How to Address Cloud Cost Optimization, The Leading Cloud Computing Challenge?

Before a few years, it wasn’t easy to picture cloud computing in its current form that has undergone significant evolution over the years. This would easily make sense to you if you keep a close watch on industry white papers and analyst reports.

According to Flexera’s annual customer survey, the way in which enterprises view cloud challenges has undergone drastic changes over the years. The comparison of 2016 results with 2020 results indicates that the priorities have been shifting when it comes to cloud strategy. As of 2016, the primary challenge was related to the resource/skills gap. These priorities were followed by Security and compliance issues. The cost was clearly a secondary priority specifically meant for those at a more mature level.

As of 2020, cost management is the number one cloud initiative for many businesses except for those in the groups that have recently adopted the cloud services. Even among these groups, cost management is the second most important concern. It seems like security has dropped out of the top five concerns. Governance is important but it seems to be fading as well. Cost optimization has become one of the major concerns among companies.

By studying analyst reports and speaking with customers, we come to realize that enterprises lack a clear understanding of optimization and ways to reduce cloud waste unlike processes like security, migration, and governance. Despite the easy availability of numerous tools that can improve visibility and make cost management much easier, cloud waste keeps on growing with the growth of infrastructure.

Handling governance and security issues requires a lot of effort, time, and money. There is no denying that we should find out ways to address these challenges. Realizing cost optimization can help free up more of the budget in order to deal with these problems.

Elimination Of Waste: The Starting Step Of Cloud Optimization

Why is cloud optimization given this level of importance? The reason is that a huge amount of money spend is waste that is of no use to the user. Eliminating unnecessary resources does not cause your enterprise any loss. At the early stage of this year, it was predicted that almost $18 billion will be wasted in 2020 and most part of this waste comes from just two elements.

• Idle resources: These are the resources that are paid for by second, minute and hour when they are not actually used. Non-production resources usually fall in this category. The resources used during staging, testing, development and QA are often used only during a 40 hour weekly work period. They are idle for the remaining 128 hours of the week but are still billed.
• Overprovisioned infrastructure: You would sometimes have to pay for resources that are more in capacity than what is needed. According to analyst reports, almost 40% of instances are oversized. Reducing an instance by one size helps the companies cut down on costs by half.

Orphaned volumes, underutilized databases, inefficient containerization, and instances running on legacy resource types are common sources of waste.

Addressing Cost Optimization

Reducing waste is the key to cost optimization. But how do you get everyone in the organization to follow some specific procedures? For this, you can adopt a self-service platform that can be used by all entities in your enterprise including IT, engineers, finance, developers, and DevOps.  Individual application owners are entitled to handle the cost their team is incurring and hence they should be capable of exercising control over the way their resources are managed.

Never make the wrong assumption that cost is the only priority of application owners. The cloud operations team will ideally make use of a platform that enables the app owners or business teams to act based on the recommendations given through that platform.

On analyzing the current trends, it seems like we will experience a surge in demand for affordable multi-cloud tools. They have to be implemented across engineering and operations for ensuring that the self-service nature of the cloud does not get disrupted. Cloud costs remain a worrisome factor and these tools will probably become an inherent part of day to day cloud operations.