Cloud Based Server Costs

Are you looking for ways to optimize your cloud-based server costs? Many organizations have migrated to the public cloud but struggle to optimize their Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) spend. In this article, we will share some of our favorite tips to help you optimize your cloud-based server costs.

Cloud Based Server Costs
Cloud Based Server Costs

Tip 1: Use Discount Models

If your organization hasn’t signed an enterprise agreement with a cloud provider yet, we highly recommend engaging your procurement department to craft a contract that gives you discounts as part of using the cloud provider’s platform. Cloud providers offer various discount models such as reserved instances, reserved VM instances, and committed use. Leverage these discount models to optimize your costs.

Tip 2: Continuously Right-Size

Design your workload to use the resources it actually needs. Over time, audit and adjust your workload’s capacity, such as CPU, memory, and IOPS, to align with its actual requirements. Right-sizing your workload will significantly reduce its cost.

Tip 3: Leverage Third-Party Optimization Tools

Cloud providers offer native tools like Trusted Advisor and Adviser to optimize your spend. However, third-party optimization tools provide advanced features and capabilities that can help you further optimize your costs. These tools monitor your workloads and make recommendations based on their usage patterns.

Tip 4: Enforce Tagging

Implement a tagging strategy to ensure every asset created on the cloud provider’s platform is associated with a tag. Tags help you easily track and manage resource usage and allocate costs. Enforcing tagging also enables chargeback or showback, allowing you to show the usage and cost breakdown to different departments.

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Tip 5: Continuously Audit

Regularly audit your resources to identify idle or unused instances. By having conversations with resource owners, you can determine which resources are still needed and align them with the right discount models. Auditing helps reduce spend sprawl in your IaaS and PaaS environment.

Tip 6: Implement Storage Lifecycle Management

Implement a policy that automatically moves unused resources between different tiers of storage based on their lifecycle. This optimization technique can significantly reduce storage costs by utilizing lower-cost tiers for less frequently accessed data.

Tip 7: Design with Cost Optimization in Mind

Every technical decision you make when designing your workload has a cost implication. Optimize your workload by leveraging the cloud provider’s native services and features, such as load balancers, database as a service, serverless, and container cluster management. Designing with cost optimization in mind reduces immediate costs and operational expenses.

Tip 8: Use Spot Instances

Take advantage of spot instances offered by cloud providers. Spot instances are compute instances offered at significantly discounted rates. They are suitable for high-performance compute, stateless, and batch job workloads. Be aware that spot instances can be turned off by the provider at any point, so use them for the right workloads.

Tip 9: Upgrade Your Instances

Cloud providers regularly introduce new and more efficient instances. Take advantage of these new generations of instances that are designed for the same workload you’re using. Upgrading your instances can reduce costs while benefiting from improved performance.

Tip 10: Schedule Resources

Identify workloads that are only used during specific hours and schedule them to turn off during non-peak or non-usage hours. Leveraging scheduling can save on the cost of idle resources.

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Tip 11: Implement Chargeback or Showback

Implement a showback model to track and report resource usage and costs to different departments. This transparency enables conversations about resource utilization and justifies costs from a business perspective. Chargeback integration with ERP systems is a more complex option.

Tip 12: Reward Financial Responsibility

Incentivize individuals and departments who actively contribute to cost optimization efforts. Reward financial responsibility through bonuses, time off, or promotions. Shifting the budget responsibility from the IT department to business stakeholders helps create a culture of financial accountability and awareness.

These tips will help you optimize your cloud-based server costs. Remember to continuously assess and adjust your workload’s capacity and leverage the cloud provider’s native services and features to further optimize your costs. Implementing tagging, auditing, and showback will ensure transparency and accountability. Rewarding financial responsibility encourages a proactive approach to cost optimization. By following these strategies, you can effectively manage and reduce your cloud-based server costs.

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