Blog Cost Management May 20, 2021

7 Inefficiencies That Cloud Cost Optimization Tools Can Fix

Adoption of public cloud services has transformed the way companies manage their IT infrastructure. Computer systems are no longer fixed upfront investments, but an everyday operational expense. Enterprise IT infrastructure has become a dynamic and complex environment, where users can spin up new cloud resources in a matter of clicks. What’s more, you can choose from a wide range of instances, storage types, and payment mechanisms, each designed to suit different use cases and levels of resource consumption.
However, this presents new challenges to operational management. These days, optimizing cost is as important as optimizing performance. Yet is it possible to do both?
Cost monitoring and optimization tools within cloud management platforms can bring you the visibility you need into your cloud costs and utilization. The right toolset can help you keep your monthly cloud bills in check and reduce your management overhead.
By deploying the right cost optimization tools, you can identify inefficiencies in your cloud environment and save money on your next cloud bill. Here are just seven of the many issues a cost optimization solution can fix:

1. Unused Instances

In the same way the cloud makes it easy to spin up virtual machines, it’s just as easy to forget about them. However, you pay for your cloud infrastructure whether you use it or not.
Cost optimization tools will help you address the issue of cloud sprawl. This is where an organization runs up massive bills through uncontrolled ordering of instances and other on-demand IT services—often as a result of development testing and shadow IT projects.
By keeping track of all instances in your billing accounts, cost optimizing solutions can identify those that are inactive or unhealthy. They can then flag these instances for manual or automatic removal.

2. Incorrect Instance Sizing

Many enterprise cloud users still have an on-premise mindset and provision far more capacity than they actually need.
To avoid unnecessary waste, you’ll need to analyze the resource consumption of your virtual machines to determine the correct instance sizing for optimum balance of cost and performance. The right sizing process can recommend larger sizes, smaller sizes, or even different types of instances based on your usage to better suit your computing needs.
This is no easy challenge. A large-scale enterprise cloud environment has potentially hundreds or thousands of instances running at any one time.
Cost monitoring tools automatically provide instance sizing recommendations, helping you to avoid hours of manual calculations. They can also help you match your workloads to more suitable alternatives in other instance families. This could mean switching from general purpose instances to those designed for specific use cases. To save time and effort, look for solutions that can automate the right sizing process with one click.

3. Unattached Persistent Volumes

This is a particularly important housekeeping task for AWS and Microsoft Azure users. Attached volumes aren’t automatically deleted when you terminate the associated instance—unless you change your default termination policy.
As a result, you could rack up unnecessary charges for storage you no longer need. This is even more expensive if you leave SSD-backed volumes sitting around, which cost more than double their HDD counterparts.
You only pay for what you’re using in the cloud. But without clearing out these unattached resources, the cloud provider still considers the volumes active. Cloud inventory monitoring systems can identify and delete unattached persistent storage disks, such as Amazon EBS volumes. This ensures that you save money on your cloud bill. 

4. Orphan Snapshots

Just as attached storage volumes remain after you terminate an instance, so do your volume snapshots.
While point-in-time backups on both AWS and Google Cloud Platform are incremental, the first snapshot is a compressed version of your entire disk. Depending on your retention period and how frequently you back up, you’ll need at least as much capacity again to store subsequent snapshots. Microsoft Azure, until April 2020, only supported full point-in-time snapshots which meant the storage cost of maintaining backups on Azure could be even more expensive. Make sure you are leveraging incremental snapshots and pruning old versions as desired.
Cloud cost management platforms can help you keep costs down by alerting you to orphan snapshots and providing a quick and easy way to remove them.

