Crucial Elements in Cloud Cost Tune-Up

The Quarterly Cloud Cost Tune-Up is about taking a snapshot of your current environment and finding the optimal price configuration against the service and price catalog of your cloud provider.
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Six Crucial Elements in your Quarterly Cloud Cost Tune-Up

Last week we talked about why a quarterly cloud cost Tune-Up is needed (Find out why). This week we will focus a bit more on what it takes to do a quarterly Tune-Up.

The great thing about cloud is that you can provision new services with focus on speed and agility and leave the cost optimization for this quarterly Tune-Up. And after your quarterly Tune-Up you will see savings materialize immediately.

The Quarterly Cloud Cost TuneUp

Just to reiterate, the reasons why we need the quarterly Cloud Cost Tune-Up are:

  1. Cloud pricing is dynamic. Prices and discount models are changing, and new (and cheaper) services are added
  2.  Your environment is dynamic. You migrate infrastructure, change architecture and add new applications and services.

In a dynamic environment with dynamic pricing you need … dynamic cost management.

The Quarterly Cloud Cost Tune-Up is about taking a snapshot of your current environment and finding the optimal price configuration against the service and price catalog of your cloud provider. Following that implementing the changes is easy and fast – as long as you only implement the material savings . Most changes involve merely adding a few checkmarks in your buying configuration – not changing your infrastructure or services.

The ability to complete a Tune-Up is about data, tools and people. You need to have the following in place to cost-optimize:

✔ Data: A complete overview of your current environment

✔ Data: Knowledge of all relevant services and prices from your cloud provider

✔ Tool: A way to combine these two data sets and use it to optimize your cost

✔ People: A person with detailed knowledge of terms and conditions from your cloud provider and technical expertise

✔ People: A person with insight in your technical environment to verify optimization recommendations before implementing them (typically an IT Architect)

✔ People: A person to implement the recommendations

The key question from here is: How do we get it done?

The challenge is getting it done

Most practitioners are well aware of concepts for optimizing their infrastructure. They know of at least some of the opportunities in reservations, pooled resources, looking for new and cheaper service instances and all the other savings options available. Also, they review the recommendations on cost savings available in their cloud portals.

Referring to the checklist above the do-it-yourself (DIY) approach is challenged on two primary factors:

  • With the pressure for speed in delivery is it then realistic to carve out enough time to not only “do” cost optimization, but to keep track of every new pricing structure, licensing model, service introduction etc. for all cloud providers in use?
  • Would you have the necessary tools in place to optimize? This cannot be done by hand unless your cloud consumption is very small.

To get a direction you might want to know the answer to this question:

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How do mature organizations get savings done?

They focus on getting the largest ticket items optimized on an ongoing basis and use external validation of overall cost efficiency and getting the last 10% savings home. 

What we see in mature organizations where dedicated teams are in place, they focus on getting the largest ticket items optimized on an ongoing basis and use external validation of overall cost efficiency and getting the last 10% savings home. Not only is this a sound business case in its own right, but it also gives confidence to have an independent, external third party and an experienced cloud cost architect to validate the trickier parts with.

Three ways to make your life easier

In next weeks blog we will dive into some of the things you can do to make your quarterly Tune-Up a little easier. In fact we will explore three different ways to reduce the time you need to spend.

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