In the last decade, the use of cloud services has experienced an extraordinary surge. According to research by Markets and Markets the global cloud market is projected to reach US$832.1 billion by 2025, growing at an annual rate of 17.5 percent. Although cloud computing offers advantages in flexibility and scalability, without proper management, costs can escalate rapidly.
In fact, according to a Forbes report, 61 percent of companies struggle to understand and control their cloud expenditures, with 30 percent admitting to wasting up to 30% of their cloud budget on unused resources.
This is why Cloud Cost Optimization is crucial. It’s not just about cutting costs but ensuring that every cloud expenditure delivers maximum value. With a structured approach—such as closely monitoring usage, leveraging automation, and choosing providers with transparent pricing—companies can save on their annual cloud spending. So, what is Cloud Cost Optimization? Here’s an explanation.
What is Cloud Cost Optimization?
Cloud Cost Optimization is a strategic process aimed at minimizing the costs associated with using cloud services while ensuring optimal performance, functionality, and scalability. Since cloud services are typically based on a pay-as-you-go model, where users pay according to the resources they use, costs can rise quickly without proper management.
Through cloud cost optimization, companies can achieve significant savings while enhancing operational efficiency. Utilizing automation features like auto-scaling and spot instance usage allows companies to remain flexible in managing infrastructure, especially during fluctuating demand.
Types of Cloud Computing That Can Implement Cloud Cost Optimization
Infrastructure as a Service (IaaS)
In the context of Cloud Cost Optimization, IaaS enables users to manage and optimize costs more flexibly. Users can shut down inactive instances, select smaller instances for lightweight tasks, or utilize reserved instances for long-term discounts. Moreover, using auto-scaling in IaaS helps adjust capacity automatically, ensuring resources are only used when needed, ultimately reducing costs.
Platform as a Service (PaaS)
PaaS allows developers to focus on application development while cloud providers manage aspects such as server capacity and scalability. To optimize costs, users can leverage features like automatic scaling, pay-as-you-go models, and choose service packages that fit their workload needs. Since PaaS tends to be more automated in resource management, companies can reduce operational costs associated with infrastructure management.
Software as a Service (SaaS)
SaaS enables companies to optimize software licensing and usage costs by only paying for the services they need. Companies can choose appropriate subscription packages, reduce costs on unused software, and take advantage of usage-based payments. By monitoring usage and managing SaaS subscriptions, companies can ensure they are not overspending on unnecessary features.
Why You Should Be Using Cloud Cost Optimization
By prioritizing Cloud Cost Optimization, companies can reduce unnecessary spending, enhance operational efficiency, and ensure more controlled and sustainable growth in cloud service usage. Here’s a complete explanation:
Cost Savings
One of the main reasons to prioritize Cloud Cost Optimization is to avoid overspending. Without proper cost management, cloud services operating on a pay-as-you-go model can quickly incur large expenses due to uncontrolled or inefficient resource usage.
Improving Operational Efficiency
Helps enhance operational efficiency by ensuring that infrastructure, platforms, or other cloud services operate according to actual needs. Optimally managing resources, such as using auto-scaling or reserved instances, ensures that systems remain responsive to demand without utilizing unnecessary resources.
Supporting Scalability and Growth
Ensures that companies can allocate resources to grow without worrying about uncontrolled cost increases. This gives companies the ability to innovate and adapt to changing market demands without having to make significant investments in physical infrastructure.
Transparency and Cost Control
Provides companies with greater visibility into cloud resource usage. With the right cost management tools, companies can track where the largest costs are coming from, identify opportunities for savings, and implement effective cost control policies.
Read More: Understanding Cloud Application Security and Its Business Benefits
4 Steps You Can Use to Implement Cloud Cost Optimization
1. Set a Budget
Setting a budget is a crucial first step in optimizing cloud costs. By establishing a clear budget, IT teams and financial managers can monitor spending and avoid wastage. Many cloud service providers like AWS and Akamai offer tools to set budgets and cost alerts, notifying users when expenditures approach or exceed set limits. This helps keep service usage in check and within the available budget.
2. Use the Right Storage Options
Choosing the appropriate storage options is key to reducing cloud costs. Cloud service providers offer various types of storage, such as block, file, or object storage, which can be optimized for different needs.
For example, high-performance storage may only be needed for frequently accessed data, while rarely used data can be stored in low-cost storage like cold storage or archive storage. By classifying and moving data according to access needs, companies can avoid paying for excess storage that is not required.
3. Build a Multicloud Strategy
Developing a multicloud strategy can help companies maximize the benefits of various cloud providers. By using more than one provider, organizations can compare and choose services that provide the best cost efficiency for specific tasks.
Multicloud also provides greater flexibility, allowing companies to shift workloads to cheaper providers or those offering larger discounts. This strategy not only enhances cost efficiency but also increases the resilience and flexibility of IT infrastructure.
4. Choose a Cloud Provider with Predictable Pricing
Selecting a cloud provider with predictable pricing helps companies avoid unexpected cost surprises. Some cloud providers have complex pricing models with hidden fees for bandwidth, storage, or specific services. In contrast, providers with transparent and predictable pricing, such as Akamai with predictable pricing or AWS with reserved instances, help companies plan their cloud spending more accurately. This allows for better budgeting projections and avoids unexpected cost overruns.
How CDT Can Help You Reduce Cloud Costs
Central Data Technology (CDT) provides a range of tools and services that help organizations effectively manage and optimize their cloud spending. With deep insights into usage patterns, custom budget creation, and competitive pricing models, CDT ensures you only pay for what you truly need. Here are some Cloud Cost Optimization solutions you can use:
AWS Cost Explorer
AWS Cost Explorer is an advanced tool that enables users to visualize and analyze their cloud costs through customized views and reports. This tool helps identify spending patterns over various time frames—daily, monthly, or even yearly—making it easier to find anomalies or trends in AWS usage.
Key Benefit: AWS Cost Explorer allows filtering and grouping costs down to granular levels, projecting future usage, and accessing data at an hourly resource level. With these detailed insights, companies can make more informed decisions to cut unnecessary costs and maximize their cloud investments.
AWS Budgets
AWS Budgets allows users to set specific budgets and receive alerts when spending approaches or exceeds the set limits. You can create daily, weekly, or monthly budget reports to monitor cloud spending in real-time.
Key Benefit: AWS Budgets allows for automated actions based on set thresholds, enabling businesses not only to monitor but also to control their cloud spending by stopping unused services. This proactive approach ensures costs remain within the defined budget limits, avoiding surprises at the end of the billing cycle.
Akamai Predictable Pricing
Akamai offers simple and transparent pricing, which is more competitive than major cloud providers like Google and Azure, without compromising performance or security.
Key Benefit: kamai’s pricing includes free add-ons such as DDoS protection, 99.99% computing uptime SLA, and 24/7 customer support, providing the best price-to-performance ratio in the market. With Akamai Linode, you can benefit from free egress bandwidth transfers ranging from 1TB to 20TB. After reaching this limit, you’ll only be charged U$0.015 per GB for egress bandwidth. This makes Akamai a smart choice for businesses seeking cost efficiency and reliability, especially in multicloud environments where consistent pricing is crucial.
It’s Time to Streamline Your Company’s Cloud Costs with CDT!
Now is the time to streamline cloud spending through solutions from AWS and Akamai that offer clarity, predictability, and full control over your cloud usage. As an authorized partner of these leading brands, the IT team at Central Data Technology (CDT) will guide you through the consultation, implementation, maintenance, and after-sales support process.
Get your solution now by contacting CDT at this link
Author: Ary Adianto
Content Writer CTI Group
