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Cloud cost management is one of the top priorities of tech companies today.


There’s no doubt that cloud computing has enabled the enormous growth and success of the tech industry. Without its transformative flexibility, scalability, and wide array of services, businesses would not be able to create technology nearly as fast or as high quality as we see in today’s day and age.

But there is a downside to all this — and that’s the cloud bill.

There’s no denying the cloud is a complicated beast — and as a result calculating, managing, and adjusting infrastructure for cost efficiency can be a tremendous burden.

Luckily, we’re providing tips and tricks to get your cloud cost management strategy started.

Analyze your usage and eliminate waste

A surprising number of businesses have no idea what they are using in the cloud. This means they potentially have idle or unused resources that they are paying for, but not using (otherwise known as cloud waste). This usually occurs when you have instances purchased on-demand for non-production purposes such as QA, development, staging, testing, and others.

It’s important for all engineers working in the cloud to know what their applications are using and continuously identify and shut down any resources that are no longer in use. There are many tools native to the cloud that offer visibility into your cloud usage and potential spend. For example, AWS offers Cloudwatch while Azure created Azure Monitor.

Take advantage of cost efficient pricing models

In addition to idle resources, many organizations are not optimizing their savings coverage. For example, AWS offers Spot Instances, Reserved Instances, and Savings Plans that are 70-90% less expensive than their traditional On-Demand Instances. While they come at the cost of flexibility, for many workloads, these pricing models can work just fine if you’re willing to spend some time calculating your future usage. If that’s not your style, you can still take advantage of Reserved Instances with Commitment Manager, which automates the buying and selling of RIs according to your real-time usage.

Make sure your instances are right sized

Not all EC2 Instances are created equal. And if your instances are not optimized for the performance and capacity needs of your current workloads, you may be missing many opportunities to save. So how can you right size your instances? It’s important to analyze and measure your CPU and memory for an extended period of time in order to get a benchmark for their needs. Then, find instances that have more capacity allocated than they actually need or are not being used to their full potential. And finally, pair your workloads with a family type that fits its CPU, memory, and network usage at its peak.

Reduce the temptation to over-provision

We get it–predicting your application needs far in advance is no easy feat. Your cloud usage is incredibly dynamic and can change with each new customer or new feature being released. That’s why you tend to provision more storage and CPU capacity than you’re using to accommodate future scale. But did you know that this can drive up cloud costs unnecessarily? Instead of overprovisioning, try automation. By implementing a tool that automates cloud cloud provisioning as you scale, you’ll eliminate any need to overprovision resources.

Tag your assets

As we’ve mentioned before, it’s important that your engineers are aware of what resources they’re spinning up in the cloud–and tagging is a good way to make it happen. These metadata labels can be attributed to particular applications, teams, individuals, etc. to ensure full ownership and responsibility for managing and maintaining workloads in your cloud environment.

Put a governance/FinOps practice in place

Now that we’re on the subject of responsibility, it’s a good time to talk about long-term solutions like governance and FinOps. Implementing governance and/or FinOps will enable your organization to get organized and proactive about cloud cost management, responsibility, and strategy. And without a strategy in place, your organization may find themselves putting out fires rather than having a formal way of building a cost efficient cloud. If you’re just getting started, check out these tips and best practices for starting your FinOps journey.

Cloud cost management is easier said than done. But if you implement the proper procedures, technologies, and best practices, it can help save your organization millions — maybe even billions. And if that’s not enough — it can make you a crucial asset to your company.