Optimise your cloud spend with these 4 tactics and metrics

by Ned Hallett
Published on March 2020

Everyone wants to optimise their public cloud (AWS/Azure) spend, but if you’re with the wrong partner, this isn’t as easy as it should be. Quite often the skills, knowledge and incentive are not there.

Many legacy hosting partners – that’s businesses who started out selling space in data centres who’ve had to pick up cloud technology to keep up with the market – still have a philosophy meaning the more you spend on the cloud services the more you pay them, meaning incentivised to increase their clients’ spend.

The reason for this is twofold: without a proper grounding in the skills and technologies underpinning cloud, many of these legacy partners simply don’t know how to deliver comprehensive cloud cost optimisation strategy in today’s landscape.

Many are experienced working with their own technology, but when it comes AWS or Azure, the skills simply aren’t there.

Secondly, because many of them work on a percentage-of-spend billing model, they’re incentivised to increase the size (and cost) of their clients’ environments rather than find the most cost-effective models.

These two problems combined mean many are paying far in excess of what they should for cloud.

What to do about it?

Moving to a cloud-native hosting partner like Just After Midnight can fix both these problems.

For one, we offer a fixed-rate pricing model: a flat fee every month over an agreed period. This means we can focus on driving down your costs without it affecting our bottom line, which is a much healthier basis for a partnership. 

For two, a cloud-native hosting partner will actually have the skills and culture in place to deliver a real cloud cost optimisation strategy: 

  • Advanced knowledge and certification in AWS, Azure and GCP
  • A commitment to a framework like AWS’s well-architected program, which contextualises cost optimisation within broader cloud best practices
  • A culture that focuses on innovation and using the most up-to-date solutions and tools
  • A broad understanding of how to track the effectiveness of the strategy with the right metrics – ensuring your cost savings aren’t coming at the expense of anything else

Of course, a cloud cost optimisation strategy will comprise many tactics and metrics, but below are four key tactics and metrics which no strategy should be without.

Top 4 cloud cost optimisation tactics 

1. Financial spend 

Often, inexperienced devs, whether they be from an in-house technical team or a legacy hosting partner, will leave Moneyunused resources ‘on’, meaning they appear on your monthly bill. This might be a temporary server which the admin has spun up and then forgotten about or storage attached to an instance which has since been removed.

One of the best strategies for easily driving down costs is to simply stop this kind of wastage, which unfortunately is all too common.

To do this, we use auto-parking tools like ParkMyCloud or AWS Instance Scheduler to easily pinpoint underused resources and automate the spin-up and spin-down process.

2. Right-sizing 

With all the variations of instance – and there are a lot – choosing the right one for the job is virtually impossible for the layman. Right-sizing tools analyse needs and make recommendations on the best fit. This not only optimises cost but performance too, by matching the most appropriate instance type to the job at hand. 

This is a further example of how cost shouldn’t be considered in isolation: it’s a part of a broader context of best practice.

3. Heat mapping 

Heat maps allow for a clearer picture of patterns of consumption, essentially highlighting peaks and troughs in World mapcompute use. These can be used in conjunction with automation to schedule the start-up and shut-down of instances as per requirement. Meaning you’ll save money on running unnecessary instances when there’s no demand. 

4. Taking advantage of the latest pricing plans and offers 

There are a lot of pricing options available when it comes to cloud, with AWS leading the way in terms of offerings around reservation and savings plans. But unless you’re in the know, these can be hard to take advantage of. 

A cloud-native hosting partner will be able to make the select the best model, or combination of models, whether that be reserved instances, in which you commit to a certain amount of compute, a savings plan, in which you commit to a certain dollar spend – or exploring spot instances, in which you bid for spare compute at huge discounts.

Top 4 cloud cost optimisation metrics

1. Financial spend 

This one isn’t complicated. Whether you’re working with a partner or attempting a cost reduction strategy by yourself, your overall spend on cloud is, of course, a key metric.

2. How fast things are responding (and other performance metrics) 

As stated, a good cloud optimisation strategy takes into account more than just cost. Anyone could reduce cost by cutting the necessary resources. The trick is for performance to remain constant (or as it will in many cases to actually improve) while costs go down.

3. Redundancy

Again, it would be easy to reduce financial spend by taking away resources from redundancy. As with the previous metric, the idea is that your ability to deal with issues isn’t impacted by your financial spend reduction.

4. Cloud spend vs non-cloud  

Another great way to judge the efficiency of your strategy is to compare it to an on-premises solution. This is more of a sense-checking practice meant to ensure you’ve made the right decision by moving to cloud. In 9 out of 10 cases, you will have done, but it pays to check.

The takeaways  

  • Many businesses are stuck in partnerships with legacy hosting providers. These companies don’t have the skills in place to deliver a cost optimisation strategy, and in many cases, their pricing models incentivise them against doing so.
  • Cloud-native hosting partners like Just After Midnight have the skills and culture in place – and offer pricing models which work to mutual benefit provider and client.
  • A cloud-native hosting partner might employ many tactics as part of a cost optimisation strategy, such as auto-parking, right-sizing and more.
  • There’s more than just financial spend to think about in terms of cloud cost optimisation metrics: it’s important that your strategy doesn’t compromise other aspects of your solution.

To find out how much you could save, get in touch.

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