Cost Optimization Strategies for Cloud Infrastructure
Maximizing the Benefits of the Cloud, Minimizing the Costs — Your Ultimate Guide to Cloud Cost Optimization Strategies
Cloud has become a popular solution for organizations, providing numerous benefits that can help businesses grow and thrive. At this time, many teams run their applications on top of the cloud, ranging from enterprise corporate and even to personal or private needs can already enjoy various kinds of cloud-native services features and benefits. One of the several aspects that makes them prefer to use the cloud is the cost-effectiveness offered by cloud solution providers instead of using legacy infrastructures.
What are the benefit cost effectiveness for business?
- Lower Capital Expenditure: Cloud enables businesses to reduce their capital expenditure by using the services of cloud providers. This eliminates the need for businesses to invest in expensive hardware and software.
- Pay-as-you-go Model: The cloud model enables businesses to pay for what they use, which eliminates the need for businesses to invest in expensive IT infrastructure that may go unused.
- Reduced Maintenance Costs: Cloud eliminates the need for businesses to invest in IT engineering and operation personnel and maintenance costs as the cloud service provider takes care of these services (managed services).
- Increased Efficiency: Cloud enables businesses to access their data and applications from anywhere, which leads to increased efficiency and productivity.
- Disaster Recovery: Cloud enables businesses to have a disaster recovery plan in place, which can save significant costs in the event of a disaster.
At the corporate level, we may need to look again at the financial policy which is currently used as a reference in making purchases, especially regarding Capex/Opex approach. For example, the cloud cost effectiveness in point 1 above (Lower Capital Expenditure), will be the opposite for organizations where hardware and software are company assets.
Related to cost-effectiveness, what should we highlight if we want to deploy our applications on the cloud?
As we know, the cloud provides a lot of features and flexibility that can be utilized from using its native services. Selecting the right cloud services according to our needs can avoid excessive cost usage for our applications. We can group them into 3 types of cloud services:
- Infrastructure as a Service (IaaS): IaaS provides businesses with access to computing infrastructure such as servers, storage, and networking.
- Platform as a Service (PaaS): PaaS provides businesses with access to a platform for developing and deploying applications.
- Software as a Service (SaaS): SaaS provides businesses with access to software applications over the internet, eliminating the need for businesses to install and manage software applications.
Telkomsel is currently running the Cloud Enablement project with the implementation of the Hybrid Cloud architecture and has migrated several of its application channels to run on the cloud and some BI workloads that are in the process of migrating to the cloud.
In general, the process of onboarding an application to the cloud passes through the following stages:
Sometimes, what we have planned in the design phase has changed according to the conditions at the time, this can occur due to changes in the architecture, platform/service used, or might be requested from business users. When our application runs the business as usual (BAU) phase after this production, we need to regularly check the running cloud cost usage whether it is in accordance with the design expectation or even higher than planned.
We can monitor our cloud cost usage using native tools or services from each cloud provider. For example, on AWS we can use AWS Cost Explore, AWS Billing Management, or we can create a cost monitoring dashboard using AWS Quicksight. In Telkomsel, some actions have been done when we find cost anomalies or want to do some cost optimization for our cloud environment, we can use the following strategy to get more savings and cost-effectiveness.
- Toggle On/Off: One of the simplest ways to save costs in the cloud is to turn off non-essential resources when they’re not being used. For example, test and development environments may only be required during business hours. By turning off these resources when not in use, we can reduce the number of hours that we’re billed for usage.
- Right-Sizing: Overprovisioning resources can lead to unnecessary costs, while underprovisioning can cause performance issues. By regularly monitoring our resource usage and performance metrics, we can identify opportunities to right-size our resources to reduce costs without impacting performance.
- Saving Plan and Reserved Instances: Cloud providers offer various cost-saving plans that can help us save money on our cloud infrastructure costs. These plans offer significant cost savings for workloads with consistent usage patterns over a more extended period. Additionally, you can opt for savings plans that offer discounts on your usage in exchange for committing to a specific usage level for a term.
After doing some of the strategies above, what next?
Since this cost optimization activity is not only done once but needs to be regularly reviewed so that we keep our cost usage from exceeding the threshold later. We need to manage every use of cloud resources and take some preventive action to avoid increasing our cost usage. Here is some actions point that can be taken:
- Budget is an essential action for preventing and managing cloud costs. A budget is a predetermined amount of money allocated for specific purposes, such as cloud usage. By setting a budget, we can control our spending on cloud resources and prevent unexpected costs.
- Alerts are another crucial action for preventing and managing cloud costs. Alerts can notify us when a specific event or condition occurs, such as when we’re approaching a budget limit or when resource utilization exceeds a specified threshold. Alerts can be sent via email, SMS, or other notification channels, and can help us take timely actions to prevent unexpected costs.
- Monitoring is an ongoing action that involves continuously tracking our cloud resource usage, performance metrics, and cost metrics. By monitoring resources, we can identify opportunities to optimize our usage, right-size resources, and reduce costs.
- Showback and Chargeback is an action that involves tracking and reporting our cloud resource usage and costs. Showback refers to sharing our resource usage and costs with application teams, while Chargeback involves allocating costs to specific departments or business units. By implementing Showback and Chargeback, we can increase transparency, accountability, and awareness of cloud costs across our organization.
In Conclusion, cloud infrastructure has become a critical component of businesses’ IT infrastructure including in Telkomsel. However, as more workloads move to the cloud, cloud costs can quickly spiral out of control. We must know how to do cost optimization for cloud infrastructure, covering various actions that can help prevent and manage cloud costs, such as budgeting, setting alerts, monitoring, and implementing Showback and Chargeback. Additionally, cost-saving implementation plans also a critical parts to be performed, such as Toggle on/off, Right-Sizing, Saving plan, and Reserved Instances.
By implementing these strategies and actions, businesses can achieve significant cost savings and improve the efficiency and performance of their cloud infrastructure. With the right approach and tools, businesses can unlock the full potential of the cloud while ensuring cost-effectiveness.
