Simple Steps for Cutting Costs in the Cloud

Facing never-ending pressure to optimize efficiency and compete in disrupted industries, senior managers are increasingly looking for any strategic edge that maximizes investment returns.

Obviously, every company has its own unique strategy for watching its bottom line but now cost control is even offered “as a service” in the cloud with a small army of consultants dedicated solely to parsing through your monthly bill with the goal of cutting any fat or gristle, or in this case, tearing down any unused compute. (so EC2 instances sitting around lazily in the VPC should be very afraid)

In fact, a study out of Stanford last year said that 36% of the average company’s bill is going towards unnecessary cloud services, meaning companies globally could save billions by optimizing their workloads.

Interestingly, when we look at cost optimization at a high level we do see common threads that characterize the top-performing companies.

For starters, many industry leaders continually refine and improve cost optimization. In other words, they broach the subject more than just quarterly, and it makes sense — we already practice continual integration and deployment, why not implement continual optimization?

“We love clients who are borderline obsessed with cost optimization from MVP through production” explains Brian Tunison — Director, Service Delivery & Design at the cloud integrator RestonLogic. “Cost-centric companies push super hard every day to re-configure their practices to maximize returns”.

But what can companies specifically do beyond just adopting “cost-aware” best practices early in the product development process?

For starters, peak-performing companies seem to achieve better business outcomes by considering cost optimization as part of a broader “Best-Practices Framework” that holistically also considers performance, operational efficiency, reliability and security.

Meanwhile, one reason controlling costs is so difficult for companies to control is because they have to predict future capacity and business needs while navigating complex procurement processes.

So companies will benefit from improving their ability to analyze the use of resources, developing acumen in picking the appropriate resource types, and scaling the deployment of those resources in line with demand.

True, some cost optimization is already “baked” into in the cloud as providers offer the benefits of scaling and pay-as-you-go pricing, but the peak performers still somehow shrewdly find additional case-specific ways to find efficiencies.

So cost optimization might not be the most important Key Performance Indicator (KPI) for every company, but the argument that a cost-optimized system will improve resources utilization, produce the most favorable outcome at the lowest possible price point, and help companies meet their strategic goals is very convincing.