Are You Able to Keep Your Cloud Services Costs in Check?

Cloud computing is one of the hottest trends in the IT world today because it allows companies to tap virtually unlimited resources, as needed, while only paying for the resources that they use. Although it sounds great in theory, when implemented improperly, it can result in significant cost overruns that make cloud computing more expensive than traditional systems. As discussed in an article by Site24x7 there are many factors you should consider when choosing a cloud services company, however in addition to these factors, being able to effectively manage your monthly bills is essential to running a successful company.

Common Causes of Cost Inefficiencies

As discussed in an article from InformationWeek one of the biggest problems with cloud services today is that the majority of instances are underutilized – typically 80% of instances fall under this category while 15% were overusing their server resources. The latency in applications caused by over-utilization results to an estimated 7 percent loss of business. While cloud services have CPU utilization at 17% and maximum RAM utilization at 64%, these levels are higher than traditional infrastructure which is in the range of 8% to 12% CPU usage meaning efficiently managing your servers is a fine line between having too many and too few resources.

Forbes also mentions that cloud computing costs can’t just be attributed to monthly fees. Of the many variables, the top costs include:

• Performance bottlenecks which can lead to poor end user experience
• The impact of poor performance on brand performance and customer loyalty
• Loss of revenue due to server downtime
• Increased costs of resolving problems in a more complex environment
• Increased effort involved with managing multiple vendor contracts

Ultimately while these costs are difficult to quantify, these problems are more challenging to deal with than traditional infrastructure because cloud services typically are billed in variable amounts which are difficult to predict.

Simple ways to Control Costs

Determine your Usage

By using a cloud monitoring tool you can track the health of your companies’ resources while also having a central location to monitor the usage of your infrastructure. With these resources, it is crucial to monitor traditional and cloud infrastructure because doing so allows you to pinpoint the exact inefficiencies of your infrastructure. While it is impossible to predict the future with complete accuracy, by analyzing trends from prior months, you can forecast resource usage and budget for surges. Additionally you might find that you are better off with traditional infrastructure over cloud systems.

Consolidate your Billing

If possible, try purchasing computing resources from vendors who offer consolidated billing for your entire company. Aside from management not having to worry about staying on top of multiple bills, you also might be able to qualify for volume discounts which you were not eligible for earlier. If your vendor doesn’t give you a discount automatically, try using your consolidated data as leverage for better rates.

Use Resources Efficiently

Although it can be tempting to purchase batches of servers with the same specs, doing so is inefficient if you aren’t fully utilizing the systems. Depending on what the data shows, you might find that you can shift more of your resources towards traditional infrastructure, or use smaller containers to meet demand. For the occasional bursts of traffic, check and see if your hosting provider has autoscaling so that your applications can continue functioning without missing a beat.

Taking this a step further, you should tag your infrastructure based on purpose. The granularity of cloud solutions allows you to provision separate containers for different purposes. From there, you can determine where your IT budget should be allocated. An additional benefit is that you also can determine if inefficiencies in your application code are responsible for excessive resource usage.

Going Beyond Infrastructure

While monitoring your infrastructure and shifting resource usage can lead to significant savings with your hosting bills, investing in human capital can also help with cost management. Site24x7 has an article discussing various cloud certifications for IT professionals. By having staff who have in-depth knowledge of cloud infrastructure, your company will be in a much better position to keep costs in check while also ensuring that your company is fully addressing all IT challenges appropriately.

Overall when it comes to cloud technology cost reduction, the fundamental rule of thumb is that you should ensure that your company is using resources effectively based on your needs. Depending on your target market and what you are hosting, a full cloud approach might be sufficient or using traditional infrastructure might be in your best interests. In most cases however, learning to balance the two efficiently is the key to success.

By implementing reliable monitoring tools along with retaining top talent, you should be able to ensure your business is able to stay ahead of the curve.