Cloud Cost Optimization: Principles for Lasting Success

Aws Cost Optimization

AWS cost optimization lets users cut down costs at the same time as optimizing the speed. It involves building innovative and measurable applications to meet the needs at hand. It is the easiest way to manage costs while managing peak performance.

Like most aspects of technology today, the standards are as good as only how well people follow them. The limiting factor is often not the efficiency of the technology. But it is the kinds of processes and people involved in it. Aspects like project leads, SRE’s, finance, and executive teams all play a vital role in cost-optimization.

First, all the stakeholders involved should come up with a set of new standards for the business. This outcome should meet the desired profitability, performance, and reliability goals. It is a sound choice to seek the help of a professional team. 

How To Make Use Of The Heightened Cost Visibility

One of the benefits of a cloud environment is its enhanced visibility. It can give valuable insight into one’s utilization data. Each service is tracked, and one can measure it independently. This effect has both pros and cons. Because now there are thousands of SKUs.

It may not be beneficial if one does not know who is purchasing their services and why. It is hard to figure out the TCO- Total Cost of Ownership for the services and applications in the cloud. These problems are a common occurrence when the shift from CapEx type to OpEx model happens.

In the earlier days, a centralized finance team would set the static budget. Later they proceed to procure the necessary resources. Usually, forecasting was built on metrics like historical growth, which helped envision the upcoming quarter or year’s expected needs. Purchases were not made until everyone in the company had the opportunity to weigh whether or not it was necessary.

Today in an OpEx environment, the engineering team spins up resources as required to run the services optimally. For many cloud customers, it is a hard thing to imagine engineering acting without standardized guardrails.

It all happens without setting the budgets or appropriate resource allocation. There is also no way to view costs from a finance perspective. Although it encourages velocity, it is not a good starting point to efficiently design a cost-to-value formula for a service. It would be the value created by the service with lesser optimized spending.

The Reasons For Non-Optimization

Users struggle to evaluate the developmental costs versus production projects mainly due to a lack of labeling practices. In certain other cases, the engineers over-provision to prevent performance issues which causes considerable overhead expenses during the non-peak times. This situation leads to a wastage of resources in the future.

It is integral to create a company-wide set of standards for the kind of resources available. It is also crucial to determine when they should be deployed. These steps are vital to optimize the costs.

Unfortunately, one of the most attractive features of the cloud, its elasticity, is viewed as an issue for many reasons. When there is an unforeseen increase in the bill, some users see that cause for concern. Unless it is due to business metrics like the number of transactions or users served, one will miss the context to interpret their cloud bill accurately.

For many users, it is easier to view the rising costs and attribute them to specific business groups. But they do not have the correct context to give helpful recommendations to project owners. The team may be facing an increase in costs due to the spike in the number of customers, which would be a good thing.

In contrast, it could also be because an unnecessary high-CPU or VM was running over the weekend, pushing unneeded traffic to the United States of America.

One of the ways to fix this issue is to structure and organize the costs. It is helpful to drill down into each service by using a Cloud billing report, which gives the view of the costs at a glance. One can also get a closer view of costs by assigning the costs back to teams or departments using labels. Or by designing a personal custom dashboard. 

Conclusion –

The end goal of designing a complex cloud system is not merely cost-cutting. Consider the example of fitness training. Losing weight is not the only goal. The end goal is to be fit and healthy. Similarly, in the case of AWS cost optimization, the objective needs to be determined. It is to identify wastage and find ways to ensure that the value of every dollar is maximized.

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