Cloud Cost Optimization Techniques
The cloud computing market has exploded in recent years, and the cost of running applications in the cloud has also quickly added up. It’s easy to get overwhelmed with all the costs associated with running an application in the cloud, but there are a few things you can do to optimize your cloud costs and make sure you’re getting the most out of your cloud investments. In this article, we’ll explore some of these cost optimization techniques and how they can help you save money on cloud computing. So, if you want to take control of your cloud expenses and keep them under control, read on to learn more.
Although I've mostly worked with the AWS cloud, the techniques described in this article are also applicable to Azure and Google Cloud Platform, two other major cloud service providers.
What is cloud cost optimization?
Cloud cost optimization is the process of reducing your spending on cloud services while still maintaining or improving performance and functionality. Several techniques can be used to achieve this, and the most effective ones will vary depending on your specific needs and goals.
Some common cloud cost optimization techniques include:
Right-sizing your resources
This means only using the amount of CPU, memory, storage, and bandwidth that you actually need. Oversizing your resources is one of the most common causes of wasted cloud spending.
Why does oversizing or overallocation happen? At the initial phase, when the applications are to be deployed in a production environment, the architect team needs to consider some resource baselining depending on the estimated number of hits that the application will receive. As there is no clear idea how much traffic may hit the application, to be on the safer side, the architect and development team always configure the resource to be on the higher side and allocate the server and other resources accordingly.
However, once the application is live, it is possible that the load on it is lighter. This is where overallocation starts having a cost.
How can we identify oversized resources?
Using a monitoring system helps to determine the optimal size for each of your resources. Based on an analysis of usage patterns and trends over time, we can quickly identify underutilized resources and decide to downgrade them.
Identifying and removing unused resources
If we scan the cloud account regularly, we will find most of the unwanted resources and data lying in the cloud account, which keeps adding to the total cloud cost.
For example, if older backup copies are not deleted, the daily AMI snapshots we take as backups for the server can pile up over time. We've seen people miss this and discovered that the total snapshot size increases to a very high level, impacting storage costs.
Also, we've seen storage buckets being created and massive amounts of data being dumped into them; however, most of the time, this data is not accessed on a regular basis and simply sits there. Such data should be moved to an infrequent access storage class, such as Glacier, which is less expensive than standard storage.
https://aws.amazon.com/s3/storage-classes/
Leveraging reserved instances / saving plans
Reserved instances can provide significant savings over on-demand pricing, but only if you're sure that you'll be able to use them consistently. If you don't think you'll be able to use a reserved instance for its entire term, it may be better to stick with on-demand pricing.
When you commit to using a certain amount of computing power for a one- or three-year term, you can save up to 50% on your bill with reserved instances or savings plans.
https://aws.amazon.com/ec2/pricing/reserved-instances/
https://aws.amazon.com/rds/reserved-instances/
https://aws.amazon.com/savingsplans/
Spot Instances are a cost-effective choice if you can be flexible about when your applications run and if your applications can be interrupted. For example, Spot Instances are well-suited for data analysis, batch jobs, background processing, and optional tasks.
Spot instances can save up to 90% of the cost of on-demand instances in the same scenario.
https://docs.aws.amazon.com/AWSEC2/latest/UserGuide/spot-savings.html
Log deletion and retention
Every time a cloud service is used, logs are generated. We can see these logs in CloudTrail and CloudWatch services,
Older logs of any services are of no use; we should only keep logs for 30 days, and logs older than that should be automatically deleted. A log retention policy of 30 days needs to be applied in such cases. If the older application or system logs are to be kept for compliance reasons, we can automate the log movement to another low-cost storage solution like Glacier. This help to save significant cost.
Monitoring usage and cost controls
The only way to truly optimize your cloud spend is to keep an eye on it regularly. Your usage patterns can have a big impact on your costs.
Setting budget alerts on the billing is one technique to keep track of cloud billing costs; when the bill reaches a predetermined threshold, an alert is generated and sent to the specified email address.
Conclusion
Cloud cost optimization is an essential skill for businesses that rely on cloud infrastructure. The techniques described in this article can provide a roadmap to help you get started with optimizing your cloud costs and getting the most out of your cloud resources.
By carefully monitoring usage, leveraging discounts, and automating workloads, you can ensure that you are making the best use of your cloud budget while ensuring that performance meets or exceeds expectations. Try these tips today to start saving money and improving efficiency or let us help with our cloud optimization services.
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