What is Cloud Cost Optimization?

In today’s world where everyone is switching to cloud services, everyone should know about cloud services. Cloud services refer to the services accessed over the internet that can be used by companies and users that do not have any physical servers or run the software on their own machines.

Cloud optimization is a technique that allows an enterprise to understand and manage the budget and any needs associated with the technology. It also maximizes the business value using the cloud.

Now, Let’s explore the 15 best practices to optimize your cloud costs.

15 Best Practices to Reduce Your Cloud Bill

In this blog, we will explore 15 best practices to reduce your cloud bill.

1. Always Review the Pricing Structure of the Cloud

You know that understanding cloud service spending is different from knowing how much other vendors charge for the same services. You can easily leverage this information to identify the cost structure and generate savings on that. 

For example, In Hybrid Cloud AWS has a complete and flexible hybrid strategy whereas Google Cloud’s strategy is still in its nascent stage.

Analyzing this information and understanding the cost structure of the cloud will allow you to make better spending decisions and avoid paying for inefficient resources.

2. Optimize cost by setting budgets

You can easily control costs by monitoring and ensuring all the parties know about the goals and budget of each and every project. Create a yearly budget according to your business needs. Monitor the expenses every month, and check the miscellaneous expenses.

3. Identify the Unutilized resources

Every month some resources will remain unutilized. Identifying the unutilized resources will help you to optimize the cloud cost. 

For example, Administrators and developers equip every time a temporary server for some particular task and might need to remember to un-equip it later and it will make use of some of the resources. These types of activities will result in inflated cloud bills that charge for useful resources. A cloud cost optimization strategy will help you identify unutilized resources and remove them to reduce unnecessary expenses.

4. Utilize the Idle resources

You can optimize the cloud costs by finding the resources that are currently not being used at the moment. You must know that cloud providers charge for idle resources, even when you are not using those resources. You can optimize it by identifying those resources and utilizing them to reduce costs.

For example, If your Amazon Elastic Compute Cloud (Amazon EC2) utilization is 10% and your cloud provider is charging you 100% then you are wasting a specific amount of resources.

You should find all these idle resources to reduce costs. You can easily leverage cloud features such as load balancing and on-demand options to optimize the capacity needed by your organization.

5. Start New Revenue Streams

Cloud cost optimization can be done by starting a new revenue stream, with a tool like CloudZero’s platform you can find out the in-demand products and services among your users. It is like finding a niche and providing services to the customers, by doing this you can generate new revenue sources.

6. Right-sizing the services

It simply means to analyze and modify the computing services to optimize size. The right-sizing services generally include database, storage capacity, servers, graphic performance, and throughout.

You can use some tools to right-sizing the services like; EC2, Lambda, Batch, Kubernetes engine, and many more.

7. Opt for Reserved Instances

Reserved Instances is a billing discount tool that allows businesses to obtain significant discounts. 

For example, at the time of purchasing a cloud service, you select an instance type, generally availability zone or region, and commit to using the service for 1year. Most of the cloud providers will offer discounts only when you pay up-front.

In Cloud cost optimization, we should remove the instances that are not in use as it can create vulnerability.

8. Opt for a Savings Plan

It is a pricing model just like Reserved Instances just more flexible and will help you to save up to 70% on your AWS cloud over On-Demand Pricing.

A Savings Plan provides more flexibility and automation and is a better option for some users. Opting for Reserved Instances and Savings Plans will depend on the needs of your business. 

9. Leverage Spot Instances

Spot Instances are available for last-minute purchases. As AWS auctions its oddment resources at a comparatively lower price. These are ideal for batch jobs as you can terminate them immediately because they are not critical. Spot Instances use leftover EC2 capacity that’s 

Low prices than On-Demand Prices. You should not rely on Spot Instances as they are not always available and sell out instantly.

10 . Opt for a Cloud Native Design

Shifting from existing cloud systems with optimized cost ones to leverage virtual software capabilities. The Well-Managed tool provides outstanding practice recommendations for cloud architectures. You can also use AWS’s extensive documentation.

11. Monitor Cost Anomalies

Cost anomalies are abnormal or unexpected costs that deviate from the normal or expected budget spent in an organization’s cloud consumption. You should use the cost management console to set cloud budgets and predict AWS costs, and you can optimize the overall costs of the cloud. The Cost Anomaly detection feature that monitors costs and usage uses machine learning to identify spending anomalies in the cloud. 

After doing the root cause analysis, you can address the problem to prevent unexpected loss.

12. Opt for Appropriate Storage Options

Amazon S3 is the most popular cloud storage option for optimizing the cloud cost. It offers virtually unlimited storage, easy to use and it easily integrates with a wide variety of AWS services. You should be aware of the AWS S3 services of various tiers as they come with different costs, so opting for the best tier is significantly important to refrain from exhausting the budget. Additionally, it can automatically track your usage patterns and select the optimal storage tier for your budget.

13. Identify & Optimize Software License Budget

Software Licensing is a major part of operating costs across both physical and virtual infrastructure. Managing software licensing manually is a very difficult task, it can also lead to increasing the risk of paying for unused software.

In AWS Marketplace you can find a wide range of public and commercial Amazon Machine Instances(AMI). License tracking tools like Densify can help you track AWS cost and usage so you can identify idle software licenses.

14. Treat cost Center Spending

Cloud optimization is not effective if you are not tracking the budgets. In an organization, there are various departments that may individually track their budget. Optimally one way is for each department to have their separate AWS account. However, it will require more AWS accounts that will charge subsequently more. So, opting for the right number of accounts will depend on the needs of the organization.

15. Opt for Single or Multi-Cloud Service

In a Single Cloud deployment service, you are relying on a single cloud service for all storage and computing needs, You can get discounts with a volume purchase. Meanwhile, in a Multi-Cloud service, you can use more than one cloud service to support various applications which offers flexibility and various pricing options. Opting for Single-Cloud Service or Multi-Cloud Service depends on the needs of your organization.