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Beyond Rightsizing: When It Comes to Cloud Cost Optimization, Think Big

Sure, rightsizing VM instances will save money, but there are other cloud cost optimization strategies that can bring you greater cloud savings and even save you time and technical effort.

How do you optimize your cloud spending bill?

The usual answer is to reduce cloud costs on a workload-by-workload basis. Cloud admins are advised to "rightsize" virtual machine instances or take advantage of discounted pricing for individual VMs, for example.

Those strategies will certainly save some money on your cloud bill. But they fall short of delivering all possible cost savings. To achieve true cost optimization in the cloud, you need to think bigger. Here's why.

Related: 5 Myths About Cloud Pricing

Conventional Best Practices for Cloud Cost Optimization

Traditional approaches to cost optimization typically take the form of practices like the following:

  • Rightsizing: Rightsizing means choosing the best cloud hosting configuration based on each workload's requirements. The goal is to avoid paying for resources that your workloads don't actually need.
  • Leveraging pricing discounts: Cloud vendors offer discounted pricing for some of their services if users accept certain caveats. For example, you can save money on cloud storage by using Amazon S3's Glacier storage classes, which cost less but are also less responsive than more expensive storage tiers.
  • Tracking workloads: By tracking what you have running in the cloud, you can find workloads or resources that are still running but shouldn't be.

By minimizing waste and improving cost-effectiveness, these practices can help reduce your costs for the specific cloud workloads that benefit from them.

An Aggressive Approach to Cloud Cost Optimization

On their own, however, traditional cloud cost optimization strategies deliver limited value. The main reason why is that they benefit only specific workloads, rather than providing savings that you can apply across your cloud — or at least across all workloads of a certain type.

Related: 6 Tips for Controlling Your Cloud Costs in a Recession

Rightsizing individual VM instances only saves you money on those instances, for example. Moving some data to a lower-cost, lower-performance storage tier doesn't save you money for data that you have to keep in a higher-priced tier.

That's why the key to real cost savings is to approach cloud cost optimization more aggressively by leveraging strategies such as:

  • Going multicloud: Adopting a multicloud architecture makes it possible to lower cloud spending across the board by taking advantage of lower-cost cloud services than you'd be able to access if you used a single cloud. Maybe one cloud provider has lower-cost VM hosting, for instance, while another provides lower-cost object storage. By using both clouds at the same time — one for VMs and the other for storage — you save money across all of your workloads within these categories.
  • Enterprise agreements: If you're a large business, you can save significant money by negotiating an enterprise agreement with your cloud provider (or providers). Enterprise agreements provide across-the-board pricing discounts to customers who consume cloud services at a high volume. They're another great way to slash your total spending.
  • Cloud startup credits: Smaller businesses can also lower their cloud costs by asking cloud providers for startup credits. Startup credits provide free or discounted access to cloud services. They're designed to provide a temporary boost to smaller companies that are new to the cloud, but startups can negotiate for extended startup credits.

Beyond the fact that these strategies reduce cloud spending across your entire environment, they offer the advantage of being relatively simple to implement. Practices such as rightsizing VM instances require a lot of work relative to the money they save you. In comparison, a strategy like obtaining startup credits is relatively simple to implement. You don't need any special technical tools or skills. You just need to ask your cloud provider for access to its startup program.

Conclusion: Think Ambitiously and Save Time and Money

Optimizing cloud spending on a workload-by-workload basis is not a bad thing. In fact, it's necessary if you want to lower your cloud bill as much as possible.

But in many cases, the biggest cloud savings opportunities lie beyond strategies like rightsizing or pricing discounts that are specific to individual workloads. Businesses need to think more ambitiously and take advantage of practices that allow them to slash spending across all cloud workloads, with less investment of time and technical effort than conventional approaches to cloud cost optimization.

About the author

Christopher Tozzi headshotChristopher Tozzi is a technology analyst with subject matter expertise in cloud computing, application development, open source software, virtualization, containers and more. He also lectures at a major university in the Albany, New York, area. His book, “For Fun and Profit: A History of the Free and Open Source Software Revolution,” was published by MIT Press.
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