Cost optimization
Why is multi-cloud cost optimization so tricky? Learn how to get it right
59% of businesses use over three tools to manage and optimize their cloud. Yet 49% struggle to keep costs under control and 33% overrun their budget.
Why does this happen?
These numbers are from G2 and they prove that effective multi-cloud cost optimization remains elusive for many organizations.
Why is it so difficult to manage cloud costs despite the abundance of tools?
With multiple providers come unique difficulties. Complex pricing models and a lack of transparency can fog the murky world of cloud cost management.
And yet there are clear benefits from having more than one provider.
In this article, we’ll help you find the balance. We’ll cover the benefits of a multi-cloud approach, the multi-cloud challenges, and some actionable strategies for cloud cost reduction.
Read now and discover how to make a multi-cloud approach work for you.
The benefits of a multi-cloud environment
Adopting a multi-cloud approach could be the secret sauce you need to optimize your cloud spending.
The benefits go beyond simply saving money.
So what are they exactly? Let’s go through them one by one.
Lower your cloud costs
Bringing down cloud cost is probably the number one reason why you should consider a multi-cloud environment.
It allows you to choose the most cost-effective solutions for specific tasks.
For example, let’s imagine a company has two major tasks: data storage, and high-performance data analysis.
For data storage, the company may choose a cloud provider like AWS as they provide lower storage costs for a large amount of data with services such as Amazon S3, and offer opportunities for AWS cost optimization.
For high-performance data analysis, they may choose a service like Google Cloud as it has data analytics tools such as BigQuery.
By splitting these tasks up they get the best deal for each task rather than using one provider and having a higher overall cost.
Greater control and flexibility
With a multi-cloud approach, you’re not tied to just one provider.
You’re provided with more choices and opportunities for greater cost optimization.
This gives you greater control of your cloud strategy and greater flexibility.
For example, let’s say your current cloud provider increases their cost over a service. If you have a multi-cloud approach, you can look to your other provider and see how their cost compares.
If the other is cheaper and offers the same performance, you can consider switching that particular service.
Minimising downtime through multi-cloud resilience
When you’re tied to just one provider, you are subject to when their systems go down. This can be particularly bothersome when you have critical operations that need running.
However, just because one cloud has gone down it doesn’t mean other providers have. When adopting a multi-cloud approach you can redirect your computing needs to another provider and keep your operations running.
In November 2020 there was a significant AWS outage that led to major disruption. Big companies such as Adobe experienced major downtime during this disturbance.
By relying on just one provider it can have huge ramifications for your business.
Access to best-of-breed technologies
When you have a multi-cloud approach you can choose the best provider for the specific workload you need doing.
Different providers excel in different ways such as speed, performance, security, and compliance. Based on your goals as a business one will be more suited to you than another.
If you’ve decided on the multi-cloud route you can mix and match the workloads that need doing based on specific requirements.
For example, you may use AWS for data storage, and Google Cloud for machine learning.
Each provider excels over the other in different ways.
Improved performance and lower latency
Global businesses can reduce latency by utilising servers in different locations.
Servers closer to your customers result in faster data transfers, improving overall speed and performance.
For example, AWS might be a great option for targeting customers in North America, while Google Cloud can provide better performance in Europe. By selecting cloud providers with servers closest to your target regions, you ensure better user experiences globally.
Enhanced security and compliance
A multi-cloud approach can strengthen your security and regulatory compliance across different regions.
Businesses can make use of the best security features from various providers.
For example, with just one provider, you’re stuck with only their security features. Using multiple providers you can make choices based on specific security strengths.
For example, one provider may provide excellent encryption. Another provider might specialize in advanced identity management.
Rather than just stuck with one, you can make use of both.
This is especially useful if you need to comply with different standards and regulations, such as GDPR in Europe and HIPAA in the US. Businesses can tailor their compliance to meet local laws and regulations.
The challenges of multi-cloud cost management
It’s not all smooth sailing.
If you’re unaware of the multi-cloud challenges your strategy could trip you up.
Here’s what you need to prepare for.
Fragmented visibility
A big problem with utilizing a multi-cloud approach is the lack of visibility in your total spending.
Cloud providers each have their own dashboards to show what you’re using and how much you’re spending. When you use more than one provider it becomes difficult to know how much you’re spending in total and what for.
The lack of a unified dashboard can hinder visibility. Hidden costs can crop up leaving you unsure where they came from.
Complex pricing structures
Different cloud providers have different pricing structures.
One may charge by hour, another may change by request. Some will offer discounts, such as reserved instances, and others will provide spot pricing.
Some providers also have a pricing tier based on region, while others provide flat rates.
This makes comparing costs across providers difficult. You may be unsure which deal is actually better.
This can lead to complications when trying to budget for multi-cloud costs.
Need for increased multi-cloud cost management
There is a greater need for multi-cloud cost management to track and monitor multiple activities and spending across different providers.
These teams need to get to grips with more than just one platform and report across the board.
Teams also have to come together to maintain tags, policies, and alerts, as well as correctly integrating third-party tools.
That is a lot of extra resource, time, and potential staff spending that’s required
Security and compliance concerns
Many cloud providers apply a “Shared Responsibility Model” when maintaining their cloud security.
This means that the vendors will provide their own platform-layer security, while the users will apply steps to secure data and applications.
With multiple cloud providers to consider, businesses have to manage many different dashboards when adhering to the best security and compliance practices.
