DevOps Challenges Every B2B SaaS Must Overcome To Succeed: Optimizing Costs in the Cloud

  • April 27, 2021

When you consider the growing demand for cloud services, paired with increase availability and variety, the costs incurred by businesses are sure to rise. Your company may have even started migrating more services to the cloud to take advantage of the budget flexibility the cloud offers. In fact, the main reason for 47% of enterprises’ cloud migration is cost optimization.

Moving to the cloud can improve the bottom line for your company. Keep in mind; it will not eliminate all of your costs. By most estimates,about a third of a company’s IT budget goes towards cloud services.In order to optimize your costs across the board, you must first understand and learn how best to control them in the cloud. The goal is not to reduce spending but to optimize spending. As your business grows and you acquire more clients, your costs will most likely increase. However,if those costs are optimized, profits will undoubtedly improve.

Cost Impact

The cloud can offer unlimited scalability. It can also lower your IT costs by only charging for what you use. At the same time, it is important to know that you are really paying for what you order. Up to 70% of cloud costs are potentially wasted, either due to poor adoption or underutilized features. It’s critical for your business to understand the impact of the cloud on the bottom line.

Start analyzing the impact of the cloud by defining a business metric that will help you understand costs. THIS IS KEY. Examples of metrics you could be tracking include cost per pageview, cost per client, etc. Once you have a clear picture of the metric or metrics you need tomeasure, you can create a cost report to help you understand how and what you are spending on the cloud.

Optimize Your Process

Now that you have defined your metric, it is time to start optimizing. The report you have created will track current usage as well as its evolution. There are several best practices you can put into place to get optimization underway.

Three Phases of Optimization

Before you begin, you will want to break the optimization process down into three phases:

1. Analyze
The first phase of cost optimization is analysis. During this phase, work towards understanding your current spending and focus on reporting. You will want to compare current resource utilization vs. current expenditures to get a sense of how your resources are being used.

2. Optimize
At this point, you will apply the parts of optimization. These include financial, infrastructure, and application. AWS Savings plans can help you save on costs related to your cloud services. To address infrastructure optimization, use Spot Instances, Preemptible, AWS S3 lifecycle, Right-Sizing, and automation. Automation involves using on/off and stopping resources that you are not using during specificperiodsin the week, month, etc. Lastly, you will want to look at Applications via application architecture reviews, serverless, microservices, multi-tenancy, cacheability, assets optimization, and storage utilization.

3. Operate
When you begin this phase of the optimization process, you will continuously monitor and keep the optimizations up to date. This is not a one-time activity. Cost optimization is an ongoing process. Your company will want to conduct regular cost reviews to help measure and predict your needs.

Resource Tagging

Tagging is an additional tool that will help you understand the costs and your general reports. Label or tag each user-defined key to making it easy to search for and manage resources based on criteria such as owner, environment, or purpose. You can use cost allocation tags to help track your costs on a detailed level. This will make your reports easy and efficient to use.

As more and more businesses migrate their operations and services to the cloud as a means to optimize business costs, they will be taking a closer look at spending in the cloud. If you are one of these businesses, you will want to put tools in place to further optimize predicted cloud costs. Doing so means you will be able to dynamically respond to your cloud needs and scale on demand. The time to take action and optimize cloud costs is now.