How to cut costs by reducing cloud inflation

Add that to the general increase in spending on cloud computing. for example, Synergy research We discovered that spending on enterprise cloud computing infrastructure jumped from $100 billion to $130 billion between 2019 and 2020. Count it all, and it’s easy to see how a CIO can get stunned when looking at cloud infrastructure bills.

Inflation is not the only factor

What drives the rate increase? Inflation, including rising energy prices affecting everything from energy to transportation, is just one factor. supply chain problems Another example: Taiwanese microchip manufacturers, which supply the vast majority of the hardware parts that drive cloud infrastructure services, still struggle with supply chain issues that began when those factories closed at the height of the pandemic.

Yes, the same semiconductor shortage that is increasing the cost of everything from cars to hardware is also affecting the cloud infrastructure industry. Due to the fact that The share of Taiwanese companies is 66 percent In chip manufacturers around the world, supply line delays have a great impact on hardware prices.

Also during the pandemic, the demand for cloud infrastructure services has skyrocketed, with Spending increased by 19 percent in 2021 aloneAccording to Gartner, given the demand caused by remote work, online learning, and other sudden changes in the way business gets done — changes that never end.

Dive deeper: Learn how cloud security posture management tools can help secure your cloud services.

Businesses need more efficient cloud computing

Beneath the surface of the growth in cloud usage over the past few years is a huge amount of waste. in 2022 Cloud State Report Flexera notes that organizations say they wasted 32 percent of the money they spent on cloud infrastructure.

Cloud waste mainly comes from overestimating the cloud resources needed by a particular project. Cloud hangovers include issues such as planning for too long of a timeframe for a particular cloud-focused project, over-provisioning of resources, and a general lack of maintenance and optimization, especially for data and projects that no longer need active storage or those that use a lot of CPU capacity.

How to reduce cloud costs

There are a few key things you can look at to reduce your cloud costs:

  • Improve cloud purchasing between groups. ExpediaThe VP of Development and Drivers found that every company in its portfolio had purchased its own cloud-based development platform. By standardizing on a single platform during the pandemic, the company has seen cost cuts significantly.
  • Choose the right type of resource for your needs. Major cloud platforms offer “reserved” or “instant” options, which allow companies to purchase a certain amount of compute instances at discounts of up to 90 percent over on-demand instances. For workloads that can be interrupted and require server instances for a certain amount of time, if you can work with the configuration standards for those instances, there can be significant savings.

Read more: Find out why cloud security is critical to your business results.

  • Find and remove unused resources. If a temporary server instance was created for a project and was never removed, or if cloud storage was used for a project but was never deleted with the project ending, now is the time to get rid of them.
  • Use cloud providers’ tools to prevent overprovisioning. In the days of the data center, server administrators often plan to increase hardware footprint to meet peak demands and anticipate growth. But with tools like automatic scaling, load balancing, and more, cloud service providers can help organizations respond to requests while preventing low usage of server instances and storage.
  • The needs of the current project in the appropriate size. All major cloud providers offer sizing tools to help IT managers decide whether to switch cloud configurations to improve usability and utilization. Given all the configurations offered, correct sizing is not for the faint of heart. But increasing utilization while reducing costs is a major motivating factor to try.

The benefits of cloud are undeniable, but being cheaper than on-premises technology is not necessarily one of them. As companies move more workloads to the cloud, and as cloud computing costs rise, it is critical that technology leaders monitor their total spend and make adjustments as necessary.

Leave a Comment