Controlling Cloud Costs: 4 Ways to Maximize ROI

If you’ve made managing cloud costs a top priority this year, you’re not alone. According to the IDG 2020 Cloud Computing Study, controlling cloud costs is one of the two top challenges for IT decision-makers.

Fortunately, cost optimization is a pillar of cloud platform providers. While most offer cost management tools, we’ll take a look at the process and tools helping CIOs ensure AWS cloud system optimization for maximum productivity at optimal cost. With the help of these tools and strategies, CIOs can achieve cloud cost optimization.

• Define the Starting Point Start with a baseline that will give you situational awareness. Use a tool like the free AWS Cost Explorer to quickly gain an understanding of cloud spending at both the macro and micro levels. With a defined baseline, you can establish key metrics, such as spend by project or team, and you will be able to meaningfully measure the impact of your optimization efforts over time.
• Review the Architecture Cloud platform providers offer succinct recommendations for cost optimization. For example, AWS recommends enterprises follow its Well-Architected Framework and offers a Well-Architected Review (WAR) to ensure any architecture aligns with its best practice recommendations. A WAR pinpoints architectural changes that can further optimize cloud costs; the bar to entry is low, as WARs are free for the first workload and enterprises can remediate their own findings.
• Right-Size Your Instances Fewer than half of organizations right-size their instances, according to the Flexera 2020 State of the Cloud Report. Yet, it’s a primary way enterprise can control cloud costs. Three leading right-sizing tactics for AWS are Spot Instances, Reserve Instances, and Savings Plans. Spot Instances offer the greatest savings and are less expensive because the cloud provider makes no commitment to provide the instance at a specified time. You simply choose what you’d like to run and for how long, and it runs when capacity becomes available. As a result, Spot Instances are ideal for flexible workloads like batch processing. Reserve Instances and Savings Plans offer similar sized savings, at up to 72%. While the different providers have different ‘flavors’ of these programs, what they have in common is a steep discount in exchange for a single- or multi-year commitment to the platform. Look closely at the programs, however, as some require commitments to specific instance types or a defined amount of compute usage. As workloads change, instance needs will change, too. Therefore, instance right-sizing should be an ongoing exercise.
• Modernize for the Cloud Application modernization, while more resource-intensive upfront, can create outsized savings. Moving from on-premises servers, private cloud, or another “always-on” solution, to cloud-ready allows an application to take full advantage of cloud functionality like elasticity and auto-scaling that extend the greatest possible cost efficiencies. For the right workloads, this approach can offer vast cost efficiencies over a lift-and-shift migration. Cloud-native applications also provide other dividends, like greater process optimization, enhanced productivity, and optimized utilization. Legacy applications, although often based on outdated or even obsolete technology, often remain critical to daily business operations. As such, it’s important to have a practical approach to modernization that sustains the value these apps bring to the business. This approach results in greater agility and room for innovation.

As cloud spending grows, it’s imperative that CIOs can effectively turn the cost control dials to maximize their return on investment and reap the greatest cloud benefits possible. With the strategies outlined here, enterprises can gain even greater control over cloud costs, in turn optimizing your cloud investment.