With Tightening Budgets, It’s Time Get More Out Of Your Cloud Investment

Now, with tightening budgets, companies are realizing that their rush to adopt and grow in the cloud has led to complexities and inefficiencies that are straining resources and budgets. Kevin McGrath, CTO, Spot by NetApp, discusses how you can still make your cloud investments work for you despite budget cuts.

Over the past few years, pandemic-driven disruption has dramatically accelerated adoption and expansion in the cloud. It should come as no surprise that spending on infrastructure as a service (IaaS) and Platform as a service (PaaS) technologies have increased almost 50% per year globally since 2019, according to an Amalgam Insights reportOpens a new window . 

As much as 70% of cloud spend is wasted. This is forcing companies to take a hard look at their cloud environment and ask: is it possible to continue to invest in the cloud without costs and complexity getting out of control? 

The short answer to this question is a resounding yes — enterprises can continue to adapt and grow in the cloud even in the midst of today’s uncertainties. In fact, utilizing the cloud efficiently can help them navigate a turbulent environment, lead to costs savings and ensure they remain nimble and agile to take advantage of new opportunities in the future. 

Here are four best practices for optimizing your cloud investment to provide a solid foundation for continuing investment in and growth in the cloud.

Right-Size Cloud Resources 

When it comes to sizing cloud resource needs, a tension exists between DevOps teams (and developers) who want to minimize any possible risk of performance or availability issues through overprovisioning and finance teams who need to keep costs under control. This makes the “rightsizing” of resources an essential tool in any IT organization’s toolbox. Rightsizing, however, can be complicated – requiring careful attention to detail, flexibility and, above all, agility to put just the right number of resources in place at exactly the right time. 

When done manually, capacity planning is, at best, an educated guess based on limited data, and that planning quickly becomes outdated due to ever-changing demands in production. This makes it necessary to not only use data and analytics to predict resource needs, but also to be able to dynamically adjust resources to respond to rapidly changing needs.  

By deploying solutions that utilize automation and advanced analytics to assess, predict and adapt to resource needs in real-time, organizations can successfully align resources with demand to achieve operational efficiency. That not only reduces costs by ensuring that enterprises only pay for the resources they actually need, but it also makes developers and DevOps teams more efficient and productive by eliminating cumbersome manual tasks to assess, monitor, and modify resource capacity.  

Another option available to teams is burstable instances, which are instances that provide a base level of CPU performance with an option to burst for short periods of time based on necessity. Providing an additional way to minimize expensive underutilized resources, burstable instances are often useful for workloads such as small to medium-sized databases that typically only need a modest number of resources with occasional short spikes in resource needs.  

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Take Full Advantage of Cloud Pricing Models

Once you’ve optimized your existing resources, the next step is to take advantage of the appropriate pricing models. This is crucial for maximizing cost savings and efficiency without compromising performance and availability in the process. 

One option offered in most cloud environments is access to excess capacity at a discounted rate. Cloud providers aim to have sufficient capacity available at all times in their data centers for use in the event of surges in demand. When capacity exceeds the demand for resources, excess resources are made available for interruptible use at discounts of up to 90%. While these instances, often called ‘spot instances’ or ‘spot VMs,’ can be incredibly advantageous for their price points, it’s important to recognize that cloud providers can terminate spot instances at any time – whenever that capacity is required for on-demand resource requests.

That risk of interruption often leads to a belief that spot instances are useful for only a small set of non-critical workloads. However, deploying tools that can proactively address potential interruptions makes it possible to utilize spot VMs and take advantage of their cost advantages while ensuring availability and SLAs. 

Just the Right Amount of Commitment 

Another valuable pricing option includes cloud commitment purchases. Commitment purchases such as reserved instances and savings plans are provided by most cloud providers and offer 50-70% price savings in exchange for a sizable upfront commitment of one or three years. These saving plans typically work best when running continuous cloud workloads with consistent usage patterns – so any long-term pricing commitments can be made with a relative degree of optimization certainty.  

For companies investing in the cloud, discounted pricing in exchange for a long-term commitment seems like an easy way to optimize spend to stay within budget. However, purchasing options such as reserved instances and savings plans can lock you into long-term commitments with reduced flexibility that might fit your needs today but not tomorrow. Restrictions on instance type, region, and conversion are complex to navigate, and failing to do so can lead to inefficiencies and wasted investments down the line.  

Thankfully, there are solutions that technology leaders can use to can generate significant savings by using discounted resources as part of their overall optimization strategy. Using modern analytics, it is possible to increase utilization in order to right-size your resource stack. It’s important to first start by examining your existing capabilities to identify areas that might be underutilized. Then (and only then) should you consider long-term discount options. Once you sign a contract, you’re effectively obligated to pay for any cloud resources agreed upon at that moment – whether or not you end up actually using it.  

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Automate Continuous Optimization

An Achilles heel of most cloud optimization projects is that they happen at a specific point in time, generally driven by an urgent budget challenge. Although they can reduce costs at that time, the optimization becomes obsolete almost immediately as your cloud environment and demands on it evolve, diminishing the efficiency of your environment more and more as time passes.

Automation is critical to realizing the full benefits of optimization. Deploying solutions that connect continuous monitoring and analytics with automated resource provisioning and scaling makes it possible to ensure that your infrastructure can respond rapidly to changes in demand while maximizing the benefits of rightsizing, purchasing optimization and other best practices. 

Moreover, automated optimization simplifies operations and ensures that efficiencies are applied consistently and effectively across applications, deployments and environments while reducing workloads for IT teams. Utilizing automation tools that continuously analyze and optimize the cloud environment enables organizations to reimagine processes with efficiency and productivity in mind. 

Working through Uncertainty

With increasing uncertainty about budget and resources, it’s clear that IT leaders need to think critically about how to manage and control their expenditures – especially in the cloud. Enterprises have under or poorly utilized cloud resources for too long, but that is no longer an option. To address these pain points, companies leveraging the cloud must reimagine their existing processes with efficiency and productivity at the forefront, ensuring that their teams can get the most out of their cloud infrastructures for years to come. 

How are you reimagining your cloud investments? Tell us about it on FacebookOpens a new window , TwitterOpens a new window , and LinkedInOpens a new window .

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