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Cloud Cost Optimization

Cloud Cost Optimization – Steps to make note of – Part 2

Cloud resource provisioning took a paradigm shift from what it was before 10 years. It is now rapid and agile. Solutions like serverless cloud computing, and Infrastructure as a Code further simplify the scenario. Heavily consumed manual efforts are now redirected to core tasks. Cloud resource provisioning is no more a daunting task, but cloud cost optimization is.

We have discussed cloud cost optimization best practices – Part 1 before, let’s continue with the further steps in this article.

Step 7: Narrow down

Enterprises use multiple tools for cloud cost optimization. They prefer to stick with native cloud service provider tools for better reliability. 

Example: Businesses using AWS cloud, can make use of,

  • AWS Cost Explorer – for managing and visualizing the cloud usage
  • AWS Cost Anomaly Detection – for detecting cloud spending abnormalities. This utilizes machine learning and statistical algorithms for accurate cost overage detection.
  • AWS Trusted Advisor- for recommendations on reducing costs, improving security, performance, etc. 

Many other native tools are also available like AWS CloudWatch, and AWS Budgets that aid cloud cost optimization. Hovering over multiple tabs for information can complicate cloud practitioners’ decision-making. 

Adopt a single solution that can unify all the results under one pane like CloudCADI that helps you to track, monitor, and restructure based on intelligent recommendations.

Step 8: Use Showback

Cost overages can occur from various sources. Overview of the cloud expenditure can only tell us how much we are wasting. Success of cloud cost optimization doesn’t stop right there. Identifying the source and rectifying the issue is the right way but it requires enormous effort.

Example: In Microsoft Azure, when we create a VM, a public IP address, network security group, and regular network interface is also created. When this VM is found to be unused for a longer period, the team decommission it to save the cloud costs. But if they miss decommissioning the other components (Public IP, Network interface, NSG) it still accounts for the monthly cloud bills.

Cost optimization reports should help us to filter it down and identify the lowest individual unit, the source of unintended spending. 

CloudCADI can show you pod level details of cost anomalies.

Step 9: Map them 

Every cloud cost optimization activity is directly coupled with the business benefits. List your business KPIs and benchmarks. Involve a stakeholder from every team like engineering, management, finance, and operations while figuring out KPIs. It’s crucial to map cloud spending with the business value it adds. 

Example: Cloud spend per customer, cloud spend per application

This exercise will help you to deeply associate engineering activities with cost and make every stakeholder’s decision financially accountable. 

Step 10: Keep in store

When you are aware of the roadmap and confident with the computing demand for the coming days, it’s safe to procure cloud resources well before. Bulk procurement in advance helps management on opting for better offers or discounts from service providers. 

Example: Reserved Instances. AWS’ RI can provide up to 72% discount compared to “On-Demand” pricing. It also offers the flexibility to alter families, OS types, and tenancies when Convertible RIs are chosen.

Related reading: Reserved Instances 

Step 11: Go with the same 

Before choosing the cloud service provider audit the internal environment thoroughly. If you have multiple Microsoft applications, it is good to go with Azure which saves integration costs. If there is a need for a short-term compute resource, go with a “pay-as-you-go” pricing model that allows increasing or decreasing compute capacity on-demand and pay for minutes (VMs) or seconds (Container instances). Whereas, for low latency microservices, and big data processing, GCP is a better option. 

Step 12: Don’t let it rest

Cloud cost optimization is not a one-time setup to build and leave aside. It is an ongoing process that is closely associated with business productivity and growth. When the organization scale, cloud dependency increases piling up the cloud resource volume to meet the growing demands. The need for faster delivery, customer experience, rapid innovations, and competition foster organizations to less worry about the selection, allocation, tracking, and costs of the cloud workloads. Generally, they lock in with the existing cloud vendors for easier procurement and support.

Final thoughts

The steps stated above are just a few. It is not the end of the cost optimization setup. As we discussed earlier, it is an iterative process that is to be carried out each day. 

Does the entire process sound so complicated? It is not when you choose CloudCADI. If you would like to know how? allow us to explain more. 

Dial us today!

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Cloud Cost Optimization Cloud FinOps Cloud Resources Management

Cloud cost optimization – Steps to make note of – Part 1

Cloud cost optimization is a practice any organization should adopt to ensure they SPEND RIGHT on the cloud. We have discussed what are the benefits of cloud cost optimization in the past. Let’s see what are common challenges in implementing the same and how to overcome them in this article.

