How to Spend Less in the Cloud and Boost ROI
Cost — and the desire to reduce it — is a large factor in cloud operations. Cloud providers like Amazon Web Services (AWS) and Microsoft Azure have pricing models that often present enormous savings relative to the cost of building and maintaining data centers. However, the metered pricing model, the proliferation of resource choices, and the overall complexity also means significant savings can be lost if users are not careful with their usage. That, in turn, means that organizations perceive lower cloud return on investment (ROI).
Fortunately, there are ways to boost ROI and get more out of your cloud budget. With that in mind, here are seven tips to help you avoid common errors, reduce costs, and improve your cloud return on investment:
1. Purchase resources wisely
On-demand pricing provides flexibility in the way you manage your cloud. However, it’s not the only way to purchase instances and other compute resources. AWS, Azure, and Google Cloud all offer various committed use discounts and purchase plans that can help you save money and see greater cloud return on investment.
Purchasing Reserved Instances (RIs) in AWS or Reserved VM Instances in Azure is a common way to reduce your overall cloud bill. With RIs, you make a financial commitment over one or three years, with a discount of up to 72% when compared to on-demand pricing.
AWS Spot Instances and Spot VMs in Azure and Google Cloud are another way to save money on cloud computing costs, often by as much as 90%. However, availability for Spot Instances can vary widely, so these are not always a reliable choice for workloads that can’t be interrupted.
AWS also offers Savings Plans, which charge you dollars per hour rather than a single credit, as with RIs. Like RI commitments, Savings Plans are also available for purchase for one- or three-year periods.
2. Properly size instances
When it comes to the cloud, do not simply accept the defaults. You need to have a clear understanding of which instance types will work best for you. In other words, you’ll need a clear picture of how much compute and memory a specific application uses to plan accordingly.
Once you have that information, review your needs and choose the appropriate instance size. It may be large, but it may also be a medium, small, or even micro.
To right size instances and other cloud resources, you may need other tools in place. Rather than sizing for peak demand, use the elasticity of the cloud to work for you through autoscaling. Cloud cost optimization tools automatically provide instance sizing recommendations and can match workloads to more suitable alternatives in other instance families.