This can get complicated and time-consuming.
Increased operational complexity
When you have to monitor, log, and troubleshoot in a multi-cloud environment things can get complicated.
Each provider have their own tools and policies that users have to learn and get to grips with.
As they’re all different it can complicate the operational process. This can lead to increased inefficiencies and additional costs.
Limited vendor tools
Tools from vendors are designed to work within their own ecosystem. They are not designed to be used in conjunction with other cloud vendors.
This can lead to organizations having to look to third-party tools to integrate multiple cloud platforms. These come at a cost, both financially and operationally.
They require being set up and maintained, and of course, you have to pay for them.
This can add an extra layer of complexity when it comes to using more than one cloud platform.
Lack of skills
Managing multiple cloud platforms requires a high level of skill.
Learning the ropes for one platform can be technical enough. Having additional platforms to learn requires more time and skill.
Finding someone who has these skills already can prove very difficult and as such can potentially increase training and operational costs.
Approaches to multi-cloud cost optimization
Take control now of your cloud spending.
These proven cloud cost reduction strategies will slash your multi-cloud costs without sacrificing performance.
Utilize automated resource management
Automated resource management monitors and adjusts your cloud resources.
This is based on real-time demand, usage patterns, and performance needs. It’s an automated function, meaning you don’t have to tinker with it yourself, but simply leave the software to do its magic.
It can scale your cloud instances up or down, resize resources, or even shut down unused instances.
Say for example an e-commerce company experiences a higher amount of traffic than usual sparked by a sale. The automated resource management tools will be able to accommodate this increased demand and increase the necessary server instances.
Once traffic is back to normal, it will be able to scale it back down.
This improves cost efficiency, allowing you to pay for only what is needed. It also reduces human error and allows staff to get on with other tasks.
Regularly audit your costs and enhance multi-cloud cost forecasting
Cloud cost auditing is when you review your cloud expenses and compare them to how much those services are used and how well they’re performing.
This allows you to spot inefficiencies or unnecessary spending.
A typical audit would include reviewing billing data, usage reports, and performance metrics.
When you compare usage against costs you can:
- Identify trends
- Spot surprising expenses
- Make informed decisions on resource allocation
These audits can be automated, further freeing up time.
It also helps with multi-cloud cost forecasting. This is when you can predict future cloud cost expenses. By analyzing the data you can spot trends and predict what’s to come.
An example could be when a software company review their cloud bill and spots that a development environment has been left continuously running. This will add unnecessary costs.
Through this audit, they will be able to shut this down saving money and avoiding overruns.
Shutting down unused resources
This refers to any resources that are not being used and turning them off. For example, you may have servers or instances that are sitting idle, eating away at your money.
You have to turn them off. It can add a hefty amount to your bill.
You can utilize cloud monitoring tools or conduct manual reviews to detect any resources that are sitting twiddling their thumbs.
Once turned off you will save money and improve your efficiency.
Use reserved instances for consistent workloads
A reserved instance is a saving plan that can save you money.
They allow customers to reserve resources long-term, usually around 1-3 years.
If you have a workload that is predictable and consistent, this is a great option.
Perhaps a financial company knows it needs certain cloud services to run core banking functions. By committing long-term, they can reserve instances for this predictable workload and take advantage of the lower rates.
This is a cost-effective solution for a business that needs consistent resources.
Utilize spot instances
Spot instances are compute resources offered at a reduced rate. However, they can be interrupted at any time with little warning.
They are best for flexible workloads that can tolerate interruptions.
Due to the risk associated with spot instances, their prices are typically much lower than those of reserved instances and on-demand. Spot instances are, therefore, suitable for non-critical tasks that can handle being paused.
A data analytics company may use spot instances for large-scale data processing that aren’t time-bound. If the spot instance is interrupted, the company simply pauses the job and can resume later on.
Multi-cloud cost reduction services
Cloud spending can reach 10% of your revenue.
These prices can feel ever-increasing with no end in sight.
When you try to manage the costs you start to feel overwhelmed. Your cloud credits are running out quickly, the pricing models are unpredictable, and you can’t decide between long-term contracts or hourly rates.
When you’re spending too much time optimizing your cloud usage than anything else, Spendbase can help you cut cloud costs by up to 60%!
Spendbase services can help you navigate the complexities of cloud spending, ensuring you get the most value for your investment.
We offer group buying, tailored discounts, and expert cost-saving strategies. No long-term commitments are needed.
Takeaways
Managing cloud costs is no easy feat, but it’s not impossible either. With the right strategies in place, you can turn complexity into an opportunity for savings and agility.
- Unlock new savings by matching tasks to providers. Use the most cost-effective cloud for each workload—like AWS for storage and Google Cloud for data analysis.
- Leverage multi-cloud to sidestep vendor lock-in. Switch providers when prices spike without missing a beat.
- Keep your systems running, even during outages. Redirect workloads to another provider if one goes down, ensuring minimal disruption.
- Tap into the best tech across providers. From analytics to security, mix and match services to get best-in-class tools for every job.
- Boost performance by localizing workloads. Place servers near your users to cut latency and enhance their experience.
- Tailor security across clouds. Use each provider’s strengths to meet diverse compliance and security requirements.
A multi-cloud strategy offers flexibility and performance boosts, but it’s not without its challenges. With careful planning and strategic management, you can unlock the potential of your cloud infrastructure without letting costs spiral out of control.
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