March 5, 2019 | InBrief

Public cloud environments: How to effectively manage costs

Public cloud environments: How to effectively manage costs

There are several compelling reasons to move to the cloud.  Speed of innovation.  The ability to scale quickly.  Production ready services to leverage AI, IoT, natural language processing, etc.  However, for most businesses, it all comes down to costs.

In a previous blog post Moving to the Cloud: Myth Versus Reality, I touched on some misconceptions regarding moving to the cloud, including the idea that being in the cloud is always cheaper than being on-prem.  Let’s dive deeper into managing costs for cloud infrastructure and services. Most business leaders, and even some technology leaders, look at “moving to the cloud” as a one-for-one move.  ‘I take my server that hosts this thing and is set up like this, and I move it over’.  Taking this approach can yield some savings, but often those savings aren’t significant enough to prompt a move. As a managed services provider, we work with clients to help them determine what a “move to the cloud” would look like for them.  For most mid-market organizations, cost is still the primary consideration.  Much of the time, the ability to scale quickly as their business grows is the next requirement.  By providing a better understanding of how infrastructure in the cloud behaves, the convergence of these requirement is where firms can recognize significant savings.

Cloud Cost Considerations

When we architect an environment in the cloud, we build for current utilization, not for possible future utilization. With features like AWS Auto Scaling, we can leverage features included in the platform to scale up if needed.  Often, that means down-sizing existing infrastructure specs.  If a server rarely exceeds 8GB RAM utilization, why pay for 16GB?  For clients where we’ve gone through this exercise, savings can be significant, often north of 20-30%.  To be clear, not all environments will recognize these savings, but many can. We also look at critical business applications.  Are there cloud native solutions for those applications?  From a cost perspective, these applications may turn out to be net neutral, but cost savings is seen through reduced administrative overhead (things like version updates, changes in data structure, etc.) and the elimination of redundant infrastructure needed for disaster recovery.  From a managed services standpoint, shifting the infrastructure support burden to the vendor for these apps allows us to spend more effort looking for ways to optimize the environment to continue to drive down costs for our clients. Leveraging cloud services is another mechanism for controlling spend.  Most cloud platforms are consumption based; you only pay for what you use.  For example, if you have a database that stores critical business data, you would have a database server, hosting a database platform (SQL Server or MySQL, for example), and then the requisite storage to hold that data, and likely a backup server with the same setup.  By setting up a cloud database service, like Amazon RDS, you have the option to setup a database across multiple availability zones for automatic failover, backups are automated in the background, and the price includes the appropriate licensing.  Again, you only pay for the resources you use, so costs are closely aligned to utilization. Additionally, understanding usage can help an organization determine not only what to purchase, but how to purchase cloud resources.  If you’re looking at an “always on file server”, it probably makes sense to purchase a reserved instance.  By reserving a resource for a year (or 3 in some cases), you can drastically reduce the price.  However, if you’ve got an on again, off again development environment, then don’t pay anything when you’re not using it, and pay the on-demand rate when you need it.

Tools for Cost Management

Managing these cost considerations can seem daunting, and potentially expensive to manage.  There is tooling that can help centralize cost considerations and recommendation.  Several tools scan your public cloud environment and look for dormant or under-utilized resources.  They then make recommendations, and in some cases, can even reallocate resources automatically to reduce costs.  For instance, we recently brought in CloudCheckr to help provide better visibility into our client’s environments and so that we can help clients optimize cloud spend.  Additionally, your service providers and partners should be able to advise on how to keep cloud costs under control. Managing costs in cloud environments isn’t a one-time activity.  Cloud platforms evolve quickly, and if environments aren’t tightly managed, costs could escalate quickly.  The upside is that a well-managed cloud environment will often deliver costs savings to the business, allowing for investments in innovation or improved profitability.  If you’re interested seeing what a move to the cloud would do for your bottom line, please reach out to West Monroe Partners Performance Services team for more information.

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