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Top 6 Best Practices in Cloud Cost Management

By June 8, 2022June 24th, 2022No Comments

Introduction

In recent years, cloud computing has become the go-to choice for businesses that are looking to lower capital costs, increase agility and rapidly scale infrastructure. Cloud technologies have become a part and parcel of enterprise strategies, with 92% of organizations placing at least parts of their IT environment on the cloud. Cloud also offers benefits such as scalable storage which is a huge benefit for businesses. You can back up your data in the cloud, and store as much information as needed without having to worry about whether you’re going to run out of room. Since cloud storage allows users to access their information from any device, it is easier than ever for employees to share files and collaborate on projects regardless of where they are or what type of technology they have at their disposal.

However, while cloud computing makes it easier than ever before to spin up new applications and services, even small mistakes can result in a massive bill at the end of every month. Nearly 65% of IT leaders cited “cost management and containment” as one of their pressing concerns in running cloud technologies and applications. From overprovisioning infrastructure and utilizing poorly-designed applications to leaving resources running when not needed or paying for unsupported services, there are plenty of ways that businesses might be wasting money on their cloud bills without even realizing it. In a recent survey, 1 in 12 IT managers said they end up spending an alarming 40% more than they budgeted – with 30% of total cloud spend wasted on unused resources. Fortunately, there is an easy way out by implementing the following best practices and recommendations. Using these best practices, your organization will finally get the upper hand on your cloud costs without having to sacrifice performance or productivity. For more information on this, please consult Cloud Computing San Diego.

6 Best Practices for Effective Cloud Cost Management

Make cloud costs transparent with tagging

Many businesses tend to overlook this nifty little feature offered by cloud management platforms. However, utilizing tags can save you time and money by enabling you to organize cloud costs by department or business unit, or other relevant criteria such as which type of cloud services are being used. For example, if your organization has multiple teams using AWS together for various projects, each team can be associated with their own tags that include their name or department name. Once the organizations have been tagged correctly (e.g., “West Co” for West Coast office), anyone who uses the tag view will see all of the spending associated with all teams from that location together in one place. The alternative is having to sort through many different accounts with potentially different budgets and rates across every single department within each location separately. This effectively results in less hassle, time, and money spent.

Improve visibility by consolidating cloud accounts

Consolidating all cloud accounts into a single view can be a strategic tool for effective cloud cost management. You can use a cloud financial management solution to consolidate costs across multiple clouds or apps, and streamline budgeting for IT spending.

You could also choose to consolidate the cloud accounts with a tool that integrates with the tools you already use. For example, if employees in your company rely on Slack or Outlook for their workday communications, you might want to integrate your cloud financial management tool directly into these platforms so employees can more easily track their current balance and outgoing expenses.

Get a cloud financial management solution

Cloud cost management solutions can help you better understand your cloud costs, identify cost savings opportunities, monitor cloud costs, and forecast future expenditures. They also provide control capabilities that allow you to set limits on cloud spending. If you’re looking for a way to better manage your cloud costs, an investment in a solution might be worth considering.

Get insights through reporting and visibility

Cost management is not a one-size-fits-all endeavor. In fact, it’s best to approach it as an ongoing process that you continually improve upon over time. For example, if you’re in the process of developing cloud cost management strategies for your organization and need help getting started, here are some key considerations:

  • Reporting is the most important tool for managing costs because it helps you make decisions that lead to better outcomes. Without visibility into where your resources are going and what they’re being used for, cost optimization efforts could be much more difficult to implement effectively.
  • Develop an enterprise view of cloud services usage data across multiple departments within your organization. This enables everyone involved to have access to relevant information about how their department’s spending compares with other units within their group or across other groups within the larger organization as well as general trends over time (i​e., quarterly reports). This not only enables relative insights but also allows teams to save money responsibly while minimizing negative impacts on service quality levels or quality metrics such as uptime/availability metrics during peak demand.

Use Automated Infrastructure Rightsizing

If you’re not already, automate infrastructure rightsizing during provisioning. This will help prevent overprovisioning and minimize the cost of managing your infrastructure. Here, resources are allocated based on the requirements of your workloads, and excess costs are eliminated from idle resources. IT Support San Diego provides extensive guides on automating infrastructure rightsizing.

Train Your Employees on Cost Awareness

To build a culture of cost awareness, you must train your employees on how to manage cloud costs. As part of the process, establish a formal policy that defines best practices for managing costs such as:

  • Cloud Financial Management Software
    This is recommended because it provides visibility into every dollar spent on public cloud services across various teams and departments in an organization. This allows for greater control over budgets and allows IT departments to understand exactly what resources are being used by which employees and applications.
  • Service Level Agreements (SLAs)
    Every SLA should be strictly enforced by all parties involved including the provider(s), users/customers/partners (internal or external), and vendors who provide discounts based on SLA adherence (e.g., AWS Marketplace Partners). For help and guidance on this, please refer to Managed IT Services Santa Ana.
Steven Truong

Steven Truong is a Marketing Coordinator at I.T. Responsive with a focus on inbound marketing strategy. Steven comes from a professional background with 6+ years of experience in developing effective PR and digital marketing strategies for small and mid-sized businesses in various industries from manufacturing and consumer products to real estate. Seeing these strategies produce successful results and client satisfaction is one of his main goals and passions about marketing. When he doesn’t have his marketing cap on for the IT world, he likes to check out the local food scene in O.C. and find new post-apocalyptic zombie shows to watch.

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