Common Cloud Cost Optimization Challenges

While cloud cost optimization offer remarkable benefits, there are number of challenges that organization might face when trying to achieve the optimal savings. To mention a few,

  1. Lack of visibility into cloud costs : Without proper monitoring and analysis, it can be challenging to identify areas where cost optimization is required.
  2. Lack of expertise: Many organizations do not have dedicated cloud finops professionals or resources for managing cloud expenses.
  3. Lack of continuous monitoring: Without consistent monitoring, organizations might miss the opportunities for savings at the right time.

Now let’s see one by one how to overcome these below,

Step 1: Arm them

Every cloud stakeholder should be armed with documents, tutorials, training, guidance, and tools to effectively handle the cloud environment. FinOps products should have the ability to provide graphical representation and reports on cloud usage. Reports should facilitate the stakeholders to dive deep into granular pod level, node level, business unit level, tag level usage, associated cost details, etc. 

For example, our product CloudCADI offers reports and trend charts covering parameters like

  • CPU utilization
  • Memory
  • Disk Read
  • Disk Write
  • Storage Disk Read
  • Storage Disk Write
  • Network Received
  • Network Sent
  • Storage 

These reports should equip the cloud practitioners with the necessary cost information for effective decisions.

Step 2: Herd them

One of the major challenges the enterprises face is cross-functional transparency. There may be two app development teams developing two different cloud-native applications without knowing that they both use different monitoring tools that satisfy the same purpose. Procurement teams go with a vendor based on the options provided by the cloud teams and better negotiation with the vendor. They have little or no interest in the usage of the tools by diverse teams.

It is crucial to identify these common requirements and consolidate the resources accordingly. 

Step 3: Pivot on center

Cloud management is a tricky process. Cloud involves the operations team, finance team, cloud engineers, cloud architects, the procurement team, LoB managers, C-suite executives, etc. conveying a different message. Requirements vary from time to time. Organizations should have a centralized cloud cost optimization/FinOps team to mitigate the differences. Any cloud financial decision like buying new licenses, renewal, going hybrid cloud, etc., before reaching the CXO’s office should pass through the FinOps team’s scan.

After a thorough scanning of real needs and expectations, costs and business value mapping should be carried out. Once it is acknowledged, it should reach the decision maker’s table for approval. 

Related Reading: FinOps principles

Step 4: Analyze your cloud

Optimizing starts with analyzing. Review your organization’s cloud usage and spending patterns. This helps to identify the areas that needs restructuring or elimination and develop a targeted cost optimization strategy. You can either do this with a dedicated FinOps team or an effective cloud finops solution like CloudCADI.

Step 5: Retire the unused

There are resources that secretly weigh the cloud bills. Cloud practitioners set up auto-scaling to ensure enough capacity to face the traffic demands and improved cost management. Let’s consider Azure GPU machines. For high-end remote visualization, ML, and deep learning, GPU category, N-series virtual machines are ideal.

They accommodate low latency, high-throughput network interface for graphics or video-intensive workloads. When the engineers miss out on calculating the right number of nodes and configure in excess, the organization ends up paying for these zombie nodes.

For example,

Azure Instance NC12 with 1XK80 GPU offering 12 vCPUs costs $1.8 per hour. Consider 10 such instances counting 120 vCPUs configured but 5 left unused. At the end of the month, you need to pay $13140 instead of $6570 to Azure midst of no accountable benefits. 

It is hard to identify these nodes until you address these in the line items of lengthy cloud bills. For larger organizations handling several applications, identification and mitigation go out of manual efforts. Options left with us are to manually plan and closely watch the configuration process, identify the unclaimed assets, and retire (which is not always feasible) or to go with cloud cost optimization products.  

Step 6: Leverage services from your CSPs

Cloud Service Providers(CSPs) provide various cost saving options to facilitate clients in saving their cloud investments. Savings plans, discount on bulk scaling, reserved instances are a few options to make use of and realize significant cost savings.

Organizations tend to lose millions when they miss out on optimizing their new workloads along with the previous. Select a FinOps solution that runs along with your vision, each day dragging everything under one umbrella.

Keep optimizing. CloudCADI is with you!

Find this useful? Read Part 2 of Cloud Cost Optimization Steps here.

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