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Cloud Cost Savings: 9 FinOps Tips for Optimizing Your Cost

Cloud Cost Savings; 9 FinOps Tips for Optimizing Your Cost

On average, 32% of business budgets will be wasted each year from overspending on the cloud. This is why any business that relies on cloud infrastructure should focus on optimizing its cloud costs. 

Optimizing costs is a complex balancing act. You need to make these cost optimizations while still maintaining the functionality of your applications and preventing downtime.

If you’re looking to reduce the cost of your cloud computing services, this article reveals 10 cost management tips to help you do it.

1. Establish a FinOps culture of cost awareness and accountability

Ultimately, reducing cloud costs isn’t something company executives can do alone. Instead, it requires a company-wide commitment to cost efficiency. This is why the core principle of the FinOps Foundation is that “everyone takes ownership of their cloud usage.”

Establishing a culture of cost awareness and accountability means teaching your team members how to prioritize cost effectiveness when designing new applications, storing data, creating data backup and disaster recovery plans, and more. It also means effectively tracking cloud costs by project, team, and department to create transparency and accountability.

2. Determine budgets and forecasts

Forecasting in the cloud is often difficult, meaning you will likely need to create quarterly or even monthly forecasts rather than annual forecasts.

Setting a budget for your cloud spend is a key step, and it’s fortunately a little more straightforward. You can’t determine your cloud savings without having a budget to compare those savings against. So, calculate a budget based on your forecasted cloud usage and use it as a baseline for your cost optimization efforts.

3. Proactively rightsize your cloud resources

Overprovisioning resources leads to waste and unnecessary expenses, while underprovisioning resources can lead to performance issues. 

Companies can use instance sizing and capacity planning to proactively match cloud resources with workload demands. Auto-scaling and dynamic resource provisioning also help ensure you keep your resources and workload requirements aligned.

4. Monitor and correct cost anomalies

Cost anomalies, such as unexpected price spikes, can have a big impact on your cloud bill if you don’t promptly identify and address them. Poorly optimized workloads, misconfigured services, and provisioning mistakes are just a few examples of things that can lead to cost anomalies. Swiftly detecting these cost anomalies allows you to resolve the issues causing them before they drain your budget.

5. Implement continuous cloud cost monitoring and reporting

Using a rate optimization tool like ProsperOps, you can monitor your cloud costs around the clock, keep a pulse on your cloud expenses, and ensure you’re getting the lowest rates for your resource utilization. 

This is valuable for spotting cost anomalies, staying on top of cloud cost trends, generating accurate forecasts, identifying opportunities for improved cost efficiency, and more.

6. Leverage the right pricing model

To maximize the benefits of cloud provider pricing models, you have to accurately assess your current and future cloud usage needs, choose the pricing model/discount instrument that best fits each workload, and continually monitor your discount instruments to ensure maximum cost-effectiveness.

To help you better understand how these discount instruments work, let’s take a look at the various discount instruments offered by AWS:

Reserved Instances

Reserved Instances (RIs) allow you to purchase specific types of EC2 Instances upfront at a discounted rate. This pricing model is ideal for workloads with predictable usage patterns and offers three payment options: All Upfront, Partial Upfront, and No Upfront. Compared to On-Demand pricing, RIs can save organizations up to 72%.

Savings Plans

Savings Plans offer greater flexibility compared to RIs, allowing you to achieve savings across a range of Instance families instead of being locked into a specific instance type. This makes Savings Plans a great option for dynamic workloads that require different instance types. Like RIs, Savings Plans can save companies up to 72% compared to On-Demand pricing.

Spot Instances

For workloads and applications that can tolerate interruptions, Spot Instances can provide substantial savings. Spot Instances allow companies to purchase EC2 capacity at up to a 90% discount compared to On-Demand pricing. However, the catch is AWS may reclaim the capacity if it is needed elsewhere. This means Spot Instances are a good choice for flexible, fault-tolerant workloads.

Burstable Instances

Burstable Instances provide a baseline performance with the ability to burst to higher performance levels when needed. Compared to On-Demand pricing, Burstable Instances can save companies up to 15%. Burstable Instances are best suited for workloads with variable, unpredictable resource requirements.

7. Assess and improve software licensing spend

Software licenses can often be a considerable part of a company’s overall operating costs, and without careful management, they can easily lead to unexpected expenses. By conducting a thorough assessment of your software licensing spend, you can identify inefficiencies, duplicate licenses, and unused software.

Aligning software licenses with cloud resources and workload demands also ensures the right licenses are assigned to the right instances, preventing overprovisioning and unnecessary costs.

8. Automate your cost optimization efforts

Cost optimization tools such as ProsperOps enable companies to completely automate their cloud cost optimization efforts. With ProsperOps, you can monitor and analyze your cloud costs automatically and in real time. 

ProsperOps also continually performs cost-saving optimizations, applying discount instruments and eliminating idle resources. Automating your cost optimization strategy with ProsperOps means you can optimize your costs around the clock while giving time back to your team. 

See for yourself how ProsperOps streamlines cloud cost optimization. Sign up for a free ProsperOps demo!

9. Optimizing existing resources before committing to long-term plans

Discount instruments such as Savings Plans and RIs can save you a lot of money by requiring you to commit to purchasing resources upfront. However, if your existing resources and infrastructure aren’t yet optimized, committing to a long-term plan may not be your best bet.

By working to first achieve visibility into your existing expenses and optimize your existing resources, you can make sure you rectify any areas of inefficiency or overutilization before you make a long-term commitment. This ensures you use the resources you purchase upfront as efficiently as possible.

10. Eliminate unused resources

Eliminating unused resources in the following ways can directly reduce your cloud bill in a way that has no impact on performance:

  • Monitoring storage utilization and reducing excessive free space 
  • Releasing unassociated Elastic IP addresses
  • Using a lifecycle policy to expire non-current versions within Amazon S3 (for buckets with versioning enabled)
  • Cleaning up old EBS volume snapshots
  • Removing unattached EBS volumes

Be on the lookout for opportunities such as these, and you can make sure you are only paying for the resources your company actually needs.

Optimize your cloud costs effortlessly with ProsperOps

There are plenty of tips and best practices companies can use to reduce their cloud costs. However, using a tool such as ProsperOps to optimize cloud costs automatically is by far the easiest and most effective approach.

With ProsperOps, you can monitor and optimize your cloud costs 24/7 without any manual intervention required. This enables busy teams to execute a comprehensive cost-optimization strategy without breaking their backs in the process.

To see how ProsperOps empowers companies to reduce their cloud costs effortlessly, sign up for a free ProsperOps demo today!

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