Cloud Cost Optimisation: How to manage rising cloud costs

As more organisations look towards the cloud as the future of business technology, it’s becoming increasingly important for any business that wants to stay ahead to consider implementing cloud technologies into its infrastructure.

But, as with everything right now, cloud costs are rising —meaning that you need to be aware of how to ensure that the cloud is economically viable for you. After all, all of the benefits of the cloud don’t matter if you have to pay sky-high prices for your cloud implementations.

In this blog, we will discuss rising cloud costs, why cloud waste is important to consider, and how you can use optimization to help your cloud implementation work by saving costs wherever possible.

Why are cloud costs increasing?

As with everything, the technology industry suffers from a massive cost surge. This includes the cloud, which requires a lot of resources to make work. With that and the rise of generative AI technologies, the cloud has become pricier than at its onset.

Generative AI requires many resources to be utilised effectively, and so to accommodate these technologies, cloud costs need to be increased. Due to the sheer amount of cost, it only makes sense that the cost is passed down to the end user to ensure that these costs can be covered.

Furthermore, the rise in labour costs is another huge reason the cloud is getting more expensive. Running the cloud requires manpower to install, maintain, and keep functional. With an on-premise system, all that cost would be on the end user, but the cloud aims to take care of everything. So, when labour costs go up, the service cost also increases.

Another major reason that cloud costs are so high is the high level of ‘cloud waste’ in the corporate cloud. Cloudwaste is when a cloud service remains underutilised compared to what’s being paid. This results in the mass haemorrhaging of cloud resources from corporations worldwide. 

This is why ensuring that your cloud implementation is optimised is vital, as it will help reduce your costs immensely by removing the extra costs associated with cloud waste.

What are the familiar sources of cloud waste?

Cloud waste is a massive problem, costing businesses approximately $26.6 billion in 2021. Knowing why cloud waste exists is important to tackling it within your organisation, as not keeping an eye on it will accrue a massive amount of costs.

Generally speaking, the common cloud waste causes are —

·        Overprovisioning: Overprovisioning is when you allocate more than you need to your cloud implementation. You’ll pay for whatever you allocate, meaning any excess usage will be costly.

·        Purchasing for more prolonged periods: Often, organisations will purchase a service longer than they require, meaning they’ll have to pay for unused extra time.

·        Duplicate purchases: Sometimes, organisations will purchase the same or similar services multiple times when they don’t need to.

·        Not De-provisioning orphaned resources: If you fail to de-provision an account within your implementation, it will become an ‘orphan’ account and take up resources.

·        Not focusing on cloud maintenance and optimisation: Not looking after and optimising your cloud implementation will require more resources and ultimately cost more.

Cloud waste can lead to many issues when it comes to budgeting and planning, as it can result in spending more than you planned.

How to implement best practices and tools for cloud cost optimisation

Visibility

Cloud visibility is the ability to view all activity within your cloud network. This means you can keep track of what’s being used to ensure that nothing in your system isn’t allocated costs you money.

This will allow you to fully track your cloud consumption and ensure that you can take further steps, such as optimisation.

Governance

Cloud governance allows you to design and implement a framework of policies to manage and guide your cloud systems.  

Cost management is one of the five primary disciplines of good governance. So, by having a high level of governance, you can ensure that your cloud implementation works for you without costing you astronomically.

Optimisation

Optimisation is the key to ensuring that your cloud implementation is cost-effective. The process ensures that your cloud implementation is efficient and effective. Without optimising your cloud systems, you’ll inevitably spend more than if your systems were correctly optimised.

Specifically, optimization balances cloud costs and other resources with performance, meaning that you always get the best bang for your buck.

There are a few different ways you can optimise your cloud system —

·        Budgeting: Budgeting will allow you first to ensure you’ve got a set amount you can spend and nothing more. This means that the cloud will never eat into other expenditures.

·        Track resources: Using the visibility mentioned earlier, you can easily track your resource usage to tweak your implementation.

·        Right-size: Right-sizing is when you modify your system allocation to be the most efficient size, meaning you can always ensure you’re never overspending on performance or other capabilities.

Simplifying Cloud Cost Optimisation with SCOUT

Optimising cloud environments for security, cost,and governance is time-consuming and expensive. However, tools like SCOUT can simplify this process. SCOUT is an AI-powered platform specifically designed to help organisations optimise cost, security, and resource management within Azure subscriptions and consumption.

Where other cost optimisation tools, such as Microsoft CostManagement, allow surface-level monitoring and optimisation, SCOUT takes it to the next level with in-depth governance, cost management, admin logs, tagging, and cost allocation.

SCOUT is a game-changer for organisations looking to manage rising cloud costs without jeopardising security or governance.

NetUtils - How We Can Help?

The cloud is an important consideration for any organisation looking to be successful. But with the rising costs associated with cloud computing, it’s important to ensure that you’re up to date with the information you’ll need to ensure your cloud journey is a success.

If you are looking to review your current cloud environment and find opportunities to optimise cost, security, or governance, contact us today to see how we can help. Book a Free SCOUT Health Check with us.

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