Cloud Cost Management is the concept of efficiently managing your cloud expenses. It usually involves understanding the costs associated with your cloud and eliminating those that are unnecessary. When it comes to cost management, there are no shortcuts. You must make proper plans, get the basics correct, and involve your teams so they understand the importance of the situation. Cloud cost management has become an important topic for cloud providers these days, and has become the new requirement for any software company.
In 2020, Gartner predicted that the public cloud market would grow to $257.9B for the year and the companies were projected to collectively waste $90.8B in public cloud spend. Public cloud providers aren’t likely to complain, but engineers and company finances most certainly are. Cloud providers such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP) are becoming a larger part of our IT budget.
Gartner also suggested in a recent press release that the cloud market will reach 14% of total global enterprise IT expenditures by 2024, up from 9% in 2020.
These figures are far from insignificant, and you should take note if you haven’t already. Companies that spend billions on the cloud must manage costs effectively. However, this is exactly the opposite of what is currently taking place.
We end up wasting roughly 35% of all cloud spending each year. The rate is concerning, for a variety of reasons. However, most businesses appear to be failing at cloud cost optimization. Some of them waste money by overprovisioning, others get the wrong instance size, and the rest forget to turn off their VMs when they are not in use.
Cloud cost management tools help the DevOps, Infrastructure, Engineering, and Finance teams get deep visibility into cloud resources utilization and its costs. These tools are required to plan, analyze, understand, and reduce spending in order to maximize cloud investments. They also help in identifying various cost optimization opportunities, thereby maximizing the business value of cloud use. Given the growing trend of organizations adopting cloud-based technologies, it is important to begin optimizing your cloud resources and developing cloud cost optimization strategies.
At Harness, we’ve found that cloud cost management tools primarily serve the following use cases:
Cloud Cost Optimization: Organizations regularly spend too much with their cloud providers and they want to bring down costs to pay only for what they need/use. They need to optimize cloud-related costs.
Cloud Cost Transparency: There should be visibility of cloud costs across every layer of the organization, from executives to developers. All stakeholders should be able to understand cloud costs in the context that is relevant to them.
Cloud Cost Governance: There should be guardrails put in place around cloud costs, essentially creating processes that ensure costs stay under control.
Harness’ Cloud Cost Management tool, CloudCheckr, CloudZero, Spot, and others are available to help you optimize cloud costs and reduce cloud spend.
Reducing cost isn’t a one-time event. Engineering and finance need constant feedback to innovate and change. Hence, cloud cost management.
In this blog, you’ll learn about best practices for cloud cost optimization, which will help you reduce your overall cloud bill and save money on cloud costs.
Cloud Cost Management Best Practices
You can use the cloud cost management best practices outlined below to develop a cloud cost optimization strategy that links costs to specific business activities, allowing you to see who, what, why, and how your cloud budget is being spent.
Rightsize or Resize Underutilized Resources
One of the most impactful ways to reduce spend on your cloud infrastructure is to make sure your clusters are optimally sized. Find the utilization of your resources with tools like Azure Advisor and Harness CCM—and get recommendations on how to reduce your cloud spend by resizing or rightsizing your resources.
Harness’ CCM analyzes your configurations and provides actionable recommendations to help you optimize your cluster resources for performance and cost. Implementing recommendations can potentially help you optimize costs and reduce your cloud bills. It can also recommend changes across instance families. Rightsizing does more than just reduce cloud costs; it also aids in cloud optimization, which means getting the most out of the resources you pay for.
Take Advantage of Spot Instances
Spot Instances are not the same as RIs, but they can help you save more money on your AWS or Azure spend. Harness’ AutoStopping Rules can automatically shut down idle VMs and containers, and dynamically run them on spot instances with no interruptions, reducing costs by up to 75%.
Shut Down Unused Resources
You can detect idle, unallocated, and underutilized virtual machines/resources using a cloud management platform/tool. Idle resources are those that were previously running and are now left on, increasing costs. Unallocated or underutilized virtual machines (VMs) were purchased but never used.
You don’t pay for what you use with any cloud platform; you pay for what you order or buy. Clearing out resources that you no longer require can significantly reduce your cloud bill.
Harness CCM helps you analyze the cost of your idle and unallocated resources, giving you a sneak peek at your cloud usage. You can also filter details in Harness based on your cloud environment. Once you’ve identified the idle resources, you can reduce cloud costs by shutting them down.
Configure AutoStopping Rules
Harness provides a unique cloud cost intelligence feature that can automatically shut down idle VMs and containers, and dynamically run them on spot instances with no interruptions, reducing costs by up to 75%. You can achieve this by configuring AutoStopping Rules for your cloud resources.
