Cloud services feel great on the budget when you’re starting out: a huge boost in capabilities with relatively little investment. However, that ease and simplicity also make it easy to overspend. Unused resources, poor capacity planning, complex pricing, and unchecked cloud growth can turn a useful IT investment into an untenable expense over time.
Cloud cost optimization helps you control spending while preserving the performance and capabilities your business needs.
Why bother? The risks of uncontrolled spending on cloud infrastructure
The danger of uncontrolled cloud spending isn’t a dramatic event that shatters your budget. Instead, spending creeps upward through dozens of small decisions here and there:
- An oversized virtual machine
- An unused storage volume or cloud app
- A development environment that runs continuously after a project ends
- Overpriced services that are never reviewed or replaced
Enterprise cloud environments are especially difficult to manage because multiple teams may provision resources independently. Additionally, if you use multiple cloud providers, billing and usage can become harder to track, creating even more hidden expenses. Without clear ownership and visibility, your cloud bill can grow faster than your business value, containing hundreds or even thousands of line items.
Left unaddressed, these expenses will steadily drain your budget until one day you discover your hidden cloud expenses and total cost of ownership are much higher than you thought. So even if you aren’t feeling the squeeze now, you want to optimize your spending ASAP to stop your losses from snowballing.
10 Cloud cost management strategies for enterprise businesses
The goal of cloud cost optimization isn’t simply to spend less; slashing costs blindly could easily end up costing you more than you save. You want to make sure every dollar supports an appropriate business need while still maintaining performance, security, availability, and compliance. Here are some strategies to help you achieve that balance:
Establish FinOps governance
As mentioned above, you don’t want teams incurring expenses arbitrarily without anyone else knowing, so start by making cloud costs a shared responsibility between IT, finance, engineering, and business leaders.
Your FinOps team should:
- Establish budgets
- Assign ownership
- Define spending policies
- Regularly review cloud performance and costs
Clear governance helps prevent teams from making cloud purchases without considering their long-term financial impact.
Improve cloud cost visibility
Cloud costs must be found before they can be controlled. Fortunately, there are cloud cost management tools available to track your spending by application, department, project, environment, or business unit.
To maximize benefits, your IT team or managed services provider should enforce consistent, automated tagging and naming standards so you can answer basic questions such as who owns a resource, what it does, and why it exists. This will make your budgeting and forecasting more accurate.
Identify and eliminate unused resources
Unused cloud resources are one of the most common sources of waste because they quietly accumulate, steadily and exponentially increasing costs. Development instances, orphaned storage volumes, idle databases, and old snapshots, for example, can continue generating charges long after their original purposes disappear.
Schedule regular reviews and use automated tools to identify resources that have little or no activity. Before deleting anything, confirm that it isn’t needed for compliance, disaster recovery, or another business process.
Rightsize your cloud resources
Overprovisioning occurs when you pay for more computing, memory, or storage capacity than your workload actually needs. The solution to this is “rightsizing,” which involves matching resources to real usage.
Your IT team will need to monitor utilization and performance over time rather than guessing or assuming what resources are required. After careful scrutiny, you’ll likely discover that certain workloads can run on smaller instances without affecting employees or customers.
Use autoscaling and cloud cost optimization tools where appropriate
Your cloud environment doesn’t need to operate at peak capacity around the clock, and you really don’t need to be paying for it. Autoscaling increases your resources when demand rises and decreases them when demand falls.
Your cloud platform may already have autoscaling features built in, but your IT services provider will need to configure them to your needs.
Choose the right pricing model
Review your workloads to determine whether the existing cloud pricing plan is actually the best option. For stable workloads, reserved capacity or savings plans may reduce costs if you commit long-term.
For flexible, interruption-tolerant workloads, such as certain batch processing or testing jobs, spot capacity may provide another cost-saving option. However, since you’re getting a good deal, your workloads are deprioritized and may be interrupted, so be sure that possibility is acceptable to you.
Control data transfer costs
Moving large amounts of data between regions, services, or cloud providers can create significant charges, especially in complex or multicloud environments.
Review how your applications move data and look for unnecessary transfers. Better data architecture, compression, deduplication, and thoughtful placement of workloads can help reduce avoidable network expenses.
Automate cloud cost monitoring
If your environment is enterprise-sized, reviewing your costs manually is likely both ineffective and inefficient. You may want to consider automated monitoring tools that can identify unusual spending patterns, utilization changes, and cost anomalies much faster and more accurately than periodic spreadsheet reviews.
These tools also have useful features such as spending thresholds, which alert your team when costs exceed expected levels.
Modernize inefficient workloads
Older applications designed for on-premises infrastructure may consume cloud resources inefficiently, so simply moving them to the cloud could cost more for weaker performance.
Enlist cloud specialists to review high-cost workloads and determine whether modernization, refactoring, or cloud-native services could improve their efficiency. Upgrading these programs or procuring new IT might be more costly and difficult initially, but you’ll save more over the long run.
Make cost monitoring an ongoing process
Cloud cost optimization should not be a one-and-done cleanup project, and even yearly reviews are not frequent enough to effectively control expenses. Your workloads, business priorities, usage patterns, and cloud pricing options simply change too frequently for a six-month-old cost analysis to be accurate.
Schedule regular FinOps reviews to examine spending, utilization, forecasts, and optimization opportunities. Just don’t get tunnel vision and look only at the bottom line. Track both financial and operational metrics so you don’t sacrifice application performance or reliability in the name of cost savings.
Minimize cloud spending with an expert managed services provider
Implementing or modernizing your cloud cost optimization strategy can be complex and time-consuming, but you don’t have to do it alone. Soteria’s enterprise cloud specialists can help you achieve peak visibility and optimization while assisting with ongoing operational management. You’ll save money and time as our team builds and implements your cloud cost controls so that you can enjoy both an efficient cloud environment and significant savings every year.
Schedule a free consultation with Soteria today to find out how much you could be saving.