What is Cloud Cost Optimization?

Cloud cost optimization requires the management of your spending and making reductions when necessary. You should identify where you’re spending too much money before taking steps to optimize this; the same is true when you underutilize resources. 

The point of this is to free up more resources, though you should know where in your business they should be spent. You should also use cloud cost optimization to limit the risk of unexpected bills.

Additional Value:

• Focus Areas: Discount-leveraging (e.g. spot/reserved instances), task automation, and resource rightsizing. 
• Tip: Perform a cost assessment so that you know what your current spending habits are like.

Here are some of the ways that cloud computing does this: 

• Pay-as-You-Go Pricing: Pay for the resources you use. 
• Scalability: Move resources up or down, based on demand, to limit overprovisioning. 
• Reduced Maintenance: Use a cloud provider that handles maintenance or switch to one if you haven’t. 

Additional Value: 

• Efficiency: Cloud-based tools may help with task automation and resource usage optimization, but beware of hidden costs (e.g. data transfer fees).

Aspects to consider in this area are: 

• Complexity: Because cloud environments can make cost-tracking difficult, it’s important to simplify where possible. 
• Visibility: You must gain a full understanding of your usage/spending habits for better visibility. 
• Provisioning: Overestimating resource needs can lead to wasted spending, which is why it’s essential to understand exact resources.

Cloud optimization practices to think about include: 

• Review and adjustment: You should rightsize your storage and instances based on your usage. 
• Discounts: Look for providers that have spot/reserved instances and similar features. 
• Task Automation: Manual errors can occur, but you may limit these with automation tools.

Additional Value:

• Usage Monitoring: Track cloud usage.
• Tip: Set up alerts so that you know when you’re enduring abnormal usage spikes. 

Tools you can look at for this purpose are: 

• Cloud cost management: Use these for analysis, cloud optimization tools, and to track costs. 
• FinOps: Also known as Cloud Financial Management, these tools are used so that tech and finance teams can see cloud spending.

Additional Value:

• Cloud provider tools: Look at your cloud provider to see if they have cost optimization tools; if not, find third-party vendors that do. 
• Tip: Research different tools and compare their pros and cons before making a decision.