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So, you’ve officially made the decision to move to the public cloud. You’ve chosen your provider, and you’re ready to make the most of your investment. Some cost savings are innate to cloud computing, such as reducing your reliance on data center infrastructure and maintenance. However, many businesses move to the cloud to save money, but soon find it is costing them more than before – how is that possible?
Think of it from a consumer example – many of us switch cell phone providers for a special deal or cut the cord on cable and switch to streaming services to save money. Fast forward six months and suddenly that cell phone discount has ended and the bill has ballooned – or you find that between Netflix, Hulu, Disney+, HBOMax and other services, you’re suddenly paying more than your previous cable bill!
Cloud cost sprawl
Public cloud can be very similar – it’s critical to know what you are purchasing… but also what you are using and how that changes over time. Amazon Web Services (AWS), Microsoft Azure and other cloud providers make workload migrations and deployments simple and straightforward, which is attractive to any business looking to move to the cloud quickly.
Unfortunately, many businesses get over-excited and implement organizational-wide initiatives to move everything into the cloud, seemingly all at once. However, cloud providers’ pricing can be layered and complex. This means that some resources incur charges whether a company is using them or not, some are tied to capacity allocated, while with others, you only pay for what you consume. If you aren’t moving the right workloads for the right reasons – and understand the resources you really need – you end up in a situation where it could actually cost you more money and even introduce security holes.
The issue with this approach – essentially migrating everything with a set-it-and-forget-it mentality – means that a company is probably paying for servers, storage and other resources they’re not using. These costs add up quickly and can represent a substantial amount for a mid-market or large enterprise.
This is where it’s critical to think not just about what workloads you want to move to the public cloud, but also to actively manage and optimize them. The public cloud offers excellent cost-saving potential, but knowing how to maximize this opportunity is crucial to your bottom line.
Cloud cost optimization: initial-sizing, right-sizing and tight-sizing
Simply put, cloud cost optimization is the ongoing process of ensuring that you’re not paying for resources you don’t need and continually optimizing for cost savings. The goal is to align the public cloud resources you’re purchasing with your actual usage – all while recognizing that it can change over time, scaling up or down.
In fact, a company’s public cloud environment should be evaluated at a minimum every quarter, using tools to analyze consumption costs, resource usage, security policies and more. Quite often, the analysis will show resources such as servers or storage are ‘active’ and costing the business money, but aren’t being used. Recognizing this and turning them off saves money and optimizes the cloud environment for evolving business needs.
Our own approach views cloud cost optimization as a standard part of our cloud management service. We view it as a continuum in three phases:
- Initial-sizing: we work with a company to build a public cloud environment to suit the needs of the workloads they’re migrating.
- Right-sizing: we regularly analyze and adjust an environment that’s already operational to ensure it’s optimized for performance and cost.
- Tight-sizing: involves recommendations we make to scale back and reduce costs if needed for budget reasons.
By identifying and eliminating wasted resources and proactively managing your cloud service, you only end up paying for the resources and storage you need at that time. This frees up capital that can drive your business forward in other areas.
If you’d like to learn more about how our Managed Cloud Services can help optimize your public cloud costs, click here.