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How to Optimize Costs When Planning a Cloud Transformation

The following was taken from a recent technology roundtable discussion in which we participated. This post takes the opportunity to expand on that exchange.

Costs are likely a chief concern when planning any cloud infrastructure. As with any project planning, you can estimate costs and compare different options, including traditional on-premises infrastructure costs.

When factoring in the total cost of ownership, advantages offered by cloud infrastructure often tip the scale and make the decision to migrate an easy one. It provides multiple opportunities and strategies to optimize costs.

Infrastructure Setup Savings

Leading cloud providers offer discounts for resources you will need longer term by offering reserved instance pricing. This can save you one-third of your main compute costs.

If your server needs can automatically scale, you can also take advantage of on-demand pricing and auto-scale to meet demand where it exists and stop or terminate unneeded assets when demand slows down. You only pay for certain resources when they are in use, an enormous opportunity for cost savings. Comparatively, to meet peak demand with traditional infrastructure, you must always pay for maximum requirements.

Spending Permissions

It is also critical to have a clear definition of who’s allowed to spend the company’s money and how. You can handle this in several ways. For example, an AWS best practice follows the Principle of Least Permission in which you assign a user the least amount of permissions required to perform their job. Part of this strategy could involve setting up a separate account managed with consolidated billing, to sequester a user is in a dedicated AWS account. You can then override permissions on that entire account. Doing so will limit all Identity Access across the entire account and allow for easier control over who can do what.

Cloud Monitoring

Strong cloud monitoring and budgeting strategies are also important. You can easily configure alerts for when you cross a defined threshold to stay updated on costs and aware of potential overruns before they happen. This serves as an easy foundation to build on to stay informed of real-time expenditures in your environment.

Tagging Resources

You can also use Tagging resources to easily identify and allocate costs across your environment. By customizing tagging to your own needs, you can granularize and categorize expenses, enabling you to partition as needed and as business requirements mandate. Different organizations have different approaches as to how costs are allocated and applied. Having a flexible and customized approach is key to fulfilling those differing needs.

Agility Through Cost Optimizations

Using the above strategies helps optimize costs as well as plan and estimate projected growth requirements. Having the ability to quickly adjust costs, both up and down, by managing infrastructure programmatically allows you to remain agile and respond to industry changes quickly and effectively.

We use all of the above both internally and for our clients, keeping total cost of ownership low and competitive, as well as performance comparable or exceeding to on-premise services they currently have.

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