Why understanding the cloud helps manage costs
Posted on: October 23, 2020
Businesses are increasingly moving to the cloud. Organizations of all sizes and types are recognizing the valuable cost savings, as well as the accessible speed and agile scalability, of cloud computing.
Storing large amounts of data is crucial for every company, but it can be insecure and expensive to keep it onsite. Physical files can be lost or stolen, computer hard drives damaged and local servers, which require dedicated support and attention, can go down unexpectedly. Important information may be vulnerable or unavailable to off-site and on-the-go users. Mitigating some of these issues, cloud storage decreases overhead and maintenance costs related to server hardware.
Cloud computing has become more popular and affordable in recent years because of technology developments that allow for better storage and access to remote-hosted data on the internet. These services are now extremely scalable, requiring little effort or expense to adjust to changes in demand and to handle shifting data needs.
Clearly, the cloud is an efficient, economical solution for businesses. However, there is still a price to pay for cloud infrastructure. Continually spinning up resources is not cheap, especially at on-demand rates, and controlling and cutting cloud management costs is a vital responsibility for any CIO or CTO.
Cloud infrastructure, storage and computing
Infrastructure describes the individual components of cloud computing, including hardware, storage, virtualization and network resources, as well as the complete system. It is an overarching term for the tools and technology necessary for building a cloud to host applications and services.
Based on highly virtualized infrastructure, cloud storage involves an abstraction process that separates IT resources from physical hardware, allocating them into centralized pools. The stored digital data is available to users when and where they need it “on the cloud.”
The storage itself often spans multiple remote servers housed in data centers typically hosted and managed by cloud service companies. They’re responsible for ensuring not only that the data is always accessible, but also that the physical environment remains safe and operational. These third-party providers, which own and maintain the infrastructure, sell fixed-size server space to clients, who use it to store their data. This is infrastructure as a service (IaaS), one of the main types of cloud computing provider services.
While they’re sometimes used interchangeably, cloud storage and computing are not the same. Storage is basically a system that enables you to save data on the internet. Requiring greater processing power, cloud computing is the on-demand availability of IT resources and delivery of hosted services over the internet. It allows you to make use of the stored data, to work on and share projects.
Benefits of cloud computing
There are many reasons companies are shifting to the cloud, including:
Most cloud computing services offer an as-needed pricing model, so that clients can access and only pay for the technology services they actually use. Organizations don’t have to buy or maintain hardware, nor invest in trained personnel, because the equipment is managed by the provider, allowing them to minimize or avoid up-front infrastructure costs. You only pay for the IT you consume, swapping capital expenses for variable expenses, which are lower because of the economies of scale.
The cloud delivers easy, immediate access to a wide array of technologies, enabling companies to get their applications up and running quickly, with better manageability and less maintenance. You can spin up resources as needed and implement IT services faster, so you have the freedom and flexibility to innovate and grow. Software integration occurs automatically, saving time and effort and allowing enterprises to rapidly deploy customized applications that best support their business.
Rather than oversupplying or underestimating resources up front to accommodate future levels of business activity, cloud computing lets you adjust and provision exactly what you need. Resources can automatically be scaled up or down, instantly increasing and decreasing capacity to meet fluctuating and unpredictable demand. When your company takes off and business activity peaks, you have practically unlimited resources.
In addition, cloud computing allows easier backup, recovery and mobile access to information anywhere with an internet connection. Improvements have also been made to technical performance and data security.
Cloud cost management
Despite cost savings being one of the primary advantages of cloud computing, the pay-as-you-go model many providers use also presents problems. This pricing can result in unexpected and high operating expenses for companies unfamiliar with it or unaware of what – and how much – they are spinning up to the cloud.
Billing can be granular and obscure, with service details difficult to discern and a lack of visibility of cloud resources. Pay-as-you-go has the potential to reduce waste and optimize spending, but it necessitates new tactical approaches to produce significant cost savings.
What can companies do?
- Resist a cloud-exclusive mindset: Not every project requires a hyper-scaled solution and IT-led cloud adoption with no clear business outcomes can come up short on value.
- Carefully consider lift-and-shift migrations: Leverage cloud optimization services to align capacity with workload and avoid overspending.
- Use auto-scaling services: Automatically monitor applications and adjust capacity – even stopping unused instances – to maintain predictable performance at a low cost.
- Find discounts: Prepaid reserved instances, which providers offer at a cheaper rate than on-demand instances, are more affordable for known usage.
- Utilize tools: Use a centralized management tool to measure analytics and track various services and spending, as well as a cost calculator to compare provider prices.
There is a multitude of cloud cost management software that can help organizations control their service spending by monitoring resource usage and computing demands. These tools, often combined with an IaaS platform to diminish pay-as-you-go costs, automatically scale usage to optimal rates based on demand. Cloud cost management software can increase service efficiency and typically also has reporting features detailing redundancies and waste.
The three largest providers offering IaaS are Google Cloud Platform, Microsoft Azure and Amazon Web Services, which is the most widely used platform with the largest market share. Competition between these vendors has created a degree of parity in services, features, reliability, application integration and price, including on-demand and reserved instance types.
The specific pros and cons of the various options will depend on your business needs and budget and the nature of your projects (i.e. short-term, long-term, likely to change, etc.).
Control cloud costs with Calance
The market today is a swirling sky of industry giants making dramatic impacts with different services and price models, and a range of smaller companies offering cost management software and monitoring tools. With so many options to choose from and decisions to make on cloud infrastructure, now is the time for businesses to evaluate their resource usage, computing demands, data storage needs and expenditure.
IT professionals and executives need to adapt their mindset to understand better, be more flexible and utilize tools that improve efficiency. Companies should thoroughly think about their cloud service alternatives, but also be prepared to change providers and try different solutions.
When it comes to cloud infrastructure and management costs, don’t just endlessly spin and excessively spend. Calance can help organizations looking to leverage technology to enhance their business operations by assessing their data needs, evaluating their economic choices and trimming their cloud costs.
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