COST

OPTIMIZATION

How to cut Cloud bill by 50%?
How to get 100.000$ of provider credits?
How to avoid surprises at the end of the billing period?

Don’t let your cloud bill surprise you
at the end of the month!

4 Pillars of Cloud Cost Optimization

Cost Visibility

How and Why each $ spend makes a business outcome. Making costs transparent is the first optimization step

Resource Optimization

Monitor through the lens of each service design. Make Cloud fit your usage patterns

Pricing Efficiency

Use all Cloud discounts possible: reservations, volume discounts, ARM-based services and more

Cost Planning

Perform regular Cloud architecture reviews and plan ahead. Avoid Cloud provider or vendor lock-in

Ever heard about FinOps?

CHECK OUT THE BASICS πŸ‘‡

What is FinOps?

FinOps is shorthand for Cloud Financial Operations or Cloud Financial Management or simply Cloud Cost Management.

It is the practice of bringing financial accountability to the variable spend model of Cloud, enabling distributed teams to make business trade-offs between speed, cost, and quality.

Cross-functional teams in IT, Finance, Product, etc work together to enable faster product delivery, while at the same time gaining more financial control and predictability.

What makes costs transparent in Cloud?

The true key to understanding total cloud cost of ownership is built upon Transparency and Accuracy. In order to add Transparency it is recommended:

  • To segment and allocate costs to each business department; the team; or the project. The majority of cloud costs can be categorised and directly allocated to an organisational unit.
  • Shared cloud costs should be identified upfront as part of system design. Shared costs can be split using an appropriate distribution model(s) (proportional, fixed, even-split) across the entirety of the organisation.
  • For shared platforms and accounts leverage a label (tag) strategy for cost allocation. Allocate cluster costs in proportion of each cost centre label’s usage.

What is Rightsizing?

The process of minimising waste of Cloud resources by finding the right Resource Size and Instance type for different applications and Use-Cases. It is best to scale out in the Cloud and Autoscaling should be used to handle increases in load.

What is Autoscaling?

Auto-scaling is a way to automatically scale up/down or in/out the number of compute resources that are being allocated to your application based on its needs at any given time.

What is Pay-as-You-Go model?

Pay-as-you-go is a payment method that charges based on usage. You only have to pay for a particular resource or service for as long as you need it, which prevents the waste of resources.

What are Spot instances in the Cloud?

A Spot Instance is an instance that uses spare Cloud Provider Capacity that is available for less than the On-Demand price. The discount might be as large as 70-80% from the regular price. However, Spot instances can be terminated by the Cloud provider at any time with a very short notice.

What are Reserved instances in the Cloud?

A Reserved Instance is an instance that is prepaid for a longer commitment period of 1 to 3 years. The discount can be in a range of 30-50% from the regular on-demand pricing, but you’ll have to pay for it even if it is not needed anylonger.

What is scaling out/is and what is scaling up/down?

Scaling out involves adding more computational units to a system in order to add capacity (e.g. adding 5 VMs into a pool), scaling up involves resizing existing units by adding resources into them (e.g. using larger compute flavour).

What is generally billed in the Cloud?

It all starts with Storage, Compute and Network. In general, cloud costs are calculated based on Performance and Consumption values. Most Cloud providers charge at least for the following:

  • Compute VMs running time
  • Allocated block storage space
  • Object storage by usage and number of requests Network traffic both within the region and out of the region
  • Capacity of Load Balancers based on number of requests and connections

What is billed when using Serverless?

Serverless lets you run code without provisioning or managing servers. It can run code for virtually any type of application with zero administration and only pay for what you use. You are charged for the number of requests for your functions and the duration it takes for your code to execute. Duration is calculated from the time your code begins executing until it returns or otherwise terminates, rounded up to the nearest 1 ms. The price also depends on the amount of memory you allocate to your function and most providers allow you to allocate RAM with MB precision.

How to avoid Cloud vendor lock-in?

Lock-in occurs when a customer must continue to use a particular cloud provider because its proprietary services, APIs, or protocols make it difficult to move or migrate a workload, making customers more dependent (locked-in) on a single cloud provider.

Tip #1

Save 50% on AWS RDS with few clicks

Converting AWS RDS (Relational Database Service) instance types to ARM-based Graviton3 can give you up to 50% price/performance improvement compared to regular x86 instance types.

Tip #2

Get up to 150 000$ in cloud credits for free

AWS Activate allows eligible startups and entrepreneurs receive up to 100.000$ in credits to cover cloud usage. Google offers similar conditions with up to 100.000$ GCP credits. Microsoft Azure for startups has even more lucrative conditions with up to 150.000$ free credits.

Tip #3

Autoscale AWS EKS clusters with Karpenter

Karpenter is an open source Kubernetes Cluster autoscaler that allows to dramatically improve the efficiency by adding and removing worker node capacity as required and it is 100% compatible with AWS EKS (Elastic Kubernetes Service). Read more about it in our Blog.

Tip #4

Save BIG with Spot instances (up to 90%)

Autospotting is an open source project allowing you to easily switch to spot instances in AWS and maintain correct bidding. It will automatically fail-back to regular on-demand instances in case spot capacity gets exhausted in the region. Read more about it in our Blog.

✭ Want more valuable tips for optimizing your Cloud setup? ✭

Download our Cloud Cost Optimization 101 for free!

Cloud Native and Cloud agnostic solutions

Whether AWS, OpenStack, Oracle Cloud or other Cloud providers, we’re happy to help!

In case of these or other questions

Is GCP cheaper than AWS or Azure? πŸ’°

How to save $$$ using reserved instances? πŸ”¦

Why Serverless is not as cheap as promised? ❓

Can we run reliably on Spot (Preemtible) instances? πŸ’‘

We’d love to hear from you and help to solve your challenges! Wherever you are in your Cloud journey, we have the expertise to make it a smooth experience.