Cloud Cost Optimization for Multicloud
Learn how cloud cost optimization can help your organization best utilize your cloud spend.
While cloud computing and storage offer more flexible pricing compared to on-premise solutions, they are by no means inexpensive. According to recent reports, 37% of companies said they spend more than $12 million every year on cloud storage, and 80% said their spending exceeds $1.2 million.
The significant expense is one of the main reasons companies invest in cloud monitoring solutions. Without proper tracking and control, the cost of the cloud can become unsustainable for organizations.
Cloud cost optimization encompasses the strategies, techniques, and best practices organizations use to minimize their cloud spending without impacting the required performance. It could be as simple as choosing the vendor best suited for their needs, to building a complex cloud strategy for the organization.
One of the main goals of cloud cost optimization is to identify cloud resources, or those that could be used more efficiently. Once identified, an organization can explore strategies that make the cloud less expensive.
There are many elements to building and maintaining a cloud-based infrastructure.
Besides hosting different applications on the cloud, CloudOps teams must provision enough servers, manage firewalls, control access, and store application and business data. The IT teams must then build these systems to handle the performance expected by the business. They must be able to handle sudden increases in demand without affecting performance.
If cloud resources are not properly configured and optimized, the organization will incur costs even when the demand is low and the assets are unused.
By optimizing cloud costs, organizations stand to save significant resources on their cloud infrastructure.
What is the difference between cloud cost optimization vs. cloud cost management?
Cloud cost optimization and cloud cost management are often used interchangeably, and for understandable reasons. Both are related to controlling and regulating an enterprise’s expenditure on its cloud infrastructure, and the differences are quite subtle.
Cloud cost management is about controlling just the expenses of the cloud. It’s focused on tracking the cost of cloud services to ensure they are not spiraling out of control.
Cloud cost optimization adds business goals and requirements into this mix. It considers cost, but also the cloud resources the organization needs to meet its goals. It ensures that cloud usage is directly aligned with these goals.
Optimizing cloud costs is not just simply cutting down the usage of cloud resources. Businesses can’t just pick the most expensive services and slash their use to optimize the cost. This is where “intelligence” in cloud cost intelligence comes in.
Cloud cost intelligence is used to analyze the cloud expenses of an organization in context with how they are using them. It identifies where money is being spent, how much, what costs may look like in the future, and what the organization is getting in return.
Benefits of cloud cost optimization go beyond simply reducing the overall costs associated with the cloud. Here are a few of them.
Most organizations struggle with visibility into their IT infrastructure. It’s not easy to get a complete picture of the organization’s assets, where they’re located, how they’re used, and the costs associated with them. Most organizations struggle with data siloes, with different departments using their own solutions for managing their processes.
With cloud cost optimization strategies and solutions, enterprises gain a more holistic view of their infrastructure. They can understand the inefficiencies in their processes and how their assets are handled. Executives will have better insights into their systems and be empowered to make data-driven decisions.
While the cloud is essential for an organization’s digital transformation, it can also be a hindrance if not properly managed. Organizations often struggle to adapt to changing market conditions and customer expectations due to the costs associated with change.
But with the improved visibility offered by cloud cost optimization, organizations can quickly tweak their strategies and predict their impact. They’re empowered to adapt, change rapidly, and use systems that work best for them.
During digital transformation, legacy systems are typically either replaced or kept unchanged.
With cloud cost optimization, organizations can explore strategies to move legacy solutions to the cloud. By analyzing the existing cloud systems and the expenses associated with them, businesses can migrate them without incurring huge expenses.
Cloud cost optimization is inherently linked to the business processes of the organization. Here are a few of the common use cases for cloud cost optimization.
Cloud cost optimization strategies offer executives and enterprises opportunities to better manage their cloud.
In many instances, there’s a gap in communication between CFOs and engineers in explaining the cloud expenditure. It’s also difficult to communicate and educate employees on how they can individually reduce their cloud expenses without affecting their productivity or deliverables.
Enterprises can use cloud cost optimization and gain deeper understanding of their real-world usage and associated costs to educate their team members and have the data for better conversations (and decision-making) between executives and engineers. With education comes better use of resources.
