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Increased data processing, storage, and computation needs for businesses have meant that startups and small-to-midsize firms increasingly rely on cloud infrastructure. But with that opportunity has arisen a challenge. The same flexibility and scalability that makes the cloud attractive, can also make cloud costs unpredictable and difficult to manage. This is especially the case for businesses with variable workloads. Alongside large costs like payroll and office leases, cloud-native businesses are seeing their cloud costs climb.
Without careful planning and effective management, cloud expenditure can devour your business budget. Fortunately, cloud cost optimization can help. By leveraging effective strategies and tools, companies can better manage their cloud resources, minimizing waste and aligning their cloud spending with their business goals. This guide will guide you towards practical ways to achieve optimal cloud cost management—without compromising on performance or security.
Cloud cost optimization is a strategic approach to controlling and minimizing the expenses associated with your business’ cloud computing services. Measures to optimize your cloud costs go beyond simple cost-cutting. Instead, they focus on rigorous analysis of your current cloud usage, identifying inefficiencies, and eliminating waste to maximize the value of each dollar spent on cloud resources.
The goal of cloud cost optimization is to gain better visibility into your cloud environment to ensure that resources are utilized effectively, balancing cost with performance, security, and availability.
Optimizing cloud costs is not a one-time event, but rather an ongoing strategy with a myriad of benefits—from a more cost-effective cloud environment to a more competitive business.
Understanding the necessity and benefits of cloud cost optimization is only the first step. The real challenge lies in identifying and implementing proven strategies that can effectively control and reduce your cloud costs. Let’s delve into actionable ways to keep your cloud costs in check while getting the most out of your cloud infrastructure setup.
It’s easy to glance at your cloud bills, only zooming in on the grand total. But effective cloud cost management begins with taking the steps to understand your cloud bill and overall cloud pricing. Knowing what charges are included, and what each line item maps to, will help you gauge where your money is going to optimize costs.
Here are the portions of your cloud bill to understand:
A cloud provider with a complicated pricing structure can lead to unexpected costs and surprise bills, making budgeting a challenging task. On the other hand, opting for cloud providers that offer clear, straightforward, and predictable pricing will allow your company to make informed decisions about cloud resource usage and cost control measures.
With DigitalOcean, what you see is what you get. DigitalOcean has a straightforward and predictable pricing model with simple billing. There are no surprise costs obscured by complex pricing structures.
Look for cloud vendors that provide a detailed breakdown of your usage and cost, making it easier to understand your cloud bill and identify areas for optimization. A consistent and transparent pricing structure keeps your cloud costs in check, while also giving you peace of mind.
Part of your cloud cost optimization strategy should include pinpointing underused (and inefficiently used) cloud resources. These unused resources, while seemingly innocuous, can quietly drain your budget without providing any value to your business.
Here are a few proactive steps you can take:
Right-sizing is the practice of matching your computing resources with your actual needs, ensuring that you’re not overpaying for unused capacity. Right-sizing involves both reducing the size of over-provisioned resources and increasing the size of resources that are near (or at) capacity.
Here are actionable tips for right-sizing your cloud computing services:
Scaling on demand is one of the most significant advantages of building a cloud-first company. However, manually managing scalability can be challenging, leading to over-provisioning and, as a result, inflated costs. Autoscaling can be the solution to allowing for both cost- reduction and efficient resource optimization.
Autoscaling allows you to dynamically adjust the quantity of computing resources, based on actual usage. Autoscaling is particularly useful for unpredictable and mission-critical workloads. Instead of keeping resources idle during low usage periods, or hitting capacity during high usage, autoscaling ensures that you use the right amount at the right time.
One great tool for enabling autoscaling is Kubernetes, an open-source container orchestration system known for its ability to automate the deployment, scaling, and management of applications. Kubernetes offers different options to facilitate effective autoscaling:
While Kubernetes is available on a number of cloud platforms, DigitalOcean provides a managed Kubernetes service. This service reduces the overhead of setting up and managing a Kubernetes environment, letting you focus on deploying and scaling your applications.
When it comes to cloud storage, one size doesn’t necessarily fit all. Different types of data and different business needs require unique storage solutions. Using the right storage options is key to maximizing performance and minimizing costs. For instance, block storage and object storage are two common solutions with unique strengths.
Block storage offers high performance and is ideal for transactional and structured data that requires frequent read and write operations. That storage type generally comes with a higher cost but has performance benefits for latency-sensitive applications.
Object storage, on the other hand, is significantly more cost-effective for storing large amounts of unstructured data. While it doesn’t offer the same high-speed access as block storage, it has benefits for infrequently accessed data, such as archival storage or backup data. The correct storage choice will reduce costs and contribute to your overall cloud cost optimization strategy.
Here are tips for optimizing your cloud storage:
Spot instances allow you to bid for unused cloud provider capacity at a significant discount, compared to on-demand instances. While these instances can be interrupted or reclaimed by the provider, they can be an effective cost-saving measure for workloads that are non-critical and flexible. With proper management, spot instances can be a cost-effective part of your cloud cost optimization strategy.
Here’s how to get the most out of spot instances:
Being a multi-cloud company, where you use two or more cloud computing services from different providers, can play a significant role in optimizing your cloud costs. Each cloud service has its strengths and weaknesses. By leveraging multiple clouds, you can exploit the advantages of each.
One primary advantage of the multi-cloud approach is the potential for cost-saving opportunities. Each cloud service provider has their own pricing models and rates for specific services. By comparing them, you can select the most cost-effective service for each provider. Additionally, a multi-cloud strategy can support risk management, provide increased flexibility, and prevent vendor lock-in.
Considering a multi-cloud strategy for your business? Explore DigitalOcean for cost-effective cloud services. Pricing for DigitalOcean’s virtual machines, Droplets, start at $4.00/month.
Use our pricing calculator to create a custom price quote based on the number, usage, and capabilities of DigitalOcean services you choose.
Implementing real-time monitoring and analytics provides valuable insights into your cloud usage. By monitoring your cloud usage, and analyzing trends in real-time, you can proactively identify (and solve) inefficiencies and monitor cost anomalies, reducing unnecessary expenditure.
Here are some key metrics your business should be monitoring:
Cloud cost optimization shouldn’t be an afterthought. Instead, it should be a continuous effort integrated throughout your software development lifecycle, embedding cost-efficiency into your company’s DNA.
Here’s how to optimize cloud costs at key stages of development:
This approach will yield significant cost savings over time and makes cloud cost optimization a key part of your software development cycle.
DigitalOcean can help you save on your technology budget and optimize costs with our competitively priced solutions like Droplets, Spaces Object Storage, and Volumes Block Storage. These services provide scalable and secure data storage, without breaking your budget.
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