5 Steps for Effective Cloud Capacity Planning to Avoid Extra Spending

Day by day, enterprises and businesses are increasingly shifting their operations to the cloud. This transition involves not only relocating data but also migrating computing and processing capabilities. While the cloud offers the advantage of accessing precisely the resources needed at any given moment and only paying for what is used, a significant challenge persists. The prevalent issue of over-provisioning and incurring unnecessary costs due to unused cloud server capacity is impacting businesses today. It is crucial to implement Right Size Cloud Capacity to reduce cloud expenses and optimize cloud utilization.

Maintaining the appropriate Right Size Cloud Capacity is essential and depends on the specific application hosted on the server. Application loads and load distributions may vary over time. Cloud instances must be capable of handling application traffic without causing downtime. When dealing with spikes or increases in traffic, cloud architects have two primary options: vertical scaling and horizontal scaling. Vertical scaling may necessitate instance reboots and potentially lead to service interruptions, leaving users dissatisfied. In contrast, horizontal scaling ensures high availability with no downtime. However, scaling alone does not guarantee the ideal cloud size.

For example, consider an application that requires 4 GB of RAM. If you have an instance with 2 cores and 4 GB of RAM and another with 4 cores and 8 GB of RAM, you would need to host the application on the latter instance to ensure 5 GB of available RAM, even if the application does not utilize all the cores. This results in resource and cost wastage. The choice of a cloud provider with the desired capacity instance also plays a crucial role in maintaining the optimal cloud instance size

Right Size Cloud Capacity can be obtained by following the below steps:

Using a Cloud Billing Tool:?

A reliable cloud billing tool plays a pivotal role in making informed decisions about the selection of the appropriate cloud instance. The choice of instance type is closely aligned with the nature of the applications that will be hosted on it. It is imperative to opt for an optimized EC2 instance type that not only minimizes costs but also allocates resources efficiently, thereby avoiding wastage. The selected instance should strike a balance, avoiding both over-provisioning and under-provisioning.

A proficient cloud billing tool assists in the selection of the right instance type, considering both its size and cost. For instance, the Cyfuture Cloud Cost calculator provides valuable insights by offering annual cost estimates based on the chosen instance type.

Using short-term instances for short-term needs:

Meeting the resource demands of a brief project can be efficiently accomplished by utilizing either bidding instances or by inquiring with the cloud provider about available spare instances. In situations where an instance is only needed for a short-term requirement, there is no justification for reserving resources for an extended duration. Prolonged provisioning of resources may meet the immediate computational needs but results in resource wastage as the instance remains inactive. Therefore, for short-term requirements, it is unnecessary to provision instances well in advance.

It is advisable to consult the cloud provider for the availability of spare instances. For instance, Amazon Web Services offers a solution called spot instances. These spot instances can be launched at a cost significantly below that of regular instances, making them an excellent fit for short-term needs. This option empowers users to access resources for a shorter timeframe at a discounted rate.

Cloud spending doesn’t need to be a guessing game:

Efficient management of cloud expenditure is crucial, and it should not rely on guesswork. Before consolidating each workload, a thorough evaluation is essential to ensure that it aligns with specific criteria such as CPU, storage, network, bandwidth, I/O, and memory requirements. These criteria should then be integrated to select the most suitable virtualized server.

It is imperative to choose instances that possess the necessary size, capacity, storage, and network capabilities, with rigorous testing and optimization as part of the selection process. The workloads must undergo testing, and the precise capacity threshold for hosting the application should be accurately calculated.

Ensuring cloud resiliency while migrating applications

Prior to transitioning your applications to the cloud, it is essential to verify that your data center can uphold the cloud's resilience and high availability. This precaution is taken to prevent incurring extra expenses related to application redesign and to ensure the proper maintenance of the ideal cloud capacity.

Conducting a cost assessment and gaining a comprehensive understanding of the Total Cost of Ownership (TCO) is a crucial step. This process is undertaken to sustain the correct size of resources and streamline future cloud expenditures.

Right Size Workload ensures Right Size Cloud Capacity:

To ensure the appropriate sizing of workloads, it is imperative to adhere to performance monitoring and capacity planning strategies. Before establishing the cloud environment, it is essential to gather comprehensive data, encompassing not only CPU and memory metrics but also I/O and storage requirements. Additionally, it is vital to document the server configurations.

Capacity planning involves the estimation of server workloads and application performance objectives, as well as the careful selection of the correct instance type. This selection should be made with precision to prevent resource wastage and manage cloud costs effectively.

In order to guarantee the optimal workload sizing, rigorous testing, including load testing and various other assessments, must be conducted on the application. The application should be run in the designated server environment to determine the right size of the cloud instance that seamlessly accommodates scalability without disruption.

Choosing the right size cloud instance

A prevalent issue today is the underutilization of cloud servers, where a significant portion of their capacity remains idle. For instance, in an autoscaling environment with 5 desired servers, if each server is only at 30% capacity, then a substantial 70% of the server's potential is wasted. This results in resource inefficiency, even when new instances are added, as they too remain idle, leading to resource wastage. The solution lies in preemptive testing of applications and using servers with roughly 10% idle capacity.

Many organizations today rely on basic peak demand forecasting to determine their cloud computing capacity requirements. Selecting the right-sized cloud instance is crucial to avoid encountering the same problem faced by underutilized servers in traditional data centers.

In today's environment, ensuring the Right Size Cloud Capacity is imperative to prevent unnecessary spending. While many organizations are transitioning to the cloud to benefit from its cost advantages, they often overlook the potential for further cost optimization. Addressing server underutilization is vital to control unnecessary expenses. In our organization, we employ the concept of reserved instances (pre-booking instances to reduce future costs) and spot instances (utilizing spare cloud instances at a lower cost for applications that can tolerate minimal downtime) to effectively manage our cloud resources.