Cloud computing is evolving and continuously improving to provide the best possible solutions for any company to manage its infrastructure. Many companies are adopting the DevOps model to achieve a rapid pace of innovation, enabling swift delivery, bolstered security, enhanced reliability, and scalable operations. This approach allows them to stay highly competitive.

Cloud cost optimization as the biggest challenge

Microsoft Azure presents a powerful set of solutions that makes deployment easy, but this comes with a cost. Cloud cost optimization is probably the biggest obstacle that many enterprises are facing in the age of cloud computing. In Flexera’s State of the Cloud Report 2023, we can see that the numbers back this up: 82% of enterprises and 80% of SMBs consider managing cloud spend to be the top cloud challenge. According to Gartner, in 2020 around $17.6 billion of cloud costs were wasted largely due to oversized cloud resources. This is why cloud optimization is so important for any enterprise; to scale its profitability, it must avoid these unwanted costs.

Read on: Migration To Azure: Benefits, Specific Migration Plan & A Free Gift

How can you optimize your cloud costs?

Optimizing cloud costs is essential for businesses and individuals to get the most value from their cloud infrastructure and services. Here are some strategies to help you optimize your cloud costs:

1. Right-sizing resources: Analyze your usage patterns and select the appropriate instance types or resource configurations for your workloads. Avoid overprovisioning resources, as it can lead to unnecessary costs.
2. Utilization monitoring: Continuously monitor your cloud resource utilization and identify underutilized or idle resources. Shut down or scale down instances during periods of low demand to save costs.
3. Reserved Instances (RIs) and savings plans: Take advantage of cloud providers' cost-saving options, such as RIs and savings plans. These allow you to commit to using specific resources for a set period, offering significant discounts over pay-as-you-go pricing.
4. Spot Instances (AWS) or Preemptible VMs (GCP): For non-critical workloads that can tolerate interruptions, consider using spot instances or preemptible VMs. These are available at significantly lower prices but can be reclaimed by the cloud provider when demand increases.
5. Use serverless and managed services: Serverless computing and managed services can be more cost-effective since you only pay for the actual usage rather than provisioning and managing dedicated resources.
6. Optimize storage costs: Utilize data lifecycle management policies to move data to the appropriate storage tiers based on access patterns. Delete or archive data that is no longer needed.
7. Load balancing and auto-scaling: Implement load balancing and auto-scaling mechanisms to ensure your application scales based on demand. This helps avoid overprovisioning and reduces costs during periods of low traffic.
8. Cost tagging and monitoring: Use cloud provider tools to tag resources based on projects, teams, or applications. This will help you monitor and allocate costs accurately and identify areas where optimization is needed.
9. Geographical optimization: Choose the most cost-effective regions and availability zones for your workloads while considering factors like data residency and latency requirements.
10. Consider multi-cloud or hybrid strategies: Depending on your workload requirements, consider leveraging multiple cloud providers or a hybrid cloud approach. This can enable you to take advantage of competitive pricing and avoid vendor lock-in.
11. Educate your team: Promote cost-awareness within your organization. Educate your team about cloud cost optimization strategies and foster a culture of cost-consciousness.
12. Regular review and adaptation: Cloud environments and workloads evolve over time. Regularly review your cloud architecture, cost allocation, and utilization patterns. Adapt your strategies as needed to maintain cost optimization.

By implementing these cost optimization strategies, you can ensure that your cloud expenses are well-managed and aligned with your actual requirements, leading to more efficient and cost-effective operations.

Why can cloud computing be so expensive?

The cost of cloud computing can vary depending on several factors, including the cloud service provider, specific services used, usage patterns, and geographical region. However, some common components tend to contribute significantly to cloud computing costs:

1. Compute instances: Virtual machines or compute instances are a fundamental resource in cloud computing. They are used to run applications, databases, and various workloads. The cost of compute instances depends on factors such as the instance type, operating system, and the number of hours they run.
2. Storage: Cloud providers offer various types of storage, including object storage, block storage, and file storage. The amount of data stored and the storage class (e.g., standard, infrequent access, cold storage) influence the cost.
3. Data transfer: The cost of data transfer refers to moving data in and out of the cloud provider's network. This includes both data ingress (incoming data) and data egress (outgoing data). Large amounts of data transfer can add up to significant costs.
4. Networking: Networking costs can include costs associated with load balancing, data transfer between services or regions, and network data transfer out to the internet.
5. Database services: Managed database services like Amazon RDS, Azure SQL Database, or Google Cloud SQL may incur costs based on the instance size, storage, and I/O operations.
6. Content Delivery Network (CDN): If you use a CDN to distribute content globally, there may be additional costs based on the data transfer and cache hits.
7. Reserved Instances and savings plans: While these options can help save costs, committing to reserved instances or savings plans can still represent a significant upfront investment.
8. Support and SLAs: Opting for premium support or higher service level agreements (SLAs) can add to the overall cloud costs.
9. Machine learning and AI services: Utilizing machine learning models or artificial intelligence services can involve costs based on the complexity and volume of data processed.
10. Additional services: Many cloud providers offer a wide range of specialized services, such as analytics, Internet of Things (IoT) services, security tools, etc. Using these services can contribute to the overall cost.

It's important to note that cloud costs can be highly dynamic and may fluctuate based on usage patterns, demand, and service pricing changes made by cloud providers. To optimize cloud costs effectively, continuous monitoring, cost allocation, and careful resource management are essential.

Read on: The Real Cost Of Migrating Your Application Stack To The Cloud

Optimize your cloud costs with Rare Crew

So how can you lower the skyrocketing cost of cloud computing, if you don’t have time to follow the list we provided? To optimize cloud costs, companies can use our services.

The process starts with a cost assessment where we assess the current cloud infrastructure in place and perform a cost audit to identify the potential financial leakages, while also evaluating the performance of the data and its security. Our solution also measures the usage patterns of the data at a certain period and the data usage frequency over multiple instances in a week. We can predict a more efficient use of the cloud resources to run and scale the potential customer’s app seamlessly.

With cloud cost optimization, you can

1. Reduce costs by shutting down any unused resources,
2. Reconfigure any underused resources,
3. Properly manage the reserve instances,
4. Take full advantage of the Azure Hybrid mode,
5. Configure scaling,
6. And ultimately, choose the right computing cost according to your needs.

Our solution will continuously right size the resources and match the usage to the storage class. What’s more, automation of the entire process reduces overheads and provides a smooth operation.

After successful installation and activation, you will see the benefits right away. Our solution works in two tiers and can save up to 65% of your cloud computing cost just by downsizing any unused resources. It provides you with real-time monitoring of resources and its allocation, and also indicates the traffic flow and the cost dashboard so you can monitor your costs. In other words, as our customer, you can get the best possible ROI on your cloud investment.

Watch our Cloud Cost Optimization video or click here to optimize your Azure infrastructure costs with our solution.