Factors Driving Up Your Cloud Costs

Gartner forecasted that worldwide end-user spending on public cloud services would grow 20% this year. As part of that increase, small & midsize businesses are spending 38% more on cloud computing than they did in 2021. Industry reports show that 48% of businesses store their most important data in the cloud. We’re growing increasingly dependent on cloud computing, and that means costs rise with that growth. We’ve written about cloud economics before, as it’s always important to our clients and associates. As we wrap up another year, it’s worth having a look at the factors driving up your cloud costs. It can help with year end reviews and new year planning.

You Have Runaway or Forgotten Compute Processes

It’s not uncommon for developers to spin up an environment to build something new…and then never take it down. In one case. we saw a small customer’s AWS bill spike when a large database environment was left intact, long after the test was completed. Month-over-month comparison of cloud bills can be tedious, so customers have a variety of third-party tools to choose from. Conducting regular cloud expense reviews alleviates the potential for long-forgotten runaway expenditures.

Variable Costs

Many cloud-related costs vary, so it’s essential to keep an eye on variation in your monthly billing. If you typically spend $1,000 to $2,000 for storage and your cost spikes to $5,000, you’ll want to be aware of it. A simple mistake, like leaving unused machinery running, can lead to unnecessary bills.

You’re Accumulating More Data

Once data is in the cloud, it can be expensive to get it back out. Having data available for audit costs money, and you can take advantage of storage tiers based on your access needs. Multiple copies of data stored in the cloud adds to expense (an issue we find too often, with “backups of backups of backups”). Plan your data retention policies and follow them.

You’re Leaving the Lights On

For some workloads, it can be more efficient to automate starting and stopping instances, thus optimizing costs for peak workloads and idle time. We’re embracing more serverless applications today, which alleviates this problem altogether!

Wrong-Sized Computing Services (Overprovisioning)

Right-sizing is the process of analyzing computing services to choose the most efficient size for each instance. When we work on environments, we’re always watching for “redlined” machinery. It’s obviously good to use the smallest instances possible, but too small, and you’ll end up with downtime. Too often, organizations overprovision, though, which ensures uptime but can be wasteful. Striking a balance on utilization is a key to cloud cost management.

You’re Foregoing Discounts

By planning ahead, you can lock in better rates. An annual or multi-year commitment for cloud computing isn’t a risky proposition like it may have been ten years ago. We’re locking in! One of our most popular articles over the years covers reserved instances. Since we originally published that, we’re using other options, like savings plans, that are more flexible over time. No matter what approach you take, you can clip a good percentage from on-demand pricing.

You’re Spending More on Security & Compliance

Cybersecurity costs rise in conjunction with more adoption of cloud services. As cloud adoption increases, so do vulnerabilities and data breaches. The more data an organization keeps in the cloud, the more expensive it is to monitor traffic and protect the data. Initially, keeping an eye on how much data you store can help limit expenses. You can also look for redundant cybersecurity solutions that you’ve implemented (layering systems over systems over systems).

Factors Driving Up Your Cloud Costs

As cloud adoption grows, so do costs. Some argue that cloud computing costs more than “the old way”, but it’s really a comparison of apples and pears. Cloud computing enables more collaboration, innovation, and flexibility. We view it as an investment, and like any investment, you can’t afford to set it and forget it. Regular reviews, especially in the areas we outlined here, can optimize cloud expenses while reaping the many benefits.

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