5. Underutilized Discount Capacity

Discounted alternatives to standard on-demand pricing, such as AWS and Azure Reserved Instances, can significantly reduce your overall cloud expenditure. As these are pricing constructs rather than actual running instances, they don’t necessarily require any direct operational management of your cloud infrastructure.
Reserved Instances can deliver savings in excess of 70%, where the exact discount depends on:

  • The type of instance and payment terms you choose
  • The flexibility you require, such as the ability to change the specification of the running instances applicable to your purchases
  • How well you utilize your reservations, by ensuring you have matching instances consuming your Reserved Instance credits as much of the time as possible

AWS Reserved Instances can immediately reduce your bill if you choose to purchase them without any upfront payment. More advanced cost optimization tools provide support for discount mechanisms, such as Reserved Instances. For example, they can offer exchange suggestions for those Reserved Instances with built-in flexibility. This ensures reservations are better aligned to the resource consumption patterns of your applications.
Cloud cost optimization tools can also work the other way: by showing you where credits aren’t being used. They can then make recommendations on how to rebalance your workloads so they’re covered by your unallocated reservations. Furthermore, they can alert you to reservations that are about to expire, identify workloads that could benefit from a switch from on-demand to RI pricing, and make RI purchase recommendations.
Taking advantage of other discounts, like AWS Savings Plans, can also help lower your monthly cloud bill. Similar to Reserved Instances, these require IT decision makers to plan their expenses either one or three years in advance before they sign the contract. However, you are committing to a dollar spend, hour-by-hour, as opposed to specific instance types. Regardless, to retain the pay-as-you-go benefits of the cloud, you’ll need cost optimization tools that helps you get the most from these long-term commitments.

6. Lack of Best Practice Checks

Cost optimization works best when you know what you’re looking for. After all, if you don’t know the problem exists, how can you fix it? 
While native tooling by cloud providers offer some foundational best practice checks, more sophisticated cost optimization solutions can help by performing deeper best practice checks. These checks point to potential resource waste in your cloud environment. For example, they can highlight redundant static IP addresses, unused provisioned storage capacity, and idle load balancers. When added together, these can substantially increase the number of unnecessary charges in your monthly cloud bill. 
In addition to your core cost management responsibilities, you can implement a whole host of other measures to streamline the cost of running your cloud infrastructure. Rather than searching for these issues manually, a cloud management platform can offer suggestions for savings all in one place.

7. Too Many Manual Tasks

The longer you leave cloud inefficiencies unattended, the more quickly your costs mount up. By leveraging the automation features of cost optimization tools, you can set instant responses to misconfigurations, nipping them in the bud as soon as they arise.
Automating your cost optimization best practice checks helps you keep costs in constant check 24/7. Automation can reduce or eliminate manual procedures. This, in turn, frees up your operations teams to focus on other aspects of running your cloud. 

Think Third-Party When It Comes to Cost Optimization Tools

laptop with CloudCheckr CMx cloud cost management software
To see real success with cloud cost management, look beyond your cloud vendor’s native monitoring tools.
Third-party cost tracking services developed with enterprise needs in mind offer additional functionality, such as spending forecasts, cost allocation, and multi-cloud capabilities. Some cloud management solutions also address security misconfigurations. After all, a security breach can cost far more than any cost savings tool can save. Be sure to consider whether you want to allow third party software to run on your instances. Remember the SolarWinds security breach, where malicious code piggybacked on to their software? Sometimes an Agentless approach is safer.
Above all, cloud management offers a deeper level of insight that large-scale organizations need to manage their complex cloud environments—and a level of control that any cost-aware enterprise cannot afford to do without.

Gain Actionable Insights for Immediate Savings

Our experts have seen it all—from hundreds of siloed accounts to millions of dollars of resource waste. See how CloudCheckr can help you get your cloud costs under control with a free Cloud Check Up.

About the Author

Todd Bernhard has been with CloudCheckr handling Product Marketing and Technical Evangelism roles since 2017. He holds multiple certifications including AWS Solutions Architect Associate, Microsoft Azure Fundamentals, Google Cloud Associate Engineer and FinOps Certified Practitioner. Prior to joining CloudCheckr, Mr. Bernhard was an award-winning, bestselling mobile app developer and entrepreneur and previously worked for Sun Microsystems, as an Evangelist, Sales and Technical Trainer and Product Marketing Manager for Sun’s high-end data center servers.