Cloud cost optimization usually isn’t something companies are thinking about with any specificity. Their costs will find optimization in cloud. That’s the whole point of moving in the first place, right?

Yes, cloud transformation is a great way to make your infrastructure more cost-efficient. But if you just pick up what you have and put it in the cloud without a plan in place, you’re not going to like the monthly bills.

As an Amazon Advanced Consulting Partner, we spend a lot of time on cloud cost optimization. The way we approach cost optimization problems, however, applies to almost any cloud environment.

At its core, all we ask is that you understand what you have and stick to a system for adding more.

In practice, it’s a lot more complicated than that.

The cloud cost overruns that will make you flinch

Nobody likes having the “Did you know?” conversation after a cloud assessment:

  • “Did you know you just repurchased 150 reserved instances for an app that was retired four months ago?”
  • “Did you know you’re still paying for detached storage until it’s deleted?”
Delete AWS volumes to stop paying for them

Two things tend to happen when a company starts experimenting with cloud:

  • Everyone procures their own environment with no oversight or formal governance; and
  • Everyone makes mistakes.

Neither of these are bad! At least not at first.

You want people to have the freedom to explore, learn, and yes, break things. Then you want to pretty rapidly reign that freedom in.

Otherwise, you get dozens of expense reports with AWS instances charged back to personal credit cards. Or, equally likely, you end up like one customer of ours, who was unknowingly paying for 55,000 GB of storage leftover from test servers that were spun up and shut down without properly deleting the reserve disks.

Building cost optimization into your cloud on day one

I want to be clear, these overages aren’t the fault of teams that don’t know what they’re doing.

All of these mistakes can be, and are, made by talented professionals.

We are constantly staying on top of unnecessary reserve disks, but we’re able to do that because optimizing cloud computing is our full-time job. We’ve already made our mistakes, and we know what to look for now.

When you approach a cloud migration, there are so many opportunities to overpay.

The faster you move, the more likely it is that you’ll end up replicating unnecessary infrastructure, fragmenting your environments or otherwise creating sprawl that will be reflected in your first bill.

Cloud strategy is the easiest step to skip, but it’s the most important one not to.

If you do nothing else as you move to the cloud, take the time to properly consider your strategy. Not just why you’re moving and what you’re hoping to get from it, but what’s going to move and how you’re going to govern it going forward.

With the cloud, there are no built-in checks and balances. You have to create your own.

Cost optimization used to happen naturally in the IT process. Buying a server had built-in brakes. People asked what it was for and how much it cost before the procurement team placed the order and the server was shipped to you. Now, those resources and more are available by entering your credit card online.

Today, it’s almost too easy with the cloud. Anyone can get resources in minutes, and so everyone does. The only way to keep tabs on what you have — and keep your bills predictable — is to create a process as soon as you can, then hold everyone to it as long as you can.

Why cloud cost optimization tools can’t make up for missing strategy

Cloud invoices include a lot of data. They’re also extremely complex.

It’s not unheard of for a bill to be millions of lines long. (Think per-second billing, applied across hundreds of thousands of individual SKUs.)

It makes perfect sense to use cloud cost optimization software like CloudCheckr. Tools like these are great, as long as it’s understood that they’re not a replacement for strategy.

All the cloud optimization services in the world won’t help you if you don’t know what you’re optimizing the cloud for.

Knowing your goals will dictate whether the costs of having redundant environments is worthwhile, for example, or whether you really do want people to be able to quickly spin up resources without approval.

You need the broader understanding of the environment and the business goals for effective cloud management and optimization.

One example:

The most cost-effective way to buy cloud in AWS is via a reserved instance. AWS will give you a discount for the upfront commitment — but you have to renew on schedule. If you have 18 reserved instances on a three-year contract and no one is responsible for renewing it when the time comes, you might see a 40 percent increase in your bill overnight when you suddenly go from prepaid to pay-per-use.

The reverse is also true.

If someone in finance is responsible for renewing your reserved instances, they may not have any idea that they’re paying to host an application that will be deprecated in four month’s time — or that you’re planning to move all of your instances from Ohio to Oregon to better meet customer needs.

There’s no tool on the planet that’s going to give you those insights.

You have to have the systems, strategies, and internal communications in place to connect your cloud costs with your business insights.

The cloud cost optimization strategies worth your time

If I were advising a friend on when to bring in experts on a cloud migration, I would always recommend they hire experts to help with the strategy phase at the very least.

Setting up the right KPIs, building out governance policies — these are things you don’t necessarily get a second shot at.

If you can get them right the first time, you won’t have to worry about what your bill is going to look like this month. Cloud cost optimization will be built in.

If you’re considering a move to the cloud, we’d love to help you take the right first steps. And if you’re already in the cloud and have a nagging sense that something is not quite right, well, it’s better to find out now. We can audit your system and let you know where you’re at and what your options are.

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