Here are tips for cloud migration with effective cloud cost management.
COVID-19 forced many companies to shift to the remote work models nearly overnight which also pushed them towards rapid cloud adoption to ensure the availability of a secure, reliable, scalable, and cost-effective infrastructure capable of meeting these demands.
Recent data indicates that cloud technologies are now embedded in enterprise strategies, with 92% of organizations reliant on some form of cloud for their IT environment.
However, despite the desperate need for quick and effective cloud migration, as many as 65% of IT leaders continue to cite “cost management and containment” as the biggest pain point of running cloud technologies and applications.
Many organizations reported over expenditure to the tune of nearly 40% more than their estimated budget for cloud migration with 30% wasted on unused resources. In this article we will explore the various methods for effectively managing cloud migration costs. For companies looking to implement effective cloud cost management, they can always reach out to IT Support New York City.
What Are Cloud Migration Costs?
While moving to the cloud is always more cost effective than the cost and risks associated with not doing so, organizations tend to spend a lot more than they need to on cloud migrations.
Just think of the hardware costs associated with maintaining an on-premise data center, as well as the costs associated with software licenses, maintenance, and support, and more.
Migrating to the cloud can cut off a lot of those expenses in the long term, but does require organizations to invest in an initial outlay for cloud migration. For an accurate estimate of cloud migration services for your business, please refer Cloud Services New Jersey.
Some of the initial project investments include budgets for system configuration, deployment and integration of cloud applications, data conversion testing, staff training and more. Most of these upfront expenditures are associated with labor. Once the migration is complete, expenses mostly include cloud services subscription fees and configuration changes.
Most Important Objectives In Cloud Cost Optimization
Resource optimization
Optimizing resources involve getting into the nitty-gritties of resource usage. Organizations need to be careful while building a cloud migration budget that it actually sticks to the most efficient usage of resources – without compromising on round the clock availability or sticking to the budget.
Effective cloud cost management involves right-sizing your cloud configuration. This means effectively harnessing utilization metrics and automation whenever you are in the process of upgrading, downgrading, or terminating cloud resources to avoid overprovisioning or underprovisioning.
Your systems should not be lying idle or suffering performance issues due to under provisioning. In other words, organizations need to hit the right balance between matching instance types and sizes to their workload capacity and performance requirements.
Given the incredible amount of choices made available by cloud providers and changing needs of the organization and customers, achieving optimal balance between cost and performance of cloud resources and configuration can be tricky. Most businesses, yours included, typically have physical or virtual servers, sometimes both, visit company website for more information.
Pricing optimization
Cloud computing offers diverse benefits including the potential for nearly unlimited scalability and reduction in costs as costs are entirely dependent on resource usage. But understanding your own resource requirements thoroughly means that you can employ pricing optimization strategies like Reserve Instances (RIs).
These generally involve heavy discounts for prebooking capacity. When compared to on-demand pricing models, RI savings can reach as high as 75% based on your selected criteria for upfront payment and time commitment.
Moreover, flexible pricing models such as Saving Plans can also provide similar cost management benefits. Adopting a proactive pricing strategy can be critical to the success of FinOps, but only if you avoid overcommitting. This involves correctly anticipating your cloud resource needs based on the right analysis of your past usage.
Effective Tips For Cloud Migration Cost Savings
Right-Size your Cloud Infrastructure
Spend some time to understand your minimum and optimal performance requirements. Then match these with a cloud provider capable of meeting your needs at the lowest price point without sacrificing on quality.
Cloud capacity is very different from on-premise infrastructure and you cannot replicate the same just by copy-pasting. The right way of doing this would be to primarily focus on the user standpoint and right-sizing the workloads judging by performance.
Once the migration is complete, you can take the time to do a deep analysis of the computing services, understand your usage of resources such as CPU, RAM, network utilization and modify them as per your necessities. Managed IT Services New Jersey can help you keep track of your resource usage easily.
Leverage reserved instances to stabilize workloads
The benefit of reserving capacity upfront is that you can generally get them at much lower prices from most public cloud providers. If your workloads are expected to remain predictable over the next few days or weeks, you can avail of significant discounts by reserving capacity in advance.
Recent data shows that the usage of long-term reserved instances resulted in savings of up to 75% when compared to the regular fees or on-demand charges for the same capacity. You can also use convertible instances in case you need to change the reserved instance characteristics within their region. Such changes can include the networking type, instance families, operating system, tenancy and more.
Don’t forget to budget for Managed Services
As public cloud services are generally unsupported (AWS, Google, Azure), companies generally need to make significant investments in managing these in-house by hiring and training cloud architects.
It is almost always cheaper to make use of cloud migration services instead. Managed cloud services offered by third-party vendors nearly always proves to be less expensive and more efficient for companies in the long run.
Understand that costs can vary over time and establish budget thresholds
Once you start making use of the public cloud infrastructure, you will be able to run your applications on a flexible pay-as-you-go model. However, even with in-depth analysis and predictive modelling of traffic loads, data flows can sometimes not conform to expectations.
Whether it’s because of your IT team using virtual machines and containers, or actual spikes in traffic, it’s easy to exceed the allocated budget when usage exceeds the initially projected level. This is why you should establish budget thresholds and keep track of your usage and expenditures over time. Software tools like AWS Budgets and Amazon CloudWatch can help you do this easily.
NOTE: This is a post by Chris Forte.
About Chris:
Chris Forte is the President and CEO of Olmec Systems, which provides specialized services of IT Consulting New Jersey, NY & GA area. Chris has been in the MSP work-space for the past 25 years. He earned his Master’s Degree from West Virginia University, graduating Magna Cum Laude. In his spare time, Chris enjoys traveling with his family.
