As public cloud services continue to expand their offerings, organizations are increasingly moving their applications to the cloud driven by the promise of agility and flexibility combined with cost-effectiveness. However, many companies have learned that running workloads in the public cloud introduces a new set of financial challenges. Cloud cost monitoring and reporting have become critical tasks for every team. Despite the prevalence of cloud computing, companies still tend to struggle with controlling cloud costs. Overspending by 13% and squandering 32% of their cloud investments is not uncommon.
To address the cloud cost management challenge, a new discipline called FinOps has emerged, which consists of best practices that help teams work together in a cloud environment. Implementing cost-cutting methods can be challenging, especially when convincing engineers to consider costs, as they rarely made such decisions before the cloud. Currently, 81% of IT leaders have been directed by their C-suite to focus on cloud cost optimization rather than increased cloud investment.
Cloud cost optimization is the process of minimizing costs and maximizing efficiency in cloud computing environments. The use of cloud resources such as storage, processing power, and network bandwidth can be analyzed and optimized to reduce costs while maintaining or improving performance. Implementing cost optimization strategies enables companies to save on cloud infrastructure costs without sacrificing service quality. Cloud costs can be optimized using various techniques, including rightsizing, resource allocation, reserved instances, and autoscaling.
To optimize cloud costs, leaders can take two key steps. First, achieve cost visibility by understanding the cloud bill, identifying which team, project, or department causes overspend, and making cost insights accessible to engineers. Second, reduce costs with automation by using automated cloud management solutions throughout the software development lifecycle, automating development pipelines, and implementing resource autoscaling.
Cloud cost optimization tools can help analyze resource utilization, identify cost-saving opportunities, and automate optimization strategies. Built-in cost monitoring tools from public cloud providers interact seamlessly with billing data, but they may not provide a complete picture or access to real-time data, especially when using services from multiple cloud providers. Custom and homegrown solutions can be tailored to the stakeholders involved in cloud planning, budgeting, and forecasting. Third-party cloud cost management platforms are another option to consider.
To optimize cloud costs, organizations can follow these best practices: check the cloud bill and allocate resources, develop a tagging and labeling system, create and review a cloud cost optimization strategy, know how much resources cost in real time, set monitoring standards and alerts, look for idle resources, and use cost metrics and tools that engineers are familiar with.
In conclusion, optimizing cloud costs is critical for companies to get the most out of cloud computing. Implementing cost optimization strategies and leveraging automation and cloud cost optimization tools can help companies save significant cloud costs over the long term.