Four Best Practices for Cloud Cost Optimization

Hello IT professionals!

Season’s Greetings and Happy New Year to all!?

In the ever-evolving digital transformation, many companies are gradually switching to cloud-based services as they help employees access their files faster, enhance benefits, and interpret complex data more efficiently.

Nonetheless, adopting cloud computing can be challenging, as managing cloud spending can be a tedious job, and the resulting costs can be higher than anticipated if not monitored and optimized accordingly.

However, with the help of cloud engineers and financial teams, companies can implement a cloud cost optimization strategy that can help reduce cloud costs by finding a cost-effective way to run the cloud application and maximize business value.

Whether your company is using Google Cloud , Microsoft Azure , IBM Hybrid Cloud and Infrastructure , or any other cloud service platform, it is essential to understand, evaluate, and optimize the amount spent on cloud operations.

In today’s exclusive AI Tech Park newsletter, we will focus on the best four practices that cloud engineers and financial teams can implement to optimize cloud costs.

Why Should You Prioritize Cloud Cost Optimization?

According to a global survey, organizations waste about 32% of their spending on cloud services. However, this issue can be mitigated by cloud optimization, which helps reduce waste and avoid overspending by identifying unused resources and neglected tools. Apart from that, it is also about making sure that your costs are aligned with your business and making intelligent adjustments so that you can control cloud costs without compromising performance.

Let's take a look at the four best practices that will help cloud engineers and financial teams operate the cloud properly without spending too much.

Four Cloud Cost Optimization Best Practices

The best practices listed below can assist you in optimizing the cost of your cloud environment:

1. Right Sizing?

Cloud services come in diverse categories, each catering to specific performance and cost needs. Overprovision of the cloud leads to waste in space as more unnecessary resources are added, which grows your cloud bill, while underprovisioning means few resources, which leads to poor performance and slow response time, affecting users' experiences and waste of digital infrastructure. Thus, cloud engineers can opt for tools like Azure Resource Manager and Amazon CloudWatch to adjust the cloud space according to real-time demand.

2. Clean up the Waste

Unused resources are the hidden cost, so cloud engineers can implement tools like Azure Monitor or AWS CloudTrail to track down resource utilization patterns, further identify idle resources, and clean up those that are not used, which allows for a downsizing of the cost.

3. Reservations and Savings Plans

Any cloud services you choose will require a one- to three-year commitment. In exchange, cloud computing service providers provide cost-saving reservations and savings plans, which aid in cost management. For cloud engineers, this is a crucial strategy to understand which plan is good for each department and can adjust to the company’s budget.

4. Cloud Cost Monitoring

Effective cloud cost management requires continuous monitoring and proactive actions, so cloud engineers can set up a budget alert and detect cost anomalies to identify the unexpected spike in cloud spending. Further, the finance team can analyze the cost report and quickly address this matter by optimizing the cloud space.

The above practices form a solid foundation for cloud cost optimization, but additional tools and technologies like cloud-native architecture, containerization technologies, and serverless computing can also help in enhancing these resources efficiently. Thus, by adopting these practices, cloud engineers and financial teams can transform the cloud from a cost center into a strategic asset for driving innovation and growth and keeping costs under control.

Stay tuned for future AI‐TechPark newsletters, and let's continue the conversation about how you strategize cloud cost optimization in your organization.