How to keep your cloud costs under control?

By Karan Kirpalani, Cloudhead, NTT Ltd.

The cloud has undoubtedly become a major force and is increasingly being used for any digital strategy. Not surprisingly, according to Gartner, end-user spending on public cloud services in India is projected to reach US$7.3 billion in 2022, up 29.6% from 2021. This is expected to accelerate over the next few years, with Gartner predicting that by 2025, 85% of organizations will adopt a cloud-first tenet and will not be able to execute their digital initiatives without adopting cloud-native technology.

Karan Kirpalani, Cloudhead, NTT Ltd.

While organizations benefit from the scalability and resiliency of the cloud, many organizations struggle to keep cloud costs under control. For example, Gartner predicts that by 2024, 60% of the leading infrastructure companies will face public cloud cost overruns. With the cloud accounting for a growing share of IT budgets and soon eclipsing on-premises budgets, it is imperative that organizations adopt an appropriate strategy and monitor cloud costs through appropriate controls.

We recommend some of the following steps:

Choosing the right cloud strategy

Depending on the landscape of the application portfolio, it is crucial to clearly define the phases before and after the migration and to document the IT inventory (apps, databases, networks, dependencies between apps, etc.) and the expected result. Without clear goals and understanding, this can result in higher post-migration operational costs. For example, a lift-and-shift approach may be best for some applications, while a refactoring approach may be best for some applications.

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Understand application dependencies using APM tools

For example, research firm Gartner predicts that by 2020, 75% of organizations will have implemented a multi-cloud or hybrid-cloud model. However, the hybrid cloud poses unique challenges for businesses. A hybrid IT infrastructure consists of multiple and sometimes separate IT applications that can cause service disruptions. As multi-cloud and hybrid-cloud adoption increases, many organizations find it extremely difficult to ensure performance and availability due to the lack of end-user experience visibility for both cloud and on-premises applications.

When infrastructure is deployed across multiple clouds, organizations struggle to get a comprehensive and unified view of application data. Not understanding application dependencies can result in migrations taking longer than originally planned, leading to increased costs.

This is where an Application Performance Monitoring (APM) solution can help, giving organizations the visibility they need into every business transaction for a specific application, which can span multiple types of cloud environments. This could include analysis of application performance issues that may be caused by the application itself or related elements such as the underlying infrastructure, middleware, databases or network.

By using APM tools, organizations gain full visibility into the performance of each application and dependency. You can also visualize the performance of end-to-end cloud applications in real-time and see for yourself how each application component, line of code, and key infrastructure resource is performing. Prior to a cloud migration, organizations can use APM tools to ensure all application dependencies and performance requirements are clearly understood.

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Right architecture for the cloud

Most organizations make the mistake of overestimating the capacity required in the cloud. For example, a common mistake is to replicate the same on-premises infrastructure to the cloud, which can result in additional costs. Rather than simply lifting and moving applications to the cloud, refactoring or rewriting applications to run better in the cloud can help save money in the long run. Organizations can also use APM tools to automate resource allocation based on performance for an accurate, consistent, and cost-effective approach to dynamically scaling instances. An application-aware delivery capability can help with appropriate delivery across the technology stack, whether it’s an on-premises, hybrid, or cloud-native architecture.

Monitor idle resources

Cloud waste is rampant, and many businesses have virtual machines sitting idle. By using cloud monitoring tools, companies can turn off their virtual machines when they are not in use. For example, instances that are purchased on demand (used for non-production activities such as development, QA, and testing) are often left idle at night and on weekends. By shutting down these instances when they are not in use, organizations can significantly reduce their cloud-related costs. This can be done using automated policies that shut down resources at set times. Similarly, cloud monitoring tools can also use predictive analytics to predict future capacity.

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In addition to the steps recommended above, organizations must also hold individual business units accountable for the resources they use. This can lead to proper usage as application owners learn to be more aware of their infrastructure usage. To help monitor and drill down to finer details, organizations also need to tag all cloud computing resources. Businesses can also use cloud monitoring dashboards to monitor and alert consumption patterns across departments. A managed cloud services provider can also be of great help. Most managed cloud service and solution providers have the experience and expertise to keep cloud costs under control, along with the necessary tools and technology.

Cloud computing is a game-changing technology when used properly. However, it can also be a costly endeavor if organizations lack visibility and control over cloud costs. We believe that by following the steps outlined above, your business can ensure cloud costs never get out of control.

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