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Are Cloud Costs Mysterious? Cloud Resource Costs Explained – Part 2

Meg Matich

cloud-resource-costs-explained-part-2-dimensions-1024x576 So you got through the first article in the series? Congratulations, it's the longest one! In it, we took a detailed look at how many different elements go into pricing cloud resources‚ Availability Zones, performance SLAs, drive types, and tenancy types, to name a few. We also explained different ways to reduce your costs, including pre-provisioning resources instead of buying more expensive on-demand instances.

Do you want to do a better job of managing cloud costs? Most organizations do. Analysts and industry experts report that a quarter of cloud spending is misapplied — spent on overprovisioning, ghost resources, and using high-performance drives for low-performance workloads. And those are just the obvious problems. More subtle problems are harder to find and fix, so wasted expenditure is probably even higher.

If cloud cost optimization is one of your top priorities, you and your dedicated cloud teams (responsible for driving optimized cloud architectures and cloud management) could benefit from some proven ideas and tools for making the job easier. That's why, in this post, we’ll explore best practices for cloud cost management while seeing how one of our tools, NetApp® Cloud Insights, can expose cloud cost inefficiencies across your entire cloud infrastructure, including hybrid and multicloud. We’re here to help, and we have a track record of helping companies reduce their cloud costs by as much as one-third. 

Best Practices for Managing Your Cloud Costs

In the last post, we exposed some of the mysteries of AWS pricing. But let's face facts: Tracking all the moving parts isn't easy. There are some ways to mitigate that challenge — let’s dive in.

Common Management and Billing Practices

The first best practice is to begin with your cloud strategy. You’re tasked with upholding cloud strategy across the organization, and the expression of your strategy is governance. Governance procedures and processes are so important to managing costs — they are the foundation for optimized cloud utilization. They also maintain consistency across every department and division, and they identify outliers, noncompliant users and workloads, and opportunities for improvement — all of which help you to manage spending.

Most smaller organizations don't think about the word “governance” when they describe what they do, but the basic principles of governance apply to any organization: 
  • Any organization should spell out the workloads that must live in the cloud, workloads that might live in the cloud, and workloads that should not live in the cloud. 
  • Any organization also creates and manages a cloud budget.
  • The organization gives administrators various levels of authorization.
  • The organization sets responsibilities for overseeing utilization. 
  • The organization creates and manages reporting, both inside and outside the cloud team.
Many organizations distribute ownership of cloud spending across different departments and lines of business. If that's your approach, the fifth principle of governance — reporting — has to be in place right away. Reporting gives every owner and influencer the visibility into expenditures they need, so they can observe and control cloud costs easily and consistently.

Resources for Cloud Cost Management

Of course there's visibility, and then there's visibility. Every major cloud provider offers a set of billing capabilities that provides every detail, but often it's easy to get mired in the data. For example, AWS provides the AWS Cost and Usage report. It's released three times a day as a CSV file that's dropped in an Amazon S3 bucket that you specify. With it, you can view the cost of every parameter by the hour or by the day. Each line item describes a charge for a particular service or resource. Once a month, you receive an invoice based on the report.

For Reserved Instances, the report spells out reserved but unutilized capacity as well as actual costs. If you have multiple AWS accounts, you can consolidate billing into a single report and single invoice. By linking all member accounts into a master account, you can pay for all charges centrally and get more volume and Reserved Instance discounts. At the same time, any member account can get its own bill to manage utilization and chargebacks.

Amazon does try to make it easy to understand and use the report, but these reports are huge. They aren’t easy to consume, so it's hard to use them for governance, reporting, or actionable insight. Cloud providers recognize this problem and try to help with toolsets for resource utilization visibility and management. The AWS Billing & Cost Management console is a good example. It’s helpful, but other tools offer other advantages that the cloud vendor tools can’t — including multicloud and hybrid cloud support.

Reduce Overprovisioning

As you know, cloud comes with pros and cons. On the one hand, cloud is a fantastic tool for keeping up with dynamic business requirements without the delays and complexity of manual infrastructure provisioning. It's easy to self-provision, fast, and flexible, and your organization probably relies on that flexibility to speed development and production, thereby accelerating time to value. On the other hand, all that self-provisioning speed and flexibility can wreak havoc on budget management and security requirements. Without some controls, you might find yourself in an IT “Wild West” where anything goes — and you’re left footing the bill. 

But too much control stifles innovation. You need to strike a balance between a free-for-all and rigid, centralized control. The key to this balance is understanding. Your job is to discover and support your organization's cloud use cases. Providing approved resources — workflows, templates, and service catalogs — gives your users the speed and flexibility they need, while giving you a framework for controlling spending. There are many ways to provide approved resources, such as the trend toward infrastructure as code (IaC). The cloud providers provide IaC resources (for example, AWS CloudFormation), but you can also use third-party IaC technologies such as Chef, Puppet, and Ansible if your users prefer them.

Cloud Insights: Gather, Review, and Act on Your Cloud Costs

These best practices make a difference. But it's still hard to gather, review, and act on all the aspects of your entire cloud infrastructure that are driving up costs — including subtle problems such as underused compute or storage resources. To help, NetApp developed a tool called Cloud Insights. It's a managed service that improves discovery and control across your entire cloud infrastructure, whether you're using a single cloud or have complex, hybrid, multisite, or multicloud infrastructures. With Cloud Insights, you can take new actions to drive down cloud costs by as much as 30%.

Cloud Insights works across virtually every on-premises or cloud infrastructure platform. It collects a single, vendor-agnostic view of all your cloud assets and their usage patterns. It highlights cost-control opportunities for any stakeholder across your organization. Any authorized individual, project owner, or department can view the dashboards and use the point-and-click interface to discover how much money is being spent (or misspent), where that's happening, and who needs to be gently encouraged to reduce their expenditures.   Built with pre-scripted workflows that offer immediate benefit, Cloud Insights saves you from days of spreadsheet review. It offers:
  • Overprovisioning discovery. Discover the costs of every application and connect the costs to every owner within a single dataset. You get unprecedented insight into overprovisioning waste across all cloud infrastructures, so you can identify problems, engage with owners, and track improvements.
  • Spend analytics. Analyze the costs of your resources, whether on premises or in the cloud, to determine where waste is most common, if there are particular offenders, and whether you can save money by moving workloads to a different type of infrastructure.

Conclusion and Offer: It’s Time to Make a Difference

Solving the mysteries of cloud spending remains a complicated problem, and we’re aware that it’s hard for you. But we think we have a distinctive capability that can help. That’s why we’re offering a free trial of NetApp Cloud Insights for any organization that wants a new way to reduce cloud costs. Our approach can drive down your cloud infrastructure costs today — why not give it a try?

Meg Matich

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