Let’s talk about cloud waste – it’s quite the money-muncher, costing companies an arm and a leg every year. In 2022, firms shelled out an incredible $490 billion on the cloud. Even more astounding, around 30% of that cash, a mind-boggling $147 billion, was utterly wasted. Yep, that’s the highest waste we’ve ever seen in a year!
Fast forward to 2023, and companies are set to throw nearly $600 billion at the cloud. It makes you wonder. Are you inadvertently flushing money down the drain while trying to save?
Well, breathe a sigh of relief because cloud waste is usually something you can sidestep. But what sparks this wastage, and how can you reduce it this year and beyond? Here’s the lowdown with seven practical, straightforward tips to help you trim the fat off your cloud spending and steer clear of overspending:
Embrace gradual migration
It’s standard for companies to move their infrastructure, data, and workflows to the cloud in one fell swoop. While it may seem efficient, this rapid shift can easily overwhelm your engineering team. Giving your engineers ample time and freedom to adapt your system to the cloud environment is crucial, even if they’ve been trained for the transition. This period allows you to figure out how the new design meshes with your existing workflows, spot and rectify inefficiencies, and monitor the process before adding more workloads to the cloud. Without this careful approach, your team might inadvertently stick to the same inefficient habits from your company’s previous setup, stopping you from reaping the full savings benefits of cloud migration.
Understand your cloud spend
So here’s a thing that might shock you – many businesses are clueless about the nitty-gritty of their cloud spending and wastage. Just picture this – you could unknowingly let 35% of your cloud budget slip through your fingers every week. Right? But we’ve got a solution – doing an in-depth cloud cost analysis. If you’re using Amazon Web Services (AWS), they’ve got some free tools like AWS Cost Explorer, Cloudtrail, and AWS Cost and Usage Report that give you a big-picture view of your spending. But you need to dive deeper into the numbers, like figuring out the cost of a specific software testing project over time. Well, those tools won’t cut it.
It would be best if you leveraged robust cost analytics, OptScale, that allows you to pinpoint optimal optimization strategies for AWS cloud workloads. OptScale empowers companies to uncover unassigned and abandoned resources, minimize squandered expenses tied to underutilization or idle assets, and construct an efficient IT infrastructure. By generating AWS availability zone scores, suggesting resource relocation, and facilitating workload mobility, OptScale maximizes cost efficiency in the cloud.
Establish limits to avoid unpleasant surprises
Navigating the cloud can sometimes feel like a rollercoaster ride with its dynamic ups and downs. Take Amazon Elastic Computing Cloud (EC2) instances, for instance. These hard workers won’t clock out after their tasks are done, and it’s up to you to tell them when it’s break time. Here’s the catch – AWS bills you for every second these instances are on, whether busy or idle. Moreover, they can scale up massively to manage a flood of server requests from a viral social media post. The result? An unexpectedly hefty AWS bill. But don’t worry. You can reign this in. Log into your Amazon EC2 console, check your current service limits, and set boundaries. By defining minimum, desired, and maximum capacity limits for your Auto Scaling Groups, you can prevent costs from spinning out of control.
Opt for automated cloud cost management
When handling the complex and ever-changing bills of the cloud, relying on spreadsheets can be cumbersome and inefficient. Take the example of EC2 Auto Scaling, where your setup is designed to adapt to increased traffic and maintain optimal website performance. However, unexpected situations can catch you off guard, and by the time you realize what’s happening, it may be too late to address cloud waste. That’s why implementing an automated system is a more innovative approach. By leveraging top-notch cloud cost management tools, you can proactively detect, track, and report any abnormal cloud activities, ensuring that cost anomalies are identified and addressed promptly. These tools can alert the relevant teams within your organization, empowering them to take swift action and keep your cloud budget in check without any unpleasant surprises.
Adopt best practices for cloud cost optimization
Let’s dive into the world of reducing your cloud spending. If you’re using AWS, there are clever ways to minimize cloud waste. Here’s what you can do: First, get a clear view of your cloud costs and usage by enabling continuous cost reporting. Monitor your expenses and catch any anomalies by following best practices for monitoring cloud costs. Identify the areas where your organization is wasting the most in the cloud and take action to optimize them. Automate policies to shut down idle instances and workloads when they’re not needed, and ensure you’re using the right size of AWS resources to match your computing needs. Don’t use compute instances when you don’t need them, and explore AWS Savings Plans like Reserved Instances that align with your usage patterns to save some bucks. Look for hidden cost-saving opportunities within AWS and consider using EC2 Spot Instances instead of more expensive On-Demand Instances whenever possible. Lastly, analyze your cloud bill focusing on specific business activities to pinpoint areas where unnecessary expenses can be trimmed. Remember, it’s not just about reducing your cloud bill but also optimizing costs while keeping performance, innovation, and growth in mind. By implementing these best practices, you can strike the right balance and make the most out of your cloud resources.
Swap tagging with code-driven allocation
Let’s talk about tagging and managing cloud costs. While tagging can be helpful, developing a perfect tagging strategy at scale can be a real challenge. But don’t worry; there’s a solution that can provide accurate cost insights without relying solely on tags. Enter Hystax. This fantastic tool goes beyond traditional tagging methods and collects data from various sources like infrastructure, application performance, and Kubernetes. It then analyzes and enriches this data to provide valuable cost information to your teams in a way that they can easily understand. With this actionable information at their fingertips, your teams can confidently make cost-related decisions and keep your budget under control without getting lost in the complexities of tagging. It’s a game-changer for managing cloud costs effectively.
Cultivate a cost-savvy corporate culture
To ensure effective cloud financial management, treating cost as a top-tier metric is crucial, on par with uptime and Mean Time To Recover (MTTR). Proactively encourage your teams to measure costs and understand their impact on the organization’s bottom line. This can be achieved by leveraging a reputable cloud financial management solution that provides detailed unit cost analysis. By breaking down costs into meaningful units, such as cost per customer, cost per product feature, and cost per DevOps team, you empower your engineering teams to develop cost-effective software solutions. Simultaneously, this analysis enables your finance teams to set competitive prices while maintaining strong gross margins. By fostering collaboration and utilizing financial insights, you can optimize your cloud expenses without sacrificing innovation, ultimately driving economic success for your organization.
Reduce cloud spend without sacrificing innovation
Reduce your cloud expenses without compromising innovation using OptScale from Hystax. Their FinOps and MLOps open source platform enables you to identify the drivers behind your cloud costs, whether it’s specific areas, teams, or features. Break down costs based on the dimensions that matter to your business, such as cost per customer, unit, or quality. Stay on your budget with timely cost-saving recommendations and alerts for any anomalies. Gain better visibility into your costs and make informed decisions on where to cut expenses while maintaining optimal cloud performance and fostering engineering innovation. Discover how our company Hystax can help you reduce cloud costs efficiently while driving your business forward.
💡 You might be also interested in our article ‘FinOps team: roles and responsibilities.’
Spending thousands of dollars on IT infrastructure, businesses are eager to gain full transparency of spending, achieve satisfactory unit economics metrics and build a strong FinOps team of highly involved and motivated employees. Please, find more details here → https://hystax.com/finops-team-roles-and-responsibilities.
✔️ OptScale, a FinOps & MLOps open source platform, which helps companies optimize cloud costs and bring more cloud usage transparency, is fully available under Apache 2.0 on GitHub → https://github.com/hystax/optscale.
