Tools and Tactics for Managing Costs: How to Nail Your Strategy Once and For All

After surveying 100 CIOs and CTOs, we found that cost saving is one of the main drivers of cloud migration. Yet, 32% of organizations claim that once their business matures and scales, their cloud ROI tends to decline or plateau. In fact, 68% of IT decision makers say that their cloud infrastructure has become more expensive in the past year. 

How does this occur?

More growth means more people, more cloud resources, and more data. It’s difficult to take accountability for all the resources and storage your environment requires, especially when it’s unclear who created each resource, for what purpose, and whether or not it’s still needed. Predicting what you’ll need in advance also becomes problematic as you grow, leading to a tendency to over-provision storage and compute resources. 

These are expensive mistakes that can cost businesses millions of dollars.

AWS shares five best-practices for managing the costs of cloud architecture. If you’re missing even one or two of these, you can easily see that reflected on your monthly cloud bill: 

Cloud Financial Management– The cloud’s dynamic nature makes keeping track of costs difficult without the right processes and procedures in place. Developing a FinOps team, identifying key cloud stakeholders, implementing governance processes, and putting a CFM tool in place for managing Reserved Instances or Auto Scaling, will go a long way to ensure cloud costs are being tracked and managed properly. 

Expenditure and usage visibility- The flexibility of the cloud enables various teams across the organization to utilize cloud services simultaneously, making it difficult to gain holistic real-time visibility into usage. Poor integration between cloud systems, and a lack of alignment between the cloud tools and technologies that teams deploy often results in duplication of data, efforts, and spending across multiple teams. Tagging resources, setting up monitoring tools, and using tools like AWS Cost Explorer can help provide more visibility. 

Cost Effective Resources- AWS offers a variety of cost efficient pricing models to help their customers get more bang for their buck. Reserved Instances offer up to 70% in discounts off on-demand EC2 usage, Saving Plans offer a smaller discount but provide greater flexibility if you want to make changes to EC2 commitments, and Spot Instances can provide up to 90% in discounts, but only work for short-term usage in limited circumstances. You also might want to consider your options for reduced redundancy storage. You can find more information  on each of these pricing models in this AWS cost optimization guide.