Reduce Cloud Costs with These 5 Technologies

Cloud is transformative, dynamic, flexible – and unfortunately increasingly expensive. Even so, moving workloads to the cloud can save your organization money, but the secret to realizing this advantage is controlling cloud costs.

According to the 2022 KPMG U.S. Technology Survey, 66% of business executives say their organization’s cloud programs have not lowered the total cost of ownership of IT systems.¹ This is at least in part a result of not containing cloud expenses. In the Flexera 2023 State of the Cloud Report, 82% of respondents cite managing cloud spend as the number one cloud challenge, and they expect a continued increase YoY in cloud spend.²

Making matters worse, about 30% of cloud spend is wasted, according to the last three Flexera cloud reports.

The following are some of the factors that drive up cloud costs:

• Undisciplined cost management: Unplanned cloud expenses can be incurred.
• Shadow cloud services use: Even well-intentioned shadow IT projects can result in unexpected expenses.
• Unnecessary testing during development: Testing is an essential part of the dev process, but how often and when should be judicious.
• Overprovisioning: Getting the production environment provisioning is tricky; it’s safer to err on the side of caution.

With these challenges in mind, the following are five technologies that can support your cloud cost optimization initiative.

And, as you’ll also see, CoreSite direct connection to public cloud can drastically reduce data transport costs – one more good reason to build colocation into your multicloud strategy.

FinOps Solutions

FinOps – also known as cloud FinOps, cloud financial management and cloud cost management – is an increasingly popular method to reduce cloud costs. FinOps is the practice of maintaining a culture of financial accountability with respect to the cloud.³

Supporting this approach, FinOps software solutions can deliver visibility into your cloud costs and usage, so you can identify trends and gain insights. These products empower you to minimize unused resources, find the most cost-efficient cloud platforms and plans, and reduce cloud spend.

Since the FinOps market is relatively new and expanding rapidly, this product category can have different names. For example, analyst firm Forrester calls it “cloud cost management and optimization” (CCMO).⁴ Examples of products in the FinOps space include Spot by NetApp, Flexera One Cloud Management, Apptio Cloudability, and CoreStack FinOps.

Hyperscaler Cost Management Tools

All the major cloud services – such as AWS, Azure and Google – provide built-in cloud cost management tooling to monitor, forecast and optimize cloud costs. Although some might consider these to be FinOps tools as well, they are separated here because they are part of your cloud provider’s service portfolio, not standalone products.

As an example, Microsoft offers multiple tools, including: Azure Pricing Calculator, Total Cost of Ownership Calculator, Microsoft Cost Management, Azure Advisor and Azure Resource Manager.

Cloud Monitoring Features

Other software products – such as application performance management (APM) and observability solutions – include cloud monitoring modules with features to track costs. The primary use of these products is monitoring and managing application or infrastructure availability and performance. However, they also enable you to analyze cloud resource usage and costs, and even alert you of cost-related issues.

Examples of vendors that offer cloud cost monitoring features include Cisco and Splunk, Dynatrace, ManageEngine and New Relic.

Autoscaling

Scalability is one of the top advantages of the cloud. However, if you allocate resources manually, you can inadvertently over-provision, which leads to higher cloud costs because you are paying for idle resources. Autoscaling is a capability that automatically adjusts your cloud resources up or down as needed, based on the parameters you set.

Autoscaling is critical for organizations that experience unpredictable workloads hosted in the cloud, because it scales up resources to keep mission-critical and customer-facing services up and running. On the other hand, autoscaling also scales down unnecessary resources used to help reduce cloud costs. All the major cloud providers offer autoscaling features.

Direct Connectivity

Cloud providers sometimes charge “hidden” fees that you may not expect. For example, a data egress fee is the per-gigabyte cost to transfer your own data out of the cloud, and it can be surprisingly expensive. While there is typically no charge for uploading your data into the cloud, you pay to get it back out. Data volume is hard to estimate, and you may not realize how much data is being moved – until you get the bill.

Whether you are migrating data from one cloud to another, downloading data to your on-premises systems, moving data between applications or replicating data for disaster recovery, each of these scenarios can quickly escalate your data egress costs. IDC reports that egress fees account for an average of six percent of public cloud storage bills.⁵

Egress fees can be abated, however, by utilizing a direct connection – a dedicated, physical fiber interconnect to a cloud provider from a colocation facility. For example, CoreSite offers direct connectivity to AWS, Azure, Google and Oracle, bypassing the public internet, which can result in 60%-70% savings on data egress costs.⁶

Use Technology to Support a Cloud-Conscious Culture

Technology alone cannot reduce your cloud expenditures, but when combined with a cloud-conscious culture, these solutions can save your organization a significant amount of money, without limiting your access to vital high-performance cloud services.

Ready to get smarter about controlling cloud costs? Schedule a meeting with CoreSite today to find out how you can reduce cloud costs with direct connectivity and help you save on broadband costs as well.

References

1. KPMG U.S. Technology Survey, 2022 (source)

2. Flexera 2023 State of the Cloud Report (source)

3. What is FinOps?, The FinOps Foundation, November 2021 (source)

4. The Forrester Wave™: Cloud Cost Management And Optimization, Q3 2022 (source)

5. FUTURE-PROOFING STORAGE, IDC, March 2021 (source)

6. Cost savings are based on CoreSite cost comparisons using publicly available and private information and/or CoreSite customer reported costs savings and may not be indicative of the costs savings that may be experienced by every customer that switches to the applicable CoreSite service.