Multi-Cloud Cost Management
Jul 04, 2023

Multi-Cloud Cost Management

Raghavendra Seshumurthy Yerur

Organizations are moving, migrating, and modernizing with cloud to provide a better experience to customers. However, there are hefty costs associated with most of these cloud services, so cost management becomes imperative for organizations when it comes to cloud.

Importance of Cloud Cost Optimization

Effective cloud cost management is a crucial element in achieving success for Finance, Billing, and cloud teams. While many organizations embrace the pay-as-you-go model, long-term usage can lead to significant cost escalation. We have identified the following factors as the root causes of leading to high cloud cost.

  1. Unused cloud services
  2. Over sized instances
  3. Unattached disks
  4. Old snapshots
  5. Not using storage life cycle policies
  6. Not enabling Log retention policies
  7. Not utilizing Reservations/Saving plans
  8. Not enabling Instance schedulers

Challenges in Cloud Cost Optimization

Cloud cost optimization presents various challenges that organizations face while managing and optimizing their cloud expenses. These challenges include:

  • Complexity of cloud pricing models and lack of visibility into cost allocation across different cloud services and resources.
  • Difficulty in tracking and understanding cloud usage patterns, leading to inefficient resource provisioning and overspending.
  • Dynamic nature of cloud environments, making it challenging to accurately forecast and control costs.
  • Lack of cost governance and optimization strategies, resulting in a lack of policies, tools, or expertise to identify cost-saving opportunities.
  • Balancing cost optimization with performance and security requirements, requiring organizations to find the right balance between cost reduction and meeting business objectives.

To overcome these challenges, organizations need to implement robust cost management practices and leverage cloud cost optimization tools. A proactive approach to continuously monitor, analyze, and optimize cloud spending is essential for achieving effective cost optimization in the cloud.

Best practices for Multi-Cloud Cost Optimization

  • Resource Right-Sizing: Optimize resource allocation by matching the capacity and size of cloud resources to the actual workload demands. Eliminate underutilized or oversized resources.
  • Reserved Instances and Savings Plans: Take advantage of cloud provider offerings such as Reserved Instances or Savings Plans to secure discounted rates for long-term usage commitments.
  • Spot Instances: Utilize spot instances for non-critical workloads that can tolerate interruptions, taking advantage of significantly lower pricing compared to on-demand instances.
  • Automated Scaling: Implement auto-scaling capabilities to automatically adjust resource capacity based on workload fluctuations. Scale up during peak periods and scale down during low-demand periods to optimize costs.
  • Cloud Governance and Policy Enforcement: Establish cost control measures and enforce policies across multiple cloud platforms. Set budgets, implement tagging strategies, and establish approval processes for resource provisioning to ensure cost-conscious decision-making.
  • Continuous Monitoring and Optimization: Regularly monitor and analyze cloud costs using cost management tools. Identify areas of cost inefficiency or unexpected spikes and take corrective actions to optimize spending.
  • Cloud-native Cost Optimization Techniques: Leverage cloud-native services and features like serverless computing, containerization, and managed services to reduce operational costs and improve efficiency.
  • Cost Allocation and Reporting: Implement robust cost allocation and reporting mechanisms to accurately track and allocate costs to different projects, departments, or teams. This enables better cost transparency and accountability.
  • Cloud Cost Optimization Tools: Utilize cloud cost management tools and services that provide detailed insights, analytics, and recommendations for cost optimization. These tools help identify cost-saving opportunities, track spending, and optimize resource usage.

How Microland implemented cost management solutions for leading organizations in the energy market?

Step 1: Did a complete analysis of the current state of cloud environments and cloud spend.

Step 2: Identified the gaps like lack of proper governance policies, irregular instance size, no tagging mechanism, inappropriate reservations, and unattached disks.

Step 3: Integrated leading cost management tool Flexera with all the cloud accounts and enabled cost optimization and governance policy alerts.

Step 4: Started decommissioning unused cloud services like express route and unutilized VM’s/Disks.

Step 5: Changed reservation scope to share and reserve the instances which were required for the long term after monitoring the utilization.

Step 6: Enabled instance scheduler for all non-prod instances/Virtual Machines.

Step 7: Downsized the VMs which were utilized below 5% CPU.

Step 8: Implemented show back and chargeback policy for each business department.

As a result, we saved $200k per month for the customer; a few subscription cost trend details are mentioned below after performing cost optimization activities.

Subscription 1:

Subscription 2:

All Subscriptions:

Mastering Multi-Cloud Cost Management: Key Takeaways

By applying a cost optimization solution with the right approach and right tool, organizations can reduce cloud spend to a large extent, approximately by 30 to 40%. Additionally with the standardization of governance and cost alerts/policies, organizations will have a better cloud experience for their applications at optimized cost.