Wasting Money on Cloud: 6 Ways to Stop

Cloud computing is being sold as a major cost saver for IT, but it's easier than you think to waste your budget on the cloud. Here are six steps to stop the bleeding and boost your bottom line.

Andrew Froehlich

June 19, 2017

5 Min Read
Wasting Money on Cloud: 6 Ways to Stop

One of the dirty little secrets regarding cloud computing is that there is a tremendous amount of waste that can occur.

Research from Right Scale, a cloud management firm, puts the cost of cloud waste at about 35%. In other words, for every dollar spent on cloud resources, you're throwing away $0.35. With IT budget remaining tight, it would be better to spend that money elsewhere. (See Cloud & Hosting Outpacing Traditional IT Spending – Report.)

If that's the case, it's no wonder many enterprise organizations are failing to realize cost savings of migrating to the cloud. To help get a better handle on your IT and cloud budget, here are six ways your department can stop wasting money on the cloud -- and hopefully start reaping the cost savings benefits instead.

1. Identify and retire abandoned applications
Since applications are so easy to spin up in the cloud, it's common to have them be forgotten -- yet continue to linger on. An app that once seemed promising but ultimately failed to produce the results you wanted might still be running inside an infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) or software-as-a-service (SaaS) environment despite the app being abandoned from a business perspective. Procedures that detail how to identify abandoned applications and approve them for decommissioning is a great way to stop this type of wasteful spending.2. Choose the right storage model
The amount of data that businesses are collecting these days is growing exponentially. One reason for this is the increasing number of low-cost cloud storage options available. The problem of waste sets in, however, when administrators choose a storage model that isn't the right fit.

After all, not all data is the same. Some of your data is frequently accessed, and must be stored on a storage tier that allows for rapid retrieval. That same data, as it gets older, may become less important to the business and therefore accessed less frequently. At this point, it should be moved to a lower-cost storage tier.

Figure 1: Pennies from cloud heaven. (Source: Bykst-86169 via Pixabay) Pennies from cloud heaven.
(Source: Bykst-86169 via Pixabay)

Cloud storage providers offer varying levels of hot and cold options for a variety of accessibility needs. The key is to identify the level of accessibility required, and move data into the proper storage models. It's also useful to automate the migration of aging data from a more expensive storage tier to one that's cheaper.

3. Right-size instances
"Bigger is always better" is the opinion that many application administrators take when it comes to choosing the amount of CPU, memory and storage to allocate to a virtual machine to run an application or database.

However, the resources allocated to an instance is overinflated many times over. It's important to train administrators to perform due diligence to right-size their cloud instances the first time. It's far easier to appropriately size instances on day one as opposed retroactively auditing and modifying instances after they are placed into production.

4. Perform licensing audits
On a regular basis, it's wise to audit your cloud resources to verify that the various licenses you have purchased, and that these agreements do not overly exceed current usage. Everything from operating systems to SaaS licenses to virtual appliances purchased through cloud marketplaces should be reviewed. Performing a thorough licensing audit using license management tools and strategies will help to eliminate wasting money on licenses you don't really use.5. Automate server usage for peak/off peak hours
If your company's applications are primarily accessed during specific hours of the day, you're wasting money if you keep all instances up and running on a 24/7 basis.

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One great way to cut costs of idle instances during hours of low-usage, is to create an automated schedule to turn them off when not needed. Most cloud providers offer scheduling tools to assist with this process. Alternatively, you can find plenty of independent cloud platforms that offer more robust scheduling tools, which work in multi-cloud environments.

6. Pay upfront
While a pay-as-you-go billing model might make sense for DevOps and pilot projects, it's likely that the applications and data you use in production will be a critical part of your business for years to come. For these types of cloud services, you'll find that you can often get a discount from the provider if you pay upfront for semi-annual, annual or multi-year contracts. If your organization is heavily invested in the cloud -- and you have available funding -- paying upfront can save you a bundle.

Are you a CIO or IT manager who has additional tips about saving money in the cloud? Let us know more in the comments section.

Andrew Froehlich is the President and Lead Network Architect of West Gate Networks. Follow him on Twitter @afroehlich.

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About the Author(s)

Andrew Froehlich

As a highly experienced network architect and trusted IT consultant with worldwide contacts, particularly in the United States and Southeast Asia, Andrew Froehlich has nearly two decades of experience and possesses multiple industry certifications in the field of enterprise networking. Froehlich has participated in the design and maintenance of networks for State Farm Insurance, United Airlines, Chicago-area schools and the University of Chicago Medical Center. He is the founder and president of Loveland, Colo.-based West Gate Networks, which specializes in enterprise network architectures and data center build outs. The author of two Cisco certification study guides published by Sybex, he is a regular contributor to multiple enterprise IT related websites and trade journals with insights into rapidly changing developments in the IT industry.

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