Teams often produce the best output when given the responsibility to handle their own cloud budget and resources. But if not managed properly, costs can spiral.
Organizations can use cloud cost optimization strategies to better track their expenditures and connect them to cost centers like applications, teams, and even individuals. With these techniques, businesses can empower teams and employees to do their best work knowing they have visibility and accountability for their usage.
Businesses can use cloud cost optimization tools to get better clarity on billing and pricing for the cloud infrastructure. While most vendors try to provide as much detail as possible regarding cloud spending, it's still not easy to predict costs at the end of a billing cycle.
With the right tools, businesses can review invoices in conjunction with much deeper insight into usage to better understand how they’re spending their cloud budget. They can identify the projects, teams, and applications that are using the most resources and focus on optimizing them.
With unique insight into their cloud infrastructure, executives can better understand how the business uses different resources and better align them with the business goals.
This awareness helps organizations understand the software and automation of their infrastructure requires. Executives gain insight into the gap between solutions the business needs and what they already have.
As cloud technology and adoption matures, businesses and IT experts have developed practices that work best to optimize costs. Here are a few of them.
The cloud costs of any organization will be dynamic. Over the course of a year, the demand for different services will fluctuate and the business will need to change its strategy to adapt.
The best solution to ensuring an optimized approach is to regularly audit cloud costs and ensure the expenses are connected to proportional returns. Regular audits keep enterprises agile and allow them to make changes before it becomes too expensive.
Businesses can significantly optimize their cloud costs without affecting performance or experience by identifying and shutting down unused resources.
In many cases, employees or IT teams may have spun up instances for a quick task and simply forgotten to shut them down. Perhaps instances that were shut down have storage attached to them. Or in some cases, the organization may have acquired an excess of computing resources that are now unused or idle.
Simply by shutting these down, businesses can cut down on their cloud expenses.
In many cases, companies follow the traditional on-prem model of reserving instances even when they were not used. It was necessary (even though expensive) to keep resources underutilized to keep up with sudden demands.
With cloud autoscaling, it's easy for businesses to access computing power as needed. Reserved instances are cost-effective only when they’re fully utilized; for other small jobs, teams can rely on much cheaper spot instances.
Setting up budgets for projects and teams creates transparency among employees. It improves ownership among the teams and prevents budget overspend.
When setting budgets, make sure to talk to team members for their opinions. Set realistic budgets considering the resources they will need. Then make sure your teams stick by them.
Lyve is an object storage platform from Seagate designed for multi-cloud environments. The solution is built from the bottom up to keep enterprises agile and keep costs optimized. Here’s how Lyve can help enterprises effectively manage their cloud costs.
Lyve offers organizations long-term cost predictability with stable pricing. There are no costs for moving between cloud systems or vendors and pricing is completely based on capacity. Lyve makes cloud budgeting simpler for organizations without worrying about increasing prices or unexpected charges. Businesses can create better long-term cloud cost optimization strategies with Lyve.
With Lyve, enterprises won’t be hit with egress fees for shifting from private, public, or hybrid environments. There are no charges for API calls or other hidden charges that can complicate cloud costs for businesses. Billing is completely transparent and highly predictable.
Lyve storage is vertically integrated with other storage products and offers up to 70% lower TCO. With its transparent and stable pricing, businesses won’t face surprises when the bill comes.
Compared to competing solutions, Lyve cloud is more affordable for businesses of all sizes. Organizations can access state-of-the-art cloud services with the performance they need without the costs of other services.
Companies tend to avoid multi-cloud because of the inherent difficulties of managing multiple platforms. But Lyve offers a single platform to manage products and solutions from multiple vendors with ease. Even with changing market conditions and business requirements, organizations can shift between different cloud platforms with Lyve. Lyve is designed to prevent vendor lock in and help organizations keep their cloud platforms agile and mobile.
With Lyve, businesses make the most of a multi-cloud environment.
Seagate’s cloud solutions let organizations make smart and strategic decisions without being held back by their existing infrastructure. We help organizations accelerate their digital transformation and cloud migration journeys.
Seagate cloud helps organizations minimize their cloud costs and still meet their performance requirements. With Seagate, executives are empowered to align their business goals with their cloud strategy.