One of the greatest benefits of cloud computing is the potential to save customers money on IT infrastructure costs.
The cloud’s pay as you go pricing model allows for operations and processes to be done online, which can dramatically reduce costs such as hardware upgrades and maintenance, running costs, and overheads.
Aaron Rees from Rebura, one the UK’s fastest growing AWS Service Providers, says that it is this simplicity that makes cloud computing so appealing to businesses looking to save money.
Aaron explains that the beauty of moving to cloud computing is that it’s all based upon a pay-as you-go model. This means that you don’t need to pay for infrastructure that you’re not using, and you don’t need to purchase servers that are overprovisioned to support growth.
“You only pay for what you use.” It makes perfect sense for any business to move to the cloud, especially if they have to replace hardware or new workloads.
Aaron Rees / Rebura
However, you shouldn’t lose sight of the fact that you could be paying unexpectedly high bills if you don’t properly monitor cloud costs.
A recent survey of cross-vendor cloud customers found that 64% of companies ranked optimizing cloud costs as their top priority. This is a surprising figure considering that companies without a proper plan for cloud cost optimization could be spending as much as 40%.
Here are some ways your business could be increasing cloud costs and how to avoid them.
Not taking advantage usage discounts and reserved instances
Many big-name cloud providers, such as AWS, Microsoft, and Google, offer plans that allow customers to reserve resources in advance and receive a substantial discount in return for their commitment.
AWS Reserved Instances are used by less than half of AWS customers. This allows users to reserve chunks of compute capacity up to three years ahead of time. Microsoft Azure’s reserved instance offer and Google’s committed usage discounts of 23% and 10% are less popular. Customers can also bid on shorter-term discounts with some vendors like AWS Spot instance.
You will be charged for reserved instances if you use them. However, if you are certain that you will have a long-term need for the resource, you can access it at a reduced price.
These reserved instances can save customers as much as 90% over using on-demand resources. However, they are not suitable for all workloads so be sure to read the terms and conditions before you buy in. These instances are often not guaranteed, which makes them unsuitable for work that runs around the clock. These can be a great option for handling demand spikes or occasional workloads.
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Not researching all of your vendor optionsMultiple-cloud or single vendor: Which is the most cost-effective? There is no one right answer. It all depends on the services you use and how much resources you require. It is important to explore all options available to you.
You can get the best price by having your eggs in several baskets. If you don’t have to stick with one vendor, you can shop around for the product that is most valuable and not be bound to one vendor. It’s a good strategy, used by 84% of businesses.