COVID has wreaked havoc on many businesses. Revenues may be down; spending on employing contract employees may be up. And departments are being asked to cut their spending as much as possible without cutting key functions.
One way to cut waste and unnecessary spending is on cloud services. When money has flowed well, cost-cutting on these services was not an issue. But it is now, and there are ways to reduce costs without losing key functions simply by eliminating unused resources just sitting there and/or downsizing the resources that you do use, more carefully looking into discounts or savings plans, etc.
Here are seven tools and tips to start saving immediately.
1.Conduct a True Assessment of Current Need
There is no way to determine which cloud provider will offer the most cost-effective option until you know what you need the most. Cloud service provision has become a hugely competitive industry, and marketers are aggressively offering all types of discounts, savings plans, and reserved instances. The catch is to lock customers into long-term contracts, starting from three years and more.
Once you have established exactly what you need, then look at what providers offer, not before. The other caveat is the long-term IT goals of your organization. If the long-term goal is to migrate more of your data and processes into the cloud, you have to make sure that, even though you optimize now, you will be able to migrate more functions.
2.Tackle the Immediate Savings from Optimization
Once you have conducted your assessment, take the immediate savings you can generate right now. Identify where you are overspending and cut those costs (so long as you are not in a long-term contract). Here are some of what you should look at:
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Get rid of your “idle” resources – which ones are just sitting out there unused?
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Optimize your cloud costs by getting rid of unused storage – this results in immediate savings on your monthly bill.
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If you haven’t already done so, schedule your instances to shut down after business hours. You don’t need to run your CRM services unless you are open 24/7. Automating this process makes it highly efficient.
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If your platform has developed new less costly instances, move to them. As much as this may affect other departments within your organization, there will be a need for discussion, so savings won’t be immediate.
3.Construct an Architecture Diagram
This is a key tool to help you see how each part of your cloud processes works together. And you will be able to see which parts are not being utilized to the extent of what you are being charged. If you have a “pay as you use” plan (and this is standard), you can reduce your spend here.
An architecture diagram is a “living document.” It should be updated on a regular basis as you make any changes. If no one in your IT department can craft such a diagram, plenty of outside resources can help at a very reasonable cost. That cost will be more than offset by your savings.
4.Monitor the Costs to Stay Within Your Budget
You can set up certain actions and alerts with your provider so that you will receive notifications such as:
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You are reaching your monthly spending allotment
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Your storage is exceeding the amount you have set
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You have under-utilized certain instances or storage over a certain time
This allows you to increase or decrease as you see the need. And when you can reduce such things as instances or storage, you’re going to save.
5.Study Those Cost Reports
You receive a monthly invoice from your provider. This will provide the exact details of your usage and the related cost. These can be a challenge to review, but you must. Compare the details against your architecture diagram to see where the overspend and where the under-utilization is occurring. Make adjustments as necessary.
6.Be Aware of Software Licenses
You may have software licenses that you can bring to the cloud. For example, if you have Microsoft Windows licenses and migrate to the Azure cloud, you will have lots of savings upfront. On the other hand, certain licensing is more expensive, due to restrictions, and you will “eat” the cost of that (e.g., Oracle database). As you choose a cloud provider, be certain that you know exactly what software licenses you can migrate and which will incur additional costs.
7.Negotiated or Standard Discounting Options?
If you have your optimization plan and budget parameters in place; if you know how your needs may change in the future, you are ready to look at discount plans from various providers. There are two types:
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Negotiated Discounts for Enterprises: These are usually offered with a three-year commitment and are not subject to new negotiations until that three-year period is expiring.
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Standard Discounts: Cloud providers themselves offer these discounts, and they can be purchased at any time, along with that three-year commitment. Still, you can realise greater savings given the flexibility of purchasing them. Your job will be to track your usage to be sure you are taking advantage of those discounts.
To Sum it Up
There is no doubt that migration to the cloud is, overall, a huge cost saving. It drastically reduces the need to maintain and upgrade hardware, deal with security and networking issues, and more. As well, it just provides for greater efficiency and frees up IT staff for other critical tasks. But cloud spending can get out of control if the right measures are not in place to monitor and adjust those costs. These seven tips and tools should help you do just that.