Blog   |   Cost Management   |   September 19, 2018

3 Ways to Avoid Cloud Cost Sticker Shock

This article was written by contributing author, Ethan Simmons, Managing Partner at PTP (Pinnacle Technology Partners). 
“Move to the cloud,” they said. “It’ll save you money,” they said.
The cost savings of moving workloads, applications and infrastructure to the cloud is an often-cited driver of cloud migration. And, at first, a subscription-based billing model looks better on the CapEx balance sheet than hefty up-front licensing costs and hardware expenditures.
But now, as the cloud takes on more workloads across enterprises, the C-suite is gasping at the unexpected expenses they are seeing on their monthly bills.
We know. Our business at Pinnacle Technology Partners is built around enterprise cloud adoption—and all that comes with it.
We hear countless horror-stories from prospects of “someone” on their team mistakenly enabling a cloud service that resulted in an enormous surprise on the monthly bill. Or, an AWS or Azure instance gets spun up for a particular purpose, then forgotten about, and never powered-down. Or, a certain service becomes so popular that it consumes multi-gigabytes of data activity, causing unexpected spikes in the monthly bill.
But, before you sink into full-blown “buyer’s remorse,” there are things that you can do to tame your cloud costs into predictable submission.

Avoid hasty RI purchases

In order to achieve billing predictability, many organizations “guesstimate” their usage and move from On Demand to Reserved Instances, committing up-front capital based on their “best guess.” This is often a knee-jerk reaction to pressure from executives to control costs. It’s also like bringing the company’s capital to Vegas for an all-nighter binge on the Roulette wheel.
The only way to successfully leverage RIs is by gathering data over time and making decisions based on this data. Granted, this isn’t the “get rich quick” scheme that the Roulette players are hoping for. But it is the approach that will keep you out of tons of gambling debt in the long run.
If you think that RIs would be the best solution (and it often is), Pinnacle offers a “program” that can help you get costs down in the shorter-term, while gathering data for the longer term. We can get you significant discounts on the largest part of your monthly spend—your EC2 On Demand Instances—while also providing you with a tool that you can use to gather and analyze your data. There is no commitment to take advantage of this. In fact, we even offer a $100 Amazon gift card for a 30-minute phone call just to learn more.

Gain visibility into your resource usage

It’s hard to manage what you can’t see. You need instant visibility into costs across all cloud services and providers, and you need constant monitoring of your cloud platform to identify underused resources, dormant instances and VMs, and inaccurate allocations of EC2 instances.
There are a variety of cloud management platforms that will help you do this—so many, in fact, that it’s hard to sort through them. We use a couple in tandem, to complement each one’s capabilities. This approach works well, and we use it in our Cloud Managed Services practice to continuously scan against over 500 best-practices checks, and dynamically adjust resources (and enable fixes) appropriately.
Which brings us to my next point:

Evaluate third-party resources

There aren’t enough hours in a day, or enough human resources, or many professionals to deal with the additional responsibility of continuously monitoring their cloud environments. There are off-the-bat cost savings to be realized by outsourcing some (or all) of the cloud cost control, governance and security tasks versus hiring new people (if you can find them!) or sucking up the time of your already-tapped current resources. Not to mention, the accountability aspect is off your plate. A good third-party partner is able to fill in the gap, while still keeping you fully “in-the-loop” of what’s going on in your environment. Plus, you can leverage their platform, instead of buying it yourself.

Final word

The flexibility, agility and scale abilities of the cloud are the most compelling benefits of cloud adoption. Just make sure that a predictable cost model and ongoing governance is part of the overall plan, and avoid getting trapped in a “cloud money pit.”

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