Cloud Cost Optimization: Five Ways to Save Money on Your Cloud Hosting

Startups

Paul Korzeniowski · Jan 9, 2024 · 5 minute read

Congratulations! You’re about to deploy a new cloud server. You will now have many decisions to make. You’re aware that a cloud solution is going to save you money over an on-premises setup. But how can you get the features and performance you need, along with the pricing you want? And most importantly, how can you keep costs under control going forward, to ensure there are no surprises along the way? 

Many businesses that choose cloud computing find their actual costs are different than their expectations – many times quite significantly. In fact, according to a recent Pepperdata survey, more than one-third of businesses have cloud budget overruns of up to 40%, and one in 12 companies exceed this number. So, what steps can corporations take to better manage their cloud hosting bills?

1. Monitor Your Cloud Costs

The first step to addressing a problem is recognizing that it exists. Cloud hosting offers companies a great deal of flexibility and agility. New infrastructure can be spun up quickly, often with a few clicks. In addition, enterprises are empowering business analysts to take more of a role in the application development process. However, these individuals often have only limited infrastructure knowledge and over provision resources. Sometimes, instances are spun up, say for testing, used, but not taken down when they are no longer needed. Such changes often go unnoticed but impact the bottom line. We recommend conducting a routine performance analysis to continually oversee expenses. 

2. Audit Your Systems Periodically

Your company needs to put processes in place to check how your applications are functioning, so they don’t eat up resources unnecessarily. You should keep an eye out for instances that show minimal or no activity over an extended period of time. If a database does not have significant read or write operations over several weeks, it may no longer be needed.

As enterprises undertake new business initiatives, usage levels can rise quickly and dramatically. Such increases may trigger pricing changes. You may need to downsize, upscale, or adjust as needed.

Regularly reviewing cloud infrastructure will ensure that you have the right size instances and resources for each workload. As you examine your systems, remember to check your support and service contracts. Sometimes, companies continue to pay for support services on systems that they no longer use.

3. Improve Inefficient Code

When moving applications to cloud hosting, you need to take a close look at the application design. Businesses build applications to run them efficiently in their legacy data centers. The move to the cloud offers them different ways to deploy their systems. Significant operational cost savings are possible, but only if the organization modernizes the application design.

For instance, most companies rely heavily on data analysis to run their business. A web server may run each line of a multipart query on the web server. Embedding it on the database server reduces transmission traffic and processing needs. They can embrace containers as well. These modules have a modern design and run more efficiently than legacy code.

4. Reduce Unnecessary Storage 

Data volumes have been growing significantly as companies extend their application capabilities. Storage utilization can be a big factor in driving up cloud hosting costs. Traditionally, businesses put lots of duplicate data and redundancies in order to protect [YM3] information that could be lost, a strategy that exponentially drives up costs. 

Regularly review and clean your storage. Remember to audit your storage systems and delete outdated or unused data, such as outdated backups, unused snapshots, or old data that no longer has business value.

Pricing models for cloud storage infrastructure include monthly fees for cost-per-gigabyte of stored capacity. Cloud storage costs can be optimized through the use of the different storage tiers in the cloud as data ages in its life cycle.

Block storage offers high performance, and is ideal for transactional and structured data that requires frequent read and write operations. This storage type generally comes with a higher cost but delivers high performance for latency-sensitive applications.

Object storage works well with unstructured data. It doesn’t offer the same level of high-speed [YM5] access as block storage, but it works well with infrequently accessed data, such as archival storage or backup data. Implementing correct storage tiers reduces overall costs.

5. Assign a Usage Tracker

Cloud computing’s sprawl often occurs as organizations evolve. Assigning someone to track new requests and examine the utilization of current servers and services becomes essential to controlling costs and reducing unnecessary sprawl.

Conclusion

Optimizing cloud hosting costs requires a combination of strategic planning and continuous monitoring. By rightsizing resources, auditing your systems, monitoring usage patterns, optimizing storage, and designating an overseer, you can achieve significant savings without compromising performance or reliability. As technology continues to evolve, properly managing your cloud server use is key to maintaining a cost-efficient and high-performance cloud infrastructure.