Cloud waste happens when companies overspend on computing and storage. Unfortunately, in many cases, the staggering growth in cloud spending goes way beyond the actual growth of the business.
The past few years have seen significant growth in the cloud market. In fact, Gartner has recently published a study that forecasts the worldwide public cloud service spending to grow a staggering 17% and reach $266.4 billion by the end of this year.
Another Gartner’s research reports that an estimated 70% of cloud costs are wasted every year.
And that’s not surprising.
It’s true that the cloud offers a number of great benefits, two of them being its unlimited scalability and lower costs. However, large cloud service providers usually charge based on whatever resources companies have initially ordered, regardless of whether those resources have been used or not. And most often organizations overspend on their orders, which subsequently creates huge cloud waste every year.
So, how do we deal with this? What are some strategies a company could use to potentially lower its cloud spend?
Enter, cloud cost optimization.
Cloud cost optimization is all about reducing your overall cloud spend by eliminating waste, effectively managing your processes, and selecting the right resources.
In this post, we will discuss 4 great strategies a company could use to not only minimize its cloud spend, but also maximize its productivity.
Choose Appropriate Instance Types for Your Business Needs
With an abundance of various types of instances offered by the largest cloud providers such as Google Cloud, AWS, Microsoft Azure, and others, it’s very easy to get confused.
The costs for instances vary greatly, depending on types, vCPU, memory, and other factors. For a better understanding of instance pricing with the three largest cloud providers, check out this post of ours.
It is crucial to choose wisely, as the right choice of instances will prove to be the most cost-effective solution for your business. When selecting, look closely at those instances that suit your application workload best.
Optimize your instance resources regularly. It is a great habit to assess your choice of instances every year or so, to ensure they befit your workload demands.
Look For Unused Resources
Without argument, one of the best ways to deal with cloud waste is to look out for unused resources within your cloud environment.
For instance, if one of your admins forgets to remove storage from the terminated instances, your company’s bills could potentially include charges for those resources that have been once purchased, but not used anymore. To avoid incidents like these, try to make it a habit to regularly identify and remove all unused and unattached resources.
Think About Single Cloud Solutions
Although choosing multi-cloud might save a business from running into risk of vendor lock-in, single-cloud solutions offer some great volume discounts to help cut your costs.
Depending on your company’s needs, consider going single-cloud for possibly better savings.
Make Use of the Reserved Instances
This is another great strategy you might consider using to cut your cloud costs.
Obviously, on-demand pricing is attractive to many companies, especially those that are in the early stages and are looking for a cloud solution that is straightforward and simple. Reserved instances, however, are also a great option, especially if you want to save on your hourly rates. A reserved instance is usually a one to a three-year contract that offers much cheaper hourly rates in exchange for your commitment.
By choosing Reserved Instances, you are able to save up to 70% of the capacity that could be otherwise wasted. This becomes an even more appealing option because of the possibility of a company being able to sell back its Reserved Instances in case if they’re not used anymore. Some cloud providers (e.g. AWS) will even allow you the choice of switching to a different RI with a shorter duration in the marketplace.
Unarguably, the cloud holds boundless potentials. Eliminating your cloud spend and saving money is therefore a possibility.
Focus on establishing an effective cloud cost optimization strategy. Manage your resources wisely, and if you ever find yourself lost along the way, we surely can help!
The Clouve team of experts is your first point of contact when it comes to scaling your IT department. We offer a subscription-based IT model – an affordable and secure solution to all your business needs.
Talk to us today to find out more!