AutoStopping Rules are a dynamic and powerful resource orchestrator for non-production workloads. The following are some of the most significant advantages of incorporating AutoStopping Rules into your cloud resources:
- Automatically detect idle times and shut down (on-demand) or terminate (spot) resources.
- Enable running the workloads on fully orchestrated spot instances without worrying about spot interruptions.
- Predict idle times statically, especially during work hours.
- Allow the accessing of stopped or terminated machines, which is impossible with forceful shutdowns.
- Stop cloud resources without computing optimization, only start/stop actions.
Detect Cloud Cost Anomalies
Cloud cost anomaly detection can be used as a tool to keep cloud costs under control. Cost anomaly detection points you to what you should be paying attention to in order to keep your cloud costs under control (save money). Whenever there is a significant increase in your cloud cost, an alert is triggered. This helps you keep track of potential waste and unexpected charges. It also keeps an account of the recurring events (seasonalities) that happen on a daily, weekly, or monthly basis.
Configure Fixed Schedule for Uptime or Downtime
Configure fixed uptime and downtime schedules for your resources. For example, you might want your specific resources to be unavailable from Friday 5 pm to Monday 9 am. You can specify downtime for the selected resources for that period. During this time, your specified services will be unavailable, allowing you to reduce costs. This can also come in handy when multiple teams are utilizing/using the same resources.
Take Advantage of AWS Reserved Instances (RIs) and Azure Reserved Virtual Machine Instances
Enterprises that intend to use the cloud in the long run should invest in reserved instances. These are more substantial discounts based on upfront payment and time commitment. RI savings can reach up to 75%, making this kind of a must-have for cloud cost optimization. Because RIs can be purchased for one or three years, it is critical to analyze your past usage and properly plan for the future.
Amazon EC2 Reserved Instances (RI) provide a significant discount (up to 72%) compared to On-Demand pricing and provide a capacity reservation when used in a specific Availability Zone. Reserved Instances are not physical instances, but rather a billing discount applied to the use of On-Demand Instances in your account. These On-Demand Instances must match certain attributes, such as Instance Type and Region, in order to benefit from the billing discount. Savings Plans also offer significant savings on your Amazon EC2 costs compared to On-Demand Instance pricing. With Savings Plans, you make a commitment to a consistent usage amount, measured in USD per hour. This provides you with the flexibility to use the instance configurations that best meet your needs and continue to save money, instead of making a commitment to a specific instance configuration.
Azure Reserved Virtual Machine Instances significantly reduce costs—up to 72% compared to pay-as-you-go prices—with one-year or three-year terms on Windows and Linux VMs. When you combine the cost savings gained from Azure RIs with the added value of the Azure Hybrid Benefit, you can save up to 80%.
Set Up Budgets and Configure Thresholds for Teams and Projects
Create custom budgets and receive notifications when your costs exceed (or are expected to exceed) your budget. You can also set a threshold for the percentage of budget based on the actual cost or forecasted cost.
Setting budgets and thresholds for different teams and business units can aid in the elimination of a significant amount of cloud waste.
Form a Cloud Center of Excellence Team
A Cloud Center of Excellence (CCoE) is a team of executives (CFO, CTO), IT Manager, Operations Manager, System Architect, Application Developer, Network Engineer, and Database Engineer. This team can help you identify the areas for cloud cost optimization. The CCoE team can also assist you in determining which cloud provider is best suited to your needs, the type of cloud services required, cloud capacity, cloud environments, and so on. All of these factors could play a significant role in controlling costs.
Make Timely Cost Decisions With Real-Time Data
Having visibility into the right cloud resource utilization data can have a significant impact on cloud spending. Tools like AWS Cost Explorer, Azure Cost Management, Apptio Cloudability, and Harness Cloud Cost Management (CCM) allow you to view, understand, and analyze your cloud costs in a simple and intuitive interface. Using Harness Perspectives, you can add business context to all of this data. Perspectives enable you to group your resources in ways that are more relevant to your business needs, allowing you to make more informed decisions.
“Cloud Cost Impact” Culture
Every major feature design should include a checkbox for Cloud Cost Impact. Over time, this fosters a mindset and culture among application developers and the cross-functional team that costs are simply another boundary condition to be optimized for.
We hope these cloud cost management best practices help you ask some difficult questions. Are you using the right cloud cost management tools to gain visibility into your cloud costs and optimize your cloud resources? Are you being reactive to cloud costs?
Your team can be proactive and mitigate any cost spikes using Harness Cloud Cost Management. Harness CCM is designed to bring cloud cost analysis and management into the hands of the engineers consuming cloud resources. Read the docs to understand more about its capabilities and offerings.
Want to see Harness Cloud Cost Management in action? Request a demo, and a Harness specialist will get you started with Harness Cloud Cost Management. Alternatively, read this article on the best CCM tools to find the right one for you.