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8 Practical Tips to Reduce and Manage Cloud Expense

By Jessica Day, Senior Director for Marketing Strategy at Dialpad

In 2021, cloud computing is no longer the high-tech buzzword it was a few years ago, but an everyday reality for organizations small and large.

Microsoft, Google, and Amazon all operate large data centers to power their cloud services, and a number of cloud computing systems have been developed that function at a layer between your business and the physical data host.

There are cloud platforms for hardware developers, cloud providers catered to Linux-based IT services, and various industry-specific cloud services. In fact, no matter what your business's computing needs might be, the chances are there's a cloud-based solution out there.

With companies becoming more and more reliant on this technology, it can be easy for costs to start snowballing. To help keep things in budget, check out these eight tips for managing your cloud expenses.

1. Plan Ahead Based on Data Analysis

When developing your cloud strategy, it pays to plan ahead and make decisions based on a thorough cost/benefit analysis.

Start by mapping out your current resource usage, then estimate what each service's requirement will be for the year ahead. Some companies will require large amounts of file storage, while others will prioritize the running of their business communication tools.

Once you have an understanding of your predicted requirements, use this information to purchase pre-paid resources, helping you to save on your total expenditure.

2. Rightsize Your Cloud Configuration When Migrating from Legacy Data Practices

Rightsizing is the practice of anticipating data storage needs to save on unnecessary costs. With legacy data centers, the practice of overprovisioning when deploying new resources was common. However, the flexible nature of cloud computing, which can dynamically respond to surges in demand, makes this unnecessary. Be sure to take full advantage.  



3. Use Cost Optimization Software

These days, there are many cost management and optimization tools that can help you save money by highlighting unnecessary expenses such as unused instances or superfluous instance sizing.

Whether your business is a VoIP service delivering 3-way phone calling and videoconferencing or a mobile app developer, cloud-based digital service providers are especially likely to miscalculate their instance-type decisions.

Depending on the cloud platform you're using, you might want to make use of an in-platform cost optimization module like GCP Billing or AWS Cost Explorer. Alternatively, you can employ custom cost optimization software such as CloudAdmin.

4. Identify Idle Resources

The advantage of using cost optimization tools to monitor resource usage is that it makes it easy to identify areas where you're needlessly running idle or unnecessary tasks.

Examples of idle resource usage that might be racking up on your cloud bill are on-demand Instances/VMs, Relational Databases, Load Balancers, and Containers. Once these have been identified, you can schedule them to turn off when not needed.

It's best to think of your cloud resources as a subset of your broader business assets. Their management can be fitted within your scheme for optimizing general workplace productivity and aligned with the computing needs of your company's different departments.

5. Take Advantage of Discounts Offered by Providers

While new businesses can shop around for the best cloud service provider for their needs, there are plenty of ways you can make savings without switching providers. Understanding the pricing mechanisms of your cloud platform can help you make more cost-effective business decisions and make the most of the savings opportunities they provide.

Each of the big three cloud providers offers purchasing options for reserved resources at reduced costs compared to their On-Demand prices. AWS Reserved Instances, Azure Reserved Virtual Machine Instances, and Google Committed Use Discounts allow customers to purchase cloud capacity in advance for a lower price.

Cold storage services, such as Amazon Glacier or Google Coldline, are another way to save money by paying less per gigabyte for the long-term storage of data. This is a useful option for backup and non-critical data that doesn't need to be accessed every day.



6. Partition Cloud Consumption into Departmental Subscriptions

Cloud costs can be minimized by organizing services according to business unit-specific subscriptions. Require uniform naming and tagging standards across your organization to make the most of the auditing and reporting capabilities of your cloud infrastructure.

Just like you would employ protocols to provide quality assurance for call centers, outsourced or departmentalized workflows that have access to your cloud resources should be subject to the same standards.

Ensure teams designate the owner of each instance and the project it relates to. This will help build accountability and means that if higher than usual bills occur you can trace it back to the specific instances and follow up with the relevant teams to identify why.

7. Streamline Cloud Usage When Building Applications

Modern cloud providers make it cheap and easy to build applications through their platforms. Whether this means facilitating video calls online through your company's communication systems or developing new software products from scratch, there are significant advantages to utilizing Serverless Computing in development.

In this model, the responsibility for provisioning, maintaining, and patching servers is shifted from the customer to cloud providers. This allows developers to focus on building new features and innovating, paying only for resources that they need.

What developers often overlook, however, is that once they start incorporating cloud functions into their production, costs can quickly spiral out of control. Best practice is to estimate and optimize cloud usage early in development before you start running heavy workloads in production.

8. Make Sure You Are Running the Most Efficient Instance Types

One simple way to reduce cloud costs that's rarely mentioned is to modernize all your databases and virtual machines so they're running the most up-to-date instance type from your cloud provisioner.

A typical omnichannel retail platform running on Amazon Web Services can easily be operating a dozen or more instance types, so many companies put off modernizing as it can seem daunting. But did you know that cloud providers incentivize instance modernization by pricing the newest generations lower?



Considering that running the latest instance families will lead to better performance all around and save you money, it's almost always worth the effort to upgrade.

Isn't it time you started implementing these eight top tips?



Jessica Day - Senior Director, Marketing Strategy, Dialpad

Jessica Day 

Jessica Day is the Senior Director for Marketing Strategy at Dialpad, a virtual faxing platform that takes every kind of conversation to the next level-turning conversations into opportunities. Jessica is an expert in collaborating with multifunctional teams to execute and optimize marketing efforts, for both company and client campaigns. Here is her LinkedIn.

Published Tuesday, June 15, 2021 7:33 AM by David Marshall
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