Adopting a Cost Optimisation Approach for the Cloud

By Muggie van Staden, MD and CEO of Obsidian Systems

Cost optimisation is the continuous discipline of controlling spending and driving cost reduction while maximising business value. For its part, IT cost optimisation entails continually evaluating and configuring all the cloud resources that drive the applications, infrastructures, and workloads of an organisation. While many see the former as a business function and the latter as a technology one, the two are inextricably linked in today’s digital world.

Cloud computing has simplified the process for a company to access self-service features and spin up instances to test, innovate, and create great IT solutions. However, this can result in underutilised provisioning. As the name suggests, this under-provisioning sees the organisation allocating fewer resources than required. This must be avoided otherwise the service cannot provide users with a quality experience. Effectively, under-provisioning can lead to underperforming applications.

Contrary to under-provisioning more often than not, does the ease of building capacity lead to over-provisioning services. There may not be a risk technically, and the immediate effect will only be visible at the end of your billing period. Overspending in today’s economic times cannot be taken lightly.

This is why elasticity has become the buzzword it is today. Cloud elasticity is the ability to gain or reduce computing resources on demand without causing production system performance disruptions. It is one of the things that make the cloud platform exciting. But it can also quickly become the stuff of nightmares as teams start taking advantage of the sheer amount and variety of services at their disposal regardless of the cost impact.

Hidden cost considerations

The best way to describe the hidden costs of public cloud cost management is to equate it to selling and moving into a new home. One has an idea of a budget. But then you quickly realise there is a cost component associated with every step. Packing up and boxing all your worldly belongings and moving it somewhere can be expensive. You suddenly realise there are consulting fees, legal fees, moving companies, the list goes on. One must either acquire a whole new set of skills or hire experts to assist.

When it comes to the public cloud, the unknown risk is that when a business does not monitor things continuously and correct errors in computing, storage, and unnecessary on-demand instances, expenses can quickly spiral out of control. Once the business is stuck in this loop, cloud spend can become like a runaway train and nearly impossible to stop.

Unnecessary expenses

Adding to the complexity of the cloud environment is how an unseen mistake or a misconfiguration can result in sprawling costs. And then to try and pinpoint what the problem is becomes a challenge in itself.

Invariably, the cloud becomes the great unknown with decision-makers never quite knowing what they will be billed for at the end of every month. Automation, compliance, and checkpoints become crucial components to include in a cloud strategy to mitigate against the risk of bill shock.

Of course, trying to be on top of everything is a challenging prospect. This is why setting limits and controls to manage all aspects of the cloud using a continuous cost analysis automation tool is a critical business enabler. Being able to track everything an organisation does in the cloud using an alert-based system is vital.

Public cloud cost management best practices include budgeting and setting limit triggers. Having observability across all services that are being used to ensure compliance becomes key. Only through this, can an organisation ensure cloud cost optimisation.