- Optimising cloud costs ensures that organisations only pay for the resources they actually use, reducing overall expenditure and improving financial efficiency.
- Effective cost optimisation allows organisations to better manage and forecast their cloud spending, preventing budget overruns and ensuring financial predictability.
Cloud cost optimisation is the strategic management of cloud resources to minimise expenses while maximising value and efficiency. Key strategies include leveraging pricing models like Reserved Instances and Spot Instances, automating cost management processes, and effectively tagging resources for accurate cost allocation. In this blog, you can understand what is cloud cost optimisation and the 5 key aspects of cloud cost optimisation.
What is cloud cost optimisation
Cloud cost optimisation refers to the process of managing and reducing the overall expenditure associated with cloud computing services while maximising the value derived from those services. Moving data and applications from traditional on-premises data centers to cloud infrastructure offers companies the potential for significant cost savings through accelerating innovation, keeping a competitive edge and better interacting with customers and employees.
What’s more, IT infrastructure becomes a pay-as-you-go operational expense with most public cloud providers. You can scale your cloud resources up or down to meet demand, and costs will follow. As organisations increasingly adopt cloud infrastructure and services, optimising costs becomes essential to control spending, improve financial efficiency, and ensure resources are used effectively.
Also read: What is Cloud Operations?
Also read: 4 types of cloud migration
5 key aspects of cloud cost optimisation
1. Reserved instances and savings plans: Leveraging pricing models offered by cloud providers, such as reserved instances (RIs) or savings plans, provide significant discounts for committing to long-term usage. These plans offer cost predictability and can result in substantial savings compared to on-demand pricing.
2. Automated cost management: Implementing automation tools and scripts to monitor, analyse, and manage cloud costs in real-time. Automation helps in identifying cost trends, optimising resource utilisation, and enforcing cost control measures based on predefined policies.
3. Tagging and cost allocation: Tagging resources with metadata attributes (e.g., project, department, environment) to allocate costs accurately across different teams or business units. This visibility enables organisations to track spending, identify cost centers, and optimise resource allocation accordingly.
4. Monitoring and reporting: Implementing robust monitoring and reporting mechanisms to track cloud spending, analyse cost patterns, and generate insights for continuous optimisation efforts. Regular review of reports helps in identifying anomalies, optimising usage patterns, and making informed cost-saving decisions.
5. Cloud native services: Leveraging managed services and serverless computing options provided by cloud providers to offload operational tasks, reduce maintenance overhead, and optimise costs associated with infrastructure management.
Cloud cost optimisation is an ongoing process that requires proactive management, continuous monitoring, and collaboration across teams to achieve optimal results. By implementing strategies tailored to their specific cloud usage patterns and business goals, organisations can effectively manage costs, improve financial transparency, and maximise the return on their cloud investments.
