3 Tips for Optimizing Your Cloud Costs

Companies around the world utilize cloud architecture for application management. But with the cloud’s rise in popularity, unfortunately, we’re seeing a global increase in the costs of using these services. For example, Google Cloud data costs have increased by as much as 50% for some services.

It’s well known that the global supply chain has been bogged down by equipment shortages, recruitment difficulties, and in some cases, overly strict government regulations. As we move farther away from (some of) these issues, companies are still seeing an average 30% increase in tech vendor pricing across the board. What’s more, one survey of cloud decision makers found that organizations wasted 32% of their cloud spend in 2022, and their public cloud spend was over budget by 13% compared to last year.

Knowing how to cut down cloud costs can be a critical boost to your company’s bottom line while dealing with global inflation. Here are three essential steps you can take to optimize your cloud costs and help get the most out of your investment:

1. Shop Around for Tools That Help Optimize Costs

There are many tools available now that can help you optimize your costs efficiently, but my recommendation is to start with a cloud management platform. A CMP provides a central point of control for your cloud environment. It can help you track usage, set budgets, and allocate resources.

Another tool that can help with cost management is an application performance monitoring system. An APM system can help you identify and troubleshoot issues that might be causing higher-than-expected costs. These can be valuable tools for keeping your cloud and application costs under control.

The list doesn’t end there. There are a number of other tools to support your cost management efforts, including those for configuration management, infrastructure as code, and container orchestration. Each of these systems can provide benefits that will help you save money on your cloud investment.

2. Do Not Run VM in the Cloud

There are many potential financial and security risks associated with running a virtual machine in the cloud, which is why it’s not recommended. Perhaps the most significant risk is that your VM could be compromised by a malicious actor who gains access to your cloud environment. Your data and information will be stored on someone else’s servers, which could be hacked or stolen. Once someone nefarious has access to your VM, they could use it to launch attacks against other parts of your network or against other organizations. Talk about an expensive mistake.

Another concern is not being able to adequately protect your VM from malware or other threats. If your VM were infected with malware, it could be used to spread that malware to other VMs in your cloud environment or to systems outside of the cloud. If your cloud provider were to have an outage due to a malicious attack, your VM would be inaccessible.

Running a VM in the cloud is an expensive proposition that does nothing to help reduce the costs of your cloud architecture. You’ll need to pay for the privilege of using someone else’s servers, and you’ll also need to pay for bandwidth. If you’re not carefully monitoring your usage, you could end up spending more than you need to on cloud resources.

Rehosting on-premises VMs to the cloud is the easiest way to get onto the cloud bandwagon. However, consider more advanced and cost-effective alternatives such as running your applications in containers, adopting platform as a service (or PaaS) offerings from the cloud provider, and/or adopting software as a service (or SaaS) offerings from your third-party software vendors.

3. Designate FinOps Governance

Designating a FinOps governance for your organization can be incredibly effective when optimizing your cloud computing system. FinOps is a cross-functional cloud financial discipline that encompasses many departments, including engineering, finance, and operations, to make data-driven spending decisions.

FinOps takes advantage of the agility and flexibility of the cloud to help organizations optimize their finances and improve their bottom lines. Because it automates tasks and processes, FinOps can free up time for finance professionals to focus on more strategic tasks. And by leveraging data and analytics, FinOps can provide insights that can help organizations make better decisions about their finances.

The core pillar of FinOps is understanding today’s cloud costs—from every perspective. What this means is that people across the company are accepting responsibility for their usage and acting accordingly to support a central group that reviews best practices in cloud utilization. Together, FinOps enables faster product delivery, more financial control, and increased predictability.

Using these three tips to optimize your cloud costs will help ensure your company is able to maintain its budget during these uncertain times. Supply chain hiccups, learning new tech, and rising cloud costs are all notable challenges, but you can face them with the right plan and effective tools.

You don’t have to figure it out alone: Read more to learn how CTG can help.

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