opinions expressed by Entrepreneur Contributors are their own.
There is a misconception that being “in the cloud” automatically means you save money. In fact, one of the most important initiatives many companies want to achieve in 2022 is to reduce cloud costs. A State of the Cloud report carried out in 2021 by flexera reveals that 61% of companies have plans to optimize their cloud costs.
“Participants gave their own estimates of what their organization wasted. 30% of cloud spend,” Flexera added. As a result, such companies find it difficult to optimize their cloud costs effectively.
Actually, a McKinsey report “About 80% of businesses see managing their cloud spend as a challenge,” he says. But what is the main cause of this problem? Read on to discover the most important cloud cost optimization issues and learn how to solve them.
Related: The New Normal Will Be Permanent: Businesses Will Only Grow in the Cloud
Types of cloud computing services
Containers as a service: This type of service enables easy, scalable, and secure management of containerized applications from an enterprise.
Platform as a service: It is a platform-based cloud computing service that allows organizations to easily build, run and manage applications.
Multicloud as a service: It includes using cloud computing services from various cloud services, platforms or software.
Functions as a service: This cloud service lets you code to respond to events without using a complex infrastructure.
FinOps as a service: A cloud service that creates a culture of accountability in an organization’s cloud services.
Related: Cloud Technology: The Way for Large Businesses to Increase Productivity
Bare metal and cloud servers
A bare metal server, also known as a physical or dedicated server, is installed in a controlled and highly regulated environment. In contrast, the hardware resources of the cloud server are shared with other companies.
While both types of servers have the same amount of core speed, bare metal servers will dwarf shared servers due to their physical and direct access to compute resources.
A shared server uses a block of network attached (shared) storage, while bare metal servers use its own local storage. But all of them can use HDD and flash based or SDD storage.
A bare metal server is more expensive than a shared cloud server when it comes to cost because a bare metal server user has to pay for free hardware resources as it is only allocated to support specific users.
Below, I’ll discuss the top five cloud cost optimization issues to avoid and how to tackle them:
1. Convince with savings plans, startup loans and reservations
Organizations prefer reservation or savings plans because of their impressive discounts compared to those listed in the on-demand pricing model. While this may seem like a great upfront deal for your cloud spending, you may have to commit to discounts for a few more years. This jeopardizes your cloud cost reduction goals. At the other end of the spectrum, most public clouds offer free loans to startups knowing that they will more than make up for the loan in long-term use.
The best option is to avoid reservations and savings plans. Additionally, don’t pre-buy resources and instead opt for approaches such as:
Overprovisioning involves choosing more resources than you really need to streamline your business’s workloads. It leads to cloud cost waste and uncontrollable but unnecessary expenses. Investing in custom monitoring, cost management solutions, and right sizing can help reduce reliance on overprovisioned resources to save cloud spend.
3. Inefficient management of demand increases and decreases
You can implement cloud cost management solutions, such as automation, to help you monitor and better deal with your cloud spend.
4. Delayed implementation of automatic cloud optimization
Cloud automation quickly the new norm of the tech industry. Businesses need to configure virtual machines, choose the right resources, create clusters, etc. It helps to reduce the manual effort required for
According to this McKinsey’s report“Fear of replacing artificial intelligence is widespread among workers.” But automation, freedom to choose application types and sizes, better management of demand spikes and dips, reduction of unnecessary expenditure, etc. provides many benefits such as
You will miss out on these benefits by delaying cloud automation. The best solution is to overcome your resistance to change and adopt automated cloud cost optimization.
5. Don’t miss out on the opportunities offered by Spot instances
Cloud service vendors provide spot instances for a certain period of time. You never know how long these offers will last. They can also give you a short notice of 30 seconds to 2 minutes and you don’t have enough time to react. Cloud automation can help you leverage instant samples even when you are unavailable.
Result: New market to solve the problem — Intelligent Workloads as a Service
Intelligent Workloads as a Service (IWaaS) is a new way of solving the problem using bare metal performance along with predictive and reactive analytics to stop overprovisioning and incredibly cost-effective multicloud computing. It gives your business the chance to enjoy smooth performance with up to 60% increase. Dave Wattel, CEO of a company artificial intelligence software company recognized this need for greater transparency in their companies and cloud spending was instrumental in addressing these pain points and also becoming a leader in IWaaS.
You’ll also enjoy increased developer productivity by reducing the repetitive tasks associated with traditional clouds.
Related: Demanding Change: Four Steps to Enable Cloud Transformation in Your Business