How Can I Optimise My Cloud Costs? 5 Effective Strategies to Save Money

Despite all their conveniences, cloud services can be quite a hefty line item in a company's budget. 

For medium organisations, annual cloud expenses can range between $2.4 million and $6 million, a significant portion—up to one-fifth—of their total expenditures.

How can businesses rein in their cloud expenses without cutting corners on efficiency? The core principles of cloud cost optimisation mirror those of personal finance management. Analyse spending, prioritise needs over wants, avoid waste, explore cheaper alternatives, and regularly review your usage. With discipline and the right strategies, you can drastically cut your cloud expenses without compromising performance.

Here are a few tips:

Step 1: Understand Your Spending

The first step in personal finance management is often to track where your money goes. Similarly, in cloud management, it's crucial to gather detailed data on your expenditures. Fortunately, major cloud providers offer comprehensive analytics tools to help with this:

• Azure: Utilise Azure Cost Management here.

• AWS: Explore spending with AWS Cost Explorer here.

• GCP: Monitor and analyse costs with GCP Cost Management here.

Step 2: Distinguish Essential from Non-Essential Spending

After gathering data on your cloud costs and analysing where you're spending the most, it's important to prioritise your expenses. Think of your cloud services expenses as your household expenses. What are the equivalents of 'rent' or 'mortgage'—the essential services that keep your operations running smoothly? Which are more like a rarely used gym membership or an overpriced cable package that could be trimmed or replaced?

Idle Resources

A major area where companies often overspend in the cloud is on idle resources. It's like paying for a subscription you never use or leaving the lights on in an empty room. In the cloud, this could mean running virtual machines 24/7 when they're only needed during business hours. Or provisioning storage and databases with more capacity than required.

The solution? Implement autoscaling and scheduling to automatically spin cloud resources up or down based on actual demand. Most cloud providers have services for this, such as Azure Virtual Machine Scale Sets or AWS Auto Scaling Groups. You can define rules to scale out during peak periods and scale in when demand drops.

Step 3: Eliminate Waste

Just as you might cancel unused subscriptions or switch to cheaper alternatives at home, do the same with your cloud services. Identify underutilised resources or instances where you might be over-provisioned and scale down accordingly.

A common case of cloud wastage is oversized instances. It's like buying a huge house for just one person. You're paying for more computing power than you need. Review your workloads and downsize instances wherever possible. For example, moving from a high-end virtual machine to a smaller one for low-compute tasks like web servers.

Switching to discounted instances could save you up to 70% versus on-demand pricing. Reserving instances upfront (Reserved Instances on AWS, Reserved VMs on Azure) provides a significant discount in exchange for committing to that instance type for 1-3 years. Spot/Preemptible instances are another cost-effective option for fault-tolerant workloads.

Storage optimisation is also key. Regularly review your stored data and archived backups. Delete what you no longer need, just like you'd declutter your home. Lifecycle policies can help by automatically transitioning infrequently accessed data to cheaper archive storage tiers.

Step 4: Shop for Alternatives

Would you stick with an internet provider that charges twice as much as another for the same speed and reliability? Unlikely. Apply the same questioning to your cloud providers and services. Sometimes, shifting workloads or even negotiating better terms can lead to significant savings.

Step 5: Optimise Continuously

Personal finance isn’t a "set and forget" deal; it requires ongoing adjustments and reviews. Similarly, cloud cost optimisation is an ongoing process. Regularly review and adjust your cloud services to align with your business needs and consumption patterns.

As a general principle, treat your cloud spending with the same scrutiny as your personal finances to unlock significant savings without compromising on the tools and services that are crucial to your business operations. By adopting a conscientious and proactive approach, you can ensure that every dollar spent on the cloud is truly working for you.

At AxiomNetic, we specialise in cloud cost optimisation and are ready to help you navigate the complexities of cloud spending. Contact us today for a free initial consultation and start optimising your cloud investments for maximum efficiency and savings.