exactly where your cloud spend is going. To avoid inefficiency and wastefulness, it’s important to use cloud resources in the right way by applying cloud cost optimisation.

What is Cloud Cost Optimisation?

Cloud cost optimisation is the process of using resources and running applications in the cloud so that they perform efficient work and bring value to the organisation, in the most cost-effective way possible. This is achieved by keeping a close watch on your cloud services, and choosing, provisioning, and right-sizing the resources you use on specific cloud functions.

Now there’s one thing that needs to be understood at the outset—cloud optimisation should not be understood as outright cloud cost reduction. If you’ve currently budgeted £10,000 for cloud solutions for instance, the goal isn't to simply bring this figure down, but rather to ensure that this is money well spent. So let’s say only about £8k of your £10k cloud cost is being put to the right use, then the rest of the resources are wasted due to overprovisioning, idle instances, lack of automation, and other causes.

Applying cloud cost optimisation may entail simple business management practices, or it could involve complex scientific processes that include operations research, analytics, and modelling and forecasting.

Cloud Optimisation: Why is it Necessary?

Most organisations are well-aware of the perceived benefits of cloud adoption, and significant cost savings has been identified as a major advantage. For all the anticipated savings however, a recent HashiCorp-Forrester report reveals that a whopping 94% of enterprises are overspending in the cloud. It appears that in the eagerness of moving to the cloud, many companies fail to first evaluate exactly what they need, and end up on a cloud journey that’s unnecessarily expensive.

Making cloud optimisation a priority means you get to take control of your cloud expenditure—know how much you’re spending on cloud services and what drives these costs. This not only ensures that you’re getting your money’s worth on your cloud spend, but also maximises the business benefits of cloud computing.  

Best Practices for Cost Optimisation in the Cloud

Implementing cloud cost optimisation can be a complex process for many companies, and just getting started can be overwhelming enough. That said though, there are a few best practices that are straightforward enough for businesses of any size to carry out.

1. Perform a regular audit of cloud costs. There’s really no way of knowing whether your costs are too high if you don’t know in the first place what you’re spending on. Perhaps you may have started with the correct allocation of resources on the right cloud features, but requirements could have changed over time and your provisioning remained the same.

   An audit of cloud costs and resource allocation, regularly done, could help identify areas where there is overpaying and overprovisioning (or the opposite), or when different cloud solutions are essentially performing the same tasks.

2. Create a system for requisitioning and decommissioning. One of the most common causes for cloud wastage is unused resources. This is because teams may request for allocation of certain resources at one point, and then simply abandon these at a later time when no longer in use.

   When a proper process for requisitioning of resources (and the subsequent accountability for proper decommissioning) is in place, there is less chance that idle resources will remain in the system.

3. Regularly look for unused and/or inactive resources. Unused or inactive resources that are lingering in your network will continue to be part of your cloud spending unless these are located and removed. While policies can be enforced for resource requisitioning and decommissioning, old habits could die hard and therefore, doing a periodic search for idle assets won’t hurt.

4. Leverage built-in optimisation tools. Aware of the rising scale of cloud waste, major cloud service providers such as Amazon and Google are doing their share of helping enterprises manage their cloud by providing optimisation tools. These tools are designed to allow visibility into usage, identify areas for potential optimisation, and even trigger custom alerts when certain costs are exceeded.

5. Develop a cloud strategy that works for your enterprise. A company’s utilisation of cloud applications should be well in line with their business objectives. Having a cloud strategy means you clearly define how cloud services fit into your operations and organisational goals. A startup, for instance, would focus more on having speed and scalability to build a product fast; an obvious case for using managed cloud services instead of building their own infrastructure.

On the other hand, a traditional company (not yet migrated to the cloud) might just want to initially explore cloud applications that would improve operational efficiency. Once you’ve identified what your cloud needs are, it’s easier to set up a cost-optimised cloud from the start.

Your Next Move Toward Cloud Optimisation

Whether you’ve been in the cloud for a year or ten, optimising your cloud could go a long way in achieving cost efficiency. If you’re looking to start auditing your usage and/or getting the most from your cloud, a managed services provider can assist you with your cloud cost optimisation efforts.