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Cloud Cost Optimization: Planning Tips for Cost Efficiency & Superior Performance

What is Cloud Cost Optimization?

Briefly defined, cloud cost optimization is the art of fine-tuning your cloud usage to yield maximum performance with the leanest amount of resources. For the novice cloud manager, this practice might sound strikingly similar to cloud cost management. Even seasoned cloud specialists might find the line between cloud cost optimization and cloud cost management is a bit blurry. For that reason, the first crucial step for effective cloud cost optimization is understanding the differences between cost optimization and cost management. 

Cloud cost management is the process of reducing or eliminating costs in your cloud usage, usually with an aim to save on operational costs, while maintaining your product or feature’s current level of performance. When we undertake cost management activities, our central question is: how can I do what I am doing for less money? Cloud cost management initiatives will usually be handed down from a company’s financial team, and the cost-cutting will usually be performed by a cloud engineer who understands the bare-bones requirements for the product’s performance. The activities usually aim to cut costs by terminating unused resources by investigating unattached disks and storage lifecycles, and implementing right sizing and tagging.

Cloud cost optimization, on the other hand, is a process that asks an entirely different question: what is the optimal cloud configuration needed for my organization to meet its KPIs and technology performance goals? The aim of cloud cost optimization is not merely to slash operational costs, but to create synergy between an organization’s technology resources and business goals in light of their current and projected revenues. Whereas cost management can be handled by the technology team alone, cost optimization is a more comprehensive process that involves multiple stakeholders in the creation of a cloud roadmap that will support a company’s long-term goals. From the business perspective, cloud cost management is about reducing costs, whereas cloud cost optimization focuses on yielding maximum ROI. This, necessarily, requires more comprehensive and complex planning schemes. 


Best Practices for Effective Cloud Cost Optimization

When it comes to cloud cost optimization, the old adage, “If you fail to plan, you plan to fail” are words to live by. Using these proactive planning and optimization strategies can create significant impact in ensuring your cloud costs are optimized not only for cost efficiency, but for growth.

  1. Define your goals. All stakeholders from your business and product development teams should have a clear understanding of the organization’s short and long term goals, and work together to understand the cloud resources it will require to get there. 
  2. Determine your measurements for success. There are a variety of metrics that can be used to measure your progress. Ask, what defines success for your organization? Is it an increase in page hits or active users? Do you measure your margins by profitable cost per developer ratios or by page load times? Measurements can vary according to the specific KPI, but understanding how you will measure your success is crucial to how you will optimize the cloud to achieve them. 
  3. Evaluate your current resources. With your goals and measurements in clear view, the technical work of cloud cost optimization can begin. Here, you will need to survey each element that supports your product’s functionality, and its impact on costs within the cloud (and in general). Take a deep dive into every part of your product, from the legacy architecture, to the libraries your developers utilize, to the individual CI flows you’ve designed in your cloud to determine the true cost of every function. At this stage, involving a cloud architect can be critical in identifying ways to implement savings and promote growth. Reach out to your cloud provider for information on how migrating to newer cloud management versions can impact performance and cost. 
  4. Leverage cloud features to reach your goals. Whether you are working in AWS or Azure, there are countless features and automation flows to keep your cost optimization on track. Managed cloud services, like those we offer at 2bcloud, can be instrumental in guiding the ongoing process of cost optimization, which should be in a state of constant evaluation. Managed services can help you stay up to date on changes in your cloud providers environment, offer in-depth quarterly analysis that looks at the efficacy of your cloud investments, and help you seize opportunities to increase performance through technology upgrades or alternative feature utilization. 


If you’re looking for a deep dive into best practices for cloud optimization from the technician’s perspective, tune into the 2bcloud webinar below. You can also contact us to have a certified cloud architect help you tailor a plan to leap toward your KPIs through cloud cost optimization for AWS and Azure.