Maybe your boss asked you to cut costs on cloud. Perhaps you are the boss and need to tighten the budget. But you aren’t a cloud expert – managing IT teams, supporting business growth and enabling digital transformation are your superpowers. Your expertise is where your time is best spent elsewhere.
Thanks to the pandemic, your cloud is working extra hard. Whether your company is working partially or 100% remote, just about everything happens in the cloud. MariaDB reported that more than half of companies (51%) reported the pandemic prompted moving more applications to the cloud and 38.6% of companies are now moving to working 100% in the cloud. But greater usage means greater expense – and saving money is more important than ever with today’s uncertain economy.
Staying in budget with cloud costs is a major challenge – IDG reported controlling cloud costs was the number one challenge. You don’t want to sacrifice quality. However, in a survey by Flexera, respondents reported their organizations waste 30% of money spent on cloud. As concerning, respondents said that they went over their cloud budget an average of 23%.
It’s possible – even likely – your company can get the exact same performance and reliability for less money. Each of the following six ways to save money are as taxing as picking up the phone or doing some light research on the web.
1. Research savings plans
Some providers give you a big discount – AWS is up to 72% – when you sign a contract for 1 to 3 years and commit to purchasing a specific number of hours of usage. Some of them also allow some flexibility, even with their discounted plans. AWS, for instance, lets you flex among their EC2, Fargate, and Lambda cloud solutions.
Savings plans work best for companies that use a consistent (and stable) amount of cloud service every month and aren’t expecting any big changes in the next few years in terms of expansion, mergers, or restructuring. Of course, the cloud service must meet your needs (and projected future needs) since you’re locked in. Be sure to ask about overage charges – most providers charge their on-demand rate when that happens.
2. Ask about sustained-use discounts
Your company uses a lot of cloud bandwidth, but you aren’t ready for a long-term relationship. Maybe you expect changes in your company’s needs. Or you think it might be time to break up with your current provider, but you’re still on the fence. A sustained-use discount might be your ticket to savings without putting a ring on it.
Companies offering a sustained-use discount, such as Google Compute Engine, reduce your bill by a percentage – often 20 to 30%, depending on type and amount of use. Find out what counts as sustained use (many require usage of 25% of the month) and what type of use counts.
3. Consider reserve instance plans
With reserve instance plans, you sign a 1- to 3-year contract up front for service, and you get significant savings – around 75% with AWS, Azure, or Google Cloud – for on-demand usage. Before signing a contract, look carefully at the cancellation clause as well as SLAs with the provider to ensure the plan provides the service you need to run your business.
Reserve instance plans work best for companies that are committed to a specific cloud provider and aren’t expecting to change providers for at least the next couple of years. Make sure the provider meets both your current and future needs before locking into a reserve plan. Companies that have a high amount of variable use and don’t want to commit to a certain amount of use each month with a savings plan often find that reserve plans meet their needs and offer big savings.
4. Hire a cloud expert to evaluate your needs
When you hire a cloud expert, such as Egen, you stay focused on what you do best. Many companies assume they can’t afford to outsource cloud – and they’re wrong. Most cloud experts pay for their services many times over with the savings they provide and your company’s increase in productivity with the right cloud service.
5. Set up cost alerts
Have you gotten invoice shock from your cloud provider? Opened the email (or envelope) and gasped? You aren’t alone. It’s incredibly easy to overspend on cloud usage, especially with teams working remotely – and often overtime. Companies often don’t realize there’s an issue until the bills come in and the budget is shot.
With a cost alert – which takes about 43 seconds to set up, give or take – you get notified when your bill exceeds a specific amount or if your usage is heading toward overage costs, depending on your provider. You can then either reduce usage (usually not a good idea) or call your provider and negotiate purchasing extra hours or changing your plan.
6. Review your usage patterns monthly
Your cloud plan is not a crock pot. You can’t set it and forget it. You must actively monitor usage patterns to make sure you’re still on the most cost-effective plan for your needs. Look at usage pattens to see if a simple plan switch saves money. While you should do this every month, pandemic or not, monitoring usage is even more important right now since business needs seem to change every 10 minutes – or less.
Yes, you can save money. But to do that, you have to make time and have the right resources to handle these tasks. Many companies turn to a cloud expert for these very reasons. The key to unlock savings is finding an expert to put these strategies into action. Every day that you continue on as you are, you’re likely paying more than you need to for your cloud services.