The challenges of optimizing your cloud spend in 2022

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There’s a misconception that being in the “cloud” automatically means you save money. In fact, in 2022, one of the key initiatives that many companies are looking to achieve is to reduce cloud costs. A 2021 State of the Cloud report by Flexera reveals that 61% of companies planned to optimize their cloud-related costs.

“Respondents estimate that their organizations waste around 30% of their cloud-related spend,” Flexera added. As a result, these companies struggle to effectively optimize their cloud-related costs.

In fact, a report from McKinsey states that “about 80% of companies view cloud expense management as a challenge.” But what is the main cause of this problem? Read on to discover the top cloud cost optimization issues and learn how to solve them.

Related: The New Normal Is Here to Stay: Businesses Will Only Grow on the Cloud

Types of Cloud Computing Services

  • Containers as a service: This type of service enables simple, scalable, and secure management of containerized applications owned by an organization.

  • Platform as a service: It is a platform-based cloud computing service that allows organizations to easily build, run, and manage applications.

  • Multicloud as a service: It involves the use of cloud computing services from various cloud services, platforms or software.

  • Runs as a service: This cloud service allows you to perform coding to respond to events without using complex infrastructure.

  • FinOps as a service: It is a cloud service that creates a culture of fiscal responsibility across all of an organization’s cloud services.

Related: Cloud Technology: How Big Businesses Can Increase Efficiency

Bare metal vs cloud servers

The installation of the bare metal server, also called physical or dedicated server, takes place in a controlled and highly supervised environment. In contrast, the cloud server shares its hardware resources with other companies.

Although both types of servers have the same base speed, bare metal servers will outperform shared servers, due to their physical and direct access to processing resources.

A shared server uses a block of network-attached (shared) storage, while bare metal servers use its local storage. But they can all use hard drive and flash or SDD storage.

A bare metal server is more expensive than a shared cloud server in terms of cost because a bare metal server user has to pay for idle hardware resources as it is dedicated only to support specific users.

Below, I’ll discuss the top five cloud cost optimization problems to avoid and how to solve them:

1. Be persuaded by savings plans, start-up loans and reservations

Organizations opt for reservations or savings plans because of their impressive discounts compared to those listed on an on-demand pricing model. While this sounds like a great initial offer for your cloud spending, you may need to commit to the discounts for a few more years. This undermines your cloud cost reduction goals. On the other end of the spectrum, many public clouds offer free credits to startups, knowing that they will more than offset the credit with long-term use.

The best option is to avoid reservations and savings plans. Also, don’t buy resources in advance and instead opt for approaches such as:

  • Automatic scaling

  • Bin packaging

  • Resizing

  • Resource planning

2. Oversupply

Over-provisioning involves choosing more resources than you actually need to support your business workloads. This results in wasted cloud costs and uncontrollable but unnecessary expenses. Investing in custom monitoring, cost management solutions, and right-sizing can help reduce reliance on oversized resources to save on cloud-related expenses.

3. Ineffective management of peaks and dips in demand

You can apply cloud cost management solutions like automation to help you monitor your cloud spend and better manage this issue.

4. Delayed Implementation of Automated Cloud Optimization

Cloud automation is quickly becoming the new tech industry standard. This helps reduce the manual effort required for enterprises to configure virtual machines, select the right resources, create clusters, etc.

According to McKinsey’s report, “Fear of being replaced by artificial intelligence is endemic among workers.” However, automation brings many benefits like freedom to choose application types and sizes, better management of demand spikes and drops, reduction of unnecessary expenses, etc.

By delaying cloud automation, you will miss out on these benefits. The best solution is to overcome your resistance to change and embrace automated cloud cost optimization.

5. Missing Opportunities Offered by Spot Instances

Cloud service providers provide Spot Instances for a specific duration. You may never know how long these offers will last. They can also give you a short notice of 30 seconds to 2 minutes, denying you enough time to react. Cloud automation can help you take advantage of Spot Instances even when you’re unavailable.

Conclusion: New Market to Solve the Problem — Intelligent Workloads as a Service

Intelligent Workloads-as-a Service (IWaaS) is a new way to solve the problem, using predictive and reactive analytics along with bare metal performance to stop overprovisioning and incredibly affordable multi-cloud computing service. It offers your business the opportunity to experience seamless performance with up to 60% boost. Dave Wattel, CEO of an artificial intelligence software company, has recognized this need for more transparency in his businesses, and cloud spending has been instrumental in finding a solution to address these issues and have also been a leader in the IWaaS space.

You’ll also benefit from improved developer efficiency by reducing repetitive tasks associated with traditional clouds.

Related: Inviting Change: Four Steps to Enable a Cloud Transformation in Your Business