An organization’s Chief Financial Officer (CFO) often faces difficult decisions that balance the health of the IT environment with budget constraints. They must ensure that a company’s business needs are met with IT solutions that align with its financial realities. Many businesses migrate to the cloud in the hope of reducing the costs of their on-premises data centers. They may find that controlling costs is more challenging than they anticipated.
Companies supporting a cloud presence can be susceptible to cost overruns for several reasons. They may lack the technical skills to manage the environment efficiently, leading them to pay for unused capacity or unnecessary services. Teams may have the skills but be unable to reduce costs due to the limited resources available through their cloud-provider contracts.
Today’s complex, hybrid, and multi-cloud environments offer opportunities to implement cost-optimization strategies while maintaining performance and operational efficiency to meet business requirements. This post examines practical approaches to optimizing costs that your CFO will love, while keeping the IT team and business leaders happy.
Right-Size the Environment
Right-sizing is the process of aligning cloud resources with a company’s actual workload requirements. The goal is to stop paying for underutilized services and resources, such as compute or storage capacity. Companies can quickly achieve significant cost reduction with an effective right-sizing initiative.
Teams looking to right-size a cloud environment should adopt a methodical approach that includes the following steps.
- Collect accurate usage data for metrics including CPU utilization, network activity, disk throughput, and storage growth.
- Remove idle or orphaned resources such as old snapshot backups, inactive virtual machines, and oversized test or development environments.
- Analyze workloads to align requirements with an appropriate cloud solution. For example, steady-state applications with consistent usage patterns can utilize reserved instances to reduce costs. On-demand instances are more expensive and should be used for variable workloads.
- Analyze instance usage and downsize based on utilization. Teams should look for CPU, Memory, and I/O utilization that is significantly below the provisioned resources.
- Tune autoscaling to quickly scale down so you only pay for the resources you need at any given time.
- Monitor and revisit right-sizing activities regularly to address changes in the environment and new opportunities from cloud providers.
Optimize Data Retention and Storage Tiers
Storage is often responsible for unanticipated costs and budget overruns. Companies can take multiple measures to substantially reduce data storage costs while still making data available to support business operations. The following steps illustrate some of the most effective ways to optimize storage costs.
- Organizations should classify data according to access patterns. Application data and other frequently accessed information should reside in hot storage that is immediately available. Less frequently accessed data, such as backups and analytics datasets, can be stored in cooler storage, which is accessible with a slight time delay. Teams can archive long-term data and compliance records in low-cost, cold storage tiers.
- Teams should define data lifecycle and retention policies that automatically move data to the appropriate storage tiers based on usage. Data should never linger in more expensive tiers and should be deleted automatically when retention periods are reached.
- Companies can utilize data compression and deduplication techniques to reduce their storage footprint. Teams may struggle to gain the visibility needed to perform effective deduplication in multi-cloud environments.
- Many businesses store a significant volume of unnecessary data. Teams need to perform a comprehensive analysis of storage usage to identify items that can be deleted. Prime candidates for deletion include data from retired applications, duplicate backups, and obsolete logs that are not needed for compliance purposes.
Select the Right Instance Types
Cloud providers typically offer different instance types to address varying customer needs. Teams can significantly reduce costs by aligning workloads with the right instance type. CFOs will enjoy more predictable budget forecasting when cloud instances are utilized more efficiently. Most providers offer long-term contracts for reserved instances to further reduce costs.
Long-running, stable workloads that do not require on-demand resources should run in less-expensive reserved instances. Companies can take advantage of the reduced costs of spot instances for less critical workloads. They can run batch jobs and perform tasks like machine learning training when spot instances are available.
Engage a Managed Service Provider
Companies can often dramatically reduce costs by engaging a third-party managed service provider (MSP). In many cases, partnering with the right MSP results in both cost savings and performance gains that support business growth. The following benefits of working with an MSP can help reduce IT costs.
Lower staffing costs
Decision-makers can immediately reduce costs by leveraging the MSP’s technical staff rather than hiring in-house experts such as cloud architects or engineers. The MSP can provide 24/7 coverage, and its team approach protects you from turnover risks.
Cloud resource optimization
An MSP with extensive cloud expertise can significantly reduce costs by optimizing the environment. They can help right-size the environment and develop an efficient data retention plan. The MSP’s cloud experts can recommend innovative solutions that boost performance while controlling expenses,
Reduced downtime
CFOs understand the cost of downtime and its effects on the business and customer service. The technical skills of managed service teams minimize downtime by proactively addressing issues before they become problems.
Enhanced resilience
Businesses can protect themselves from expensive, long-term outages with the disaster recovery and business continuity solutions offered by MSPs. In-house teams may struggle to recover complex, multi-cloud environments. A reliable MSP will provide comprehensive disaster recovery strategies to safeguard your business.
Partner With Vast for a Happy CFO
VAST IT Services has the experience to optimize cloud costs and maximize your budget, letting you get the most out of your cloud resources. We have strategic partnerships with industry-leading cloud and data protection vendors that allow us to identify the most efficient solution for your company’s unique requirements. Our proprietary VAST View cloud management platform streamlines and optimizes every phase of the cloud journey from discovery and migration to governance and orchestration.
Get in touch with our team today and let us help you save cloud costs and lighten the load on your beleaguered CFO.
