Cloud technology has numerous benefits, but cost savings are not guaranteed. To achieve the full transformational benefits of the technology, cloud strategy and configurations must be optimised for cost efficiency.
South African businesses are increasingly recognising the value of cloud migration. Benefits include agility, resilience, and scalability. While there’s no one-size-fits-all strategy, even a hybrid approach offers significant value.
In embracing the advantages of Cloud, it’s also important to recognise that cost savings are not always guaranteed. Cloud strategies and configurations must be optimised to achieve true cost-efficiency and all the savings that cloud promises.
Cloud cost management factors
When it comes to cloud adoption, good cost management advice for South African CIOs would be to look at cloud as a strategy for transforming an entire business – and not just its IT Infrastructure. Cloud migration can significantly reduce overall costs, provide the elasticity to meet the seasonal peaks and troughs in demand for compute and enhance operational efficiency, but to achieve this, several factors must be considered…
- Assessment and planning: Assess existing infrastructure, applications, and workloads, to understand their dependencies, performance requirements, and resource utilisation. A thorough analysis helps identify which components are suitable for migration and which may need redesign or refactoring.
- Cost analysis: While cloud services offer scalability and flexibility, they also come with costs. Factors such as data transfer fees, storage costs, and compute charges should be considered, and mapped against potential savings from reduced on-premises infrastructure and operational expenses.
- Right-sizing: Overprovisioning can lead to unnecessary expenses. Fortunately, there are tools to monitor usage patterns in real time, and to adjust resources dynamically, based on demand.
- Leverage cloud-native services: Cloud providers offer platform-specific services that often provide cost-effective alternatives to building and maintaining custom solutions. Examples include serverless computing, managed databases, and content delivery networks (CDNs).
- Data transfer and egress costs: There are costs to migrating large volumes of data, but data can be transferred efficiently by using direct connections or bulk transfer services.
- Reserved instances and savings plans: These allow users to commit to longer-term usage in exchange for cost savings and can significantly reduce expenses for predictable workloads. A deeper understanding of the risks associated with cheaper instances would need to be critically reviewed and agreed with all stakeholders while making the choice.
- Operational monitoring and automation: Automation tools can help manage scaling, and backups, and other routine tasks efficiently, while also tracking performance, costs, and resource utilisation.
- Testing and validation: Applications should be tested rigorously after migration to verify functionality, performance, and security. Any issues can then be addressed promptly to avoid unexpected costs due to downtime or inefficiencies.
Practical cloud cost management through chargeback models
Chargeback models – where business departments are charged according to their respective Cloud usage – are another practical way to manage cloud costs in South African businesses. Implementing chargeback involves tagging resources and analysing usage patterns to hold stakeholders accountable for their cloud usage.
Chargeback encourages departments to optimise resource usage, as they know they’ll be billed based on actual consumption. Detailed cost breakdowns also allow organisations to appreciate the value brought by the various groups in their operation
Optimising cloud cost through automation
Automating cloud cost optimisation is a powerful approach to efficiently managing expenses while maintaining performance.
Organisations can deploy customised tools for real-time monitoring of their cloud costs. Alerts can also be set, to prevent unexpected bills.
Future requirements can be estimated based on historical data, and businesses can analyse their cloud spend to identify areas for improvement. Cloud Native Services like AWS Compute Optimiser, Azure Advisor, GCP Recommender, or other 3rd party Cloud Native Tools can be leveraged to get recommendations to right-size resources or react dynamically to the changes and optimise the costs in real time
There are also a range of AI/ML-driven solutions that automate optimisation tasks, and free up IT teams for strategic work.
Visibility, accountability, and control are critical to keeping track of cloud resources and costs. Fortunately, these can all be achieved through simplified, modern automation, so that organisations realise the full benefits of the technology – in terms of innovation, revenue and optimal productivity.
- Parikshit Moitra, Delivery Centre Head and Regional Partner Director at TCS South Africa
