7 Best Practices for Public Cloud Cost Optimization

Whitepaper Incollaborationwith 7BestPracticesforPublicCloudCostOptimization Introduction Whetheracompanyisjuststartingoutwithpubliccloudorhasusedcloudservicesforyearsandreachedahighlevelofmaturity,managingcloudconsumptioncostsandoverallcostoptimizationshouldbeahighpriority.Ifmanagedpoorlyornotatall,cloudcostscanquicklyspiraloutofcontrol—atmanyorganizations,that’spreciselywhathashappened. Formanyenterprises,cloudcostoptimizationisnotafocalpoint.Akeysellingpointofthecloudisexpectedcostsavings,soit’sanaturalassumptionthatcostisnotsomethingbusinessesneedtoworryabout.Inreality,itshouldbetrackedclosely. Whilereasonsforcostoverrunsvary,commoncausesweseeamongclientsaredataegresscharges,unplannedcloudadoption,andmergerandacquisitionactivity.These,amongotherchallenges toachievingeffectivecloudcostoptimization,requireabusinesstoapplybestpracticestorealizemaximumvaluefromcloudserviceinvestments. Cloudcostoptimizationchallenges Differentfactorscomeintoplayforeachuniqueorganizationwhenitcomestooptimizingcloudcosts.Butsomeofthechallengesstandoutasbeingparticularlycommon.Herearefiveofthem. Largenumbersofuserspotentiallyhaveaccesstocloudresources. InthedayswhenorganizationsdeployedprettymucheverythingIT-relatedon-premisesintheirowndatacenters,ITexecutiveshadafairlygoodhandleonwhoboughtandusedwhichresources. Ingeneral,fewerpeoplehadeasyaccesstoresourcessuchasdatacenterserversorstoragesystems.Alimitednumberofuserscouldgainaccess,andCIOshadvisibilityintothis.Allofthismadecostcontainmentmoreattainable. Thepubliccloudisanotherstory.Servicesaremoreeasilyaccessibletomanymoreuserswithinanorganization.Virtuallyeverymajordepartment—marketing,sales,finance,etc.—canstartupcloud-basedserviceswhentheyneedthem,andthosedepartmentshavemanypotentialusersofthoseservices. Clearly,thispresentsapotentialchallengefromacostoptimizationstandpoint. Withcloudresources,thesky’sthelimit. It’snotjustamatterofmoreusershavingaccesstoresources.Thecloud,byitsnature,hasseeminglylimitlesscapacityandpresentsopportunitiesforuserstospendmoreonthoseresources. Oldmodel vs. Newmodel limited+ users limited+ resources total= oversight morecontrol overcosts moreusers + unlimitedresources + minimaloversight = costcontrol challenges Withon-premisesinfrastructures,thetechnologiesinplacehadnaturallimitationsintermsofcapacity.Companieswouldbuyserversofcertainsizes,andcapacitywasallottedasneeded.Ofcourse,capacitycouldalwaysbeaddedwhendemandincreased,butmanagementhadahandleoncosts. Publiccloudservicesdon’thavethesamelimitations,andcompaniesmayexperiencerunawayspendingasdifferentdepartmentspowerupmoreandmoreworkloads. ITdoesnothavethecontrolsit’saccustomedtohavingintermsofsizeorthenumberofresourcespeoplecanconsume. There’smuchfluidityregardingworkloadsandthecloud.TheInsight-commissionedFoundrysurvey,ThePathtoDigitalTransformation:WhereLeadersStandin2023,indicatesthat91%oforganizationscurrentlyrelyonmultiplepubliccloudproviders,with54%ofdata,onaverage,atrespondents'organizationsresidinginpublicorhybridcloudplatforms.1 Yet,evenwithwidespreadcloudadoption,workloadandplatformalignmentranksasatopchallengefororganizationswithamulticloudstrategy,reflectingthecomplexityofassessingandoptimizingworkloadplacements.2 Aboutoneinfiveorganizationssurveyedwithworkloadsinthecloudintendtorepatriatecertainworkloadsto on-premisesmodels.3Thisagainhighlightsthetrial-and-errorsomecompaniesundergotofindtheoptimalcloudpathfortheirneeds. Thework-anywheremodelleveragesthecloud. Theworkforcemodelhasshiftedsignificantlywithinthelastdecade.Firstwewitnessedagradualaccommodationoflimitedcloud-dependentremoteworkpositions,thenarapidpivotin2020toaccommodateaglobalsurgeofremoteworkersinresponsetotheCOVID-19pandemic. Inthewakeoftheglobalpublichealthcrisis,manyorganizationshavefoundnew,long-termmodesofworking,heavilyleveragingthecloud-basedaccess,virtualizationandcollaborationtoenableremoteandhybridpositions. Businesseswantemployeestomaintainorimprovethelevelofproductivitytheyhadwhileworkinginthecorporateoffice,andtodosotheyneedtorelyonthecloudforahostofcommunication,collaboration,securityandmobilityservices.Inaddition,havingahighernumberofworkersusingcloudsolutionsintroducesagreaterriskofshadowITasusersspinupmorecloudresourceswithoutIToversightorapproval,drivingupcostsunpredictably. Carefulconsiderationisneededwhenmovingresourcesbeforerearchitectingthem. Onekeytoachievingcloudandcostoptimizationisrearchitectingapplicationswhenneeded.Becauseorganizationsmaymovetothecloud,thisprocess—whichinvolvesrevampingapplicationsbasedonamodernmicroservicesarchitecture—isoftenoverlooked.Thisisabigmistakefromacostoptimizationstandpoint. Forexample,acompanymighthave100virtualmachinesrunningon-premisesandthendecidetospinupthesame100machinesinthepubliccloudwithoutgivinganythoughttorearchitectingthem. Theproblemis,runningthesevirtualmachinesinthecloudjustastheydidinthedatacenterwilllikelyresultin over-provisioning.Withouttakingthetimetorearchitectthem,acompanymissestheopportunitytousesmallersystemstoreducecosts. Underutiliz