There has been a meteoric rise in the number of enterprises using cloud computing recently,  yet, there is a monetary cost associated with the ease of usage. Saving money on the cloud is key for any Organization and they need to know how to make the most of the cloud services they are paying for.  

Optimization of cloud costs is the need of the hour. Businesses can boost productivity and also have happy customers by maximizing their use of the cloud thereby boosting uptime without compromising functionality.  

To avoid financial strain it is critical to manage cloud services utilization as apart from monetary advantages also has the potential to enhance the lives of both employees and consumers. 

Cloud optimization boosts productivity and customer happiness by maximizing their use of the cloud to increase application performance, boost uptime, and decrease downtime. 

Techniques for Cloud Cost Optimization:

Below are some of the techniques through which organizations can implement a variety of cloud cost optimization tactics. 

• Rightsizing: is a technique for optimizing cloud computing resources (viz. instances and storage) to meet current demands by removing underutilized or surplus cloud resources According to ParkMyCloud Rightsizing can save cloud expenditures by as much as 50%.
• Instance Reservation: Organisations that have a stable workload and are able to accurately calculate their cloud consumption can opt for instance reservation service i.e. prepaying for the cloud resources for a set length of time (1–3 years) and are able to drastically cut cloud prices upto 75%.
• Spot Instances: Organisations can use Spot Instances when their workload is neither time-sensitive nor mission-critical and can tolerate some interruptions. Cloud companies provide Spot Instances, which employ spare cloud capacity at a lower cost. Businesses can save up to 90% on cloud costs by deploying Spot Instances,
• Automated Provisioning: Businesses can optimize their cloud utilization by dynamically scaling resources depending on usage trends. Automating the provisioning of cloud resources eliminates the need for manual intervention and guarantees that resources are only used when needed, minimizing cloud expenses.   

Fundamentals of Cloud Cost Management 

Cloud cost management is the practice of managing and optimizing the costs associated with cloud computing services. This practice is an essential aspect as the benefits of cloud computing can get swiftly negated by unexpected expenses.  

Below are some fundamentals of cloud cost management: 

• Visibility on cloud inventory: To manage costs effectively it is imperative to have complete visibility of your cloud infrastructure and assets and includes knowing which all services are being used, who is using them and how much they are costing. 
• Cost analytics: This involves analyzing your all cloud costs over time to identify trends, patterns, and areas for optimization enabling to make informed decisions about cloud spending and allocate resources more effectively. 
• Role-based access: Implementing role-based access control helps in ensuring that only authorized personnel can access and make changes to your cloud resources. This is crucial and helps in preventing accidental or unauthorized changes that can lead to increased costs. 
• Automated alerts and notifications: Setting up automated alerts and notifications allows for receiving real-time alerts when your cloud usage or costs exceed a certain threshold and taking proactive steps to address potential cost overruns. 
• Controlled stack template: This can help in ensuring that all of your cloud resources are provisioned consistently and adhering to best practices. This further reduces the risk of mistakes that can lead to unexpected expenses. 
• Budget and auditing: Establishing a cloud budget with regular auditing of your cloud usage and costs help in identifying areas for optimization and preventing unexpected expenses. 
• Policy-based governance: Implementing policy-based governance allows you to enforce rules and guidelines around cloud usage and spending ensuring that all cloud resources are used in a way that aligns with your business goals and objectives. 

Advantages of Cloud Cost Optimization 

By adopting cloud cost optimization strategies and best practices businesses can optimise their cloud usage effectively and create a competitive advantage in today’s digital economy. Below are some of the tangible benefits of Cloud cost optimization.

• Decreased Costs: Adopting cloud cost optimization tactics and best practices can lower organisations cloud expenses dramatically. According to research by Flexera, 93% of organizations employing cloud services have reported average savings of 20% on their cloud expenses.   
• Better Performance: Performance can be increased with Cloud cost optimization by ensuring that resources are sufficiently provided to meet workload demands and by prioritizing key workloads and distributing resources based on consumption patterns resulting in enhanced application performance and reduced downtime. 
• Improved Scalability: Cloud cost optimization enables organisations to scale their cloud resources effectively by using automated provisioning and rightsizing solutions so that their cloud resources are only used when needed and also adapt resource distribution depending on consumption trends.