What CTOs or CIOs Won’t Tell You About Cloud Cost Optimization

Part 1

Trying to run the IT infrastructure on cloud and cloud cost optimization at the same time seems like the “chicken and egg” problem for every digital enterprise or organization. Many CTOs and CIOs cannot clearly define what is driving what or address the origins of cloud adoption; is it the cost driving the cloud strategy, or the entire cloud strategy is centered around cost?

Whatever be the scenario, the key factor driving cloud adoption is cost optimization (also highlighted by Gartner).

Cloud has undoubtedly made the IT operations and application deployments easier than they used to be. Still, if you look closely, extra costs, bill surprises, and spending on unused resources creep up month on month, adding up to your budgets.

Do you know that according to IDC’s Worldwide Whole Cloud Forecast, 2020–2024,

“By the end of 2021, based on lessons learned in the pandemic, most enterprises will put a mechanism in place to accelerate their shift to cloud-centric digital infrastructure and application services twice as fast as before the pandemic. Spending on cloud services, the hardware and software components underpinning cloud services, and the professional and managed services opportunities around cloud services will surpass $1 trillion in 2024.”

In this Part I of the Cloud Cost Optimization series, we will discuss some of the most obvious cost optimization strategies for Azure that tend to go unnoticed as CIOs and CTOs are more focused on the “build vs. buy” curriculum.

❖ Regular Audits of Cloud Usage and Bills

Cloud invoices are not self-explanatory, nor are they straightforward (be it Azure or AWS). Your monthly cloud bills that contain a number of pages and several line items, including usage charges raised against various services, VM instance types, regions where workloads are deployed, and so on — all might get confusing and difficult to decode as they keep piling up.

To keep your Azure expenses within the defined budget limits, it is important to review daily or weekly consumption of resources and perform regular audits of cloud invoices. The analysis will help you find sudden cost spikes in your bills, identify billable VMs or resources that you don’t need anymore, and set usage or purchase limits on the cloud resources required for running your IT infrastructure.

Also, make sure that not all team members across your organization are authorized to handle cost-incurring operations, such as service subscriptions, VM purchase approvals, data transfers, storage options, etc.

Pro-Tip: Consolidated billing not only makes it relatively simple to understand the resource utilization and costs incurred but also allows you to avail volume discount.

❖ Fine-tuning of Resources to Keep Cloud Costs in Check

Enforcing policies to restrict the deployment of specific resource types is an effective way of keeping cloud expenses under control. You can assign Azure’s built-in policies to deny the resource types you don’t want to use and allow only the resource types that are required.

For example, if blockchain or IoT isn’t your business domain and you want to restrict your teams from deploying or configuring such resources in the cloud environment, using the policy — “Not allowed resource types” — will help you control their usage, and therefore the unwanted costs.

Not just that, you can also configure policies to limit the deployment of storage account SKUs and VM size SKUs (Stock-keeping-Unit: a purchasable parameter specified under a product) for better cost optimization.

❖ Understanding Cloud Storage Costs and Optimization Opportunities

While deploying applications and workloads on Azure, storage is an essential part of it, which also means it accounts for a significant portion of your invoices and bills. The volume of data keeps on increasing over time. So does the size of your storage containers, especially when you or team members do not perform routine cleaning of redundant or unnecessary data. This directly contributes to your cloud spending and usually goes unnoticed as the storage costs add up in small fractions every day until you realize you are overpaying.

Azure Blob Storage offers you three different access tiers — Hot, Cool, and Archive with decreasing costs per gigabyte a month, i.e., the data storage costs reduce (per GB) as the tier gets cooler. There are also data redundancy options to choose from; the lower the data’s redundancy, the lower the storage cost.

Moving the data that is less frequently accessed to a less expensive tier with lower redundancy is a cost-efficient method of storing blob object data. Besides, consider deleting the storage accounts or blobs (within the accounts) that you no more need.

❖ Automation is the Key: Scheduling and Anomaly Detection

Putting a pause on your cloud spending is nothing but a cheap and reactive trick of saving money, not to mention it is a short-term scheme until your organization starts to grow.

So what should IT leaders and administrators do differently?

Leveraging an efficient cloud cost optimization platform that enables you with the power of automation has become the new imperative. Cloud cost optimization and management platforms like CloudMonitor empower you to run and manage your cloud estate in the most cost-effective manner.

Anomaly Detection: CloudMonitor continuously monitors and automatically detects cost anomalies across your cloud environment. Any sudden spikes or unusual patterns in your Azure spending, and CloudMonitor immediately alerts you to review the resource usage or incurred cost to avoid the “Bill-Shock.”

Auto-Scheduling: You don’t need to pay for VMs that are running idle during weekends or holidays. With CloudMonitor in place, you can create and automate custom schedules for shutting down and restarting VMs to match your work schedule.

In Conclusion:

With cloud fueling the transformation of enterprise IT at an accelerated rate, CTOs and CIOs need to plan their cloud budgets wisely. Continued resource wastage will have ramifications on the business. The need for eliminating overspending on cloud services and sustaining cost savings is now more than ever.

However, optimizing costs while trying to make your infrastructure more cloud-centric is not as easy as it sounds. There is more to explore and delve deeper into the tale of cloud cost optimization. We will soon release part II of the series, illustrating the most common set of cost optimization practices that CTOs or CIOs often miss or forget to mention, such as VM rightsizing, reservation options, and more.

Rodney Joyce

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