9 steps to control your cloud costs

Shifting applications and workloads to the cloud has many potential benefits, including increased efficiency, business agility, and security. 

However, many organizations experience unanticipated costs when moving to the cloud. Through 2024, research firm Gartner predicts 60 per cent of infrastructure and operations leaders will encounter public cloud cost overruns. Since the cloud is an operational – rather than a capital – expenditure, many IT managers believe it will save them money; but that isn’t necessarily the case. You need to have a solid cloud strategy and transition plan in place to make the most of your cloud budget. Following are nine steps you can take to control your cloud costs.

1. Get better visibility into your data

   Invest in tools that allow you to monitor your cloud costs in real time. You should also make sure any applications you move to the cloud are stable, so you can accurately assess their performance before committing to a cloud contract. The last thing you want to do is to commit to a multi-year deal, and then have a cloud resource sitting idle and costing you money.

2. Review under-utilized resources

   Use cost analysis and optimization tools regularly to review your resources to decide if you’re buying more than you need. Many cloud services come with built-in applications that let you explore your costs and usage, but you can also use third-party solutions.

3. Deploy a strong tagging structure

   Tags – metadata labels that let you organize your resources, ensuring different stakeholders have access to the data they need – can help keep your budget on track. Tags can be set to alert you if a department hits a spending threshold, and help you track your spending on a continuous basis.

4. Take advantage of reserved and spot instances (where appropriate)

   Reserved and spot instances can give you discounted pricing compared to what you pay for on-demand instances. Reserved instances let you pre-pay for capacity over a set period of time – but it only makes sense if you wind up using that capacity. Spot instances become available when cloud providers have excess capacity and offer the instances at a discount. However, instances can be pulled at any time, so they aren’t appropriate for critical workloads.

5. Have a scale-in and scale-out policy

   A scale-in and scale-out policy lets you automatically scale up when demand increases and scale down when demand drops. It’s ideal for applications that don’t have predictable load patterns, and helps make sure you’re not spending more than you should.   

6. Put governance policies in place

   Governance defines what users can do in the cloud. For example, a governance policy could allow users to only save information to data centres in a particular country. Or, it could allow them to only spin up a certain type of virtual machine.

7. Re-evaluate your design choices

   If you aren’t achieving the cloud ROI you expected, consider changing your infrastructure design. If you’ve moved applications from on-premises to the cloud, you might want to modernize the applications to make them better-suited to a cloud environment.  

8. Find a good balance

   You need to find the right balance between cost and reliability, performance and security. You don’t want to trade off security and backup – those are important-to-have features. Instead, you might want to lower your mean time to recover or pass on automation, for example.

9. Consider managed services

   Deciding which infrastructure – public cloud, private cloud, or on-premises – best suits each workload and application and how to achieve the performance and security necessary to keep users satisfied is no simple task. Managed Service Providers and infrastructure service providers have the expertise to help organizations manage and optimize their cloud usage.

Shifting to the cloud can bring organizations many benefits, but to make the best use of your budget, it’s important to consider all aspects of your cloud architecture. Working with a vendor-agnostic cloud service provider that has experience in building hybrid cloud infrastructures will help ensure you’re able to meet your performance requirements, while benefiting from cost efficiencies.