How to Achieve AWS Cost Optimisation to Ensure You’re Getting Value for Money

Steve Rastall (Founder & CEO) 20-Nov-2024 10:47:55

AWS Cost Management

Abstract

Amazon Web Services (AWS) cloud technology can act as a game-changer for your IT operations, providing vast gains in speed, agility, and performance, while removing the need for fixed assets and physical hardware.

However, budgeting for a cloud system is a totally new concept when compared to traditional IT systems, and we see those differences causing significant challenges for many organisations.

In this article, we’ll explore some important issues with AWS cost optimisation, provide advice for controlling your cloud spending, and offer suggestions to increase your ROI with AWS.

Introduction

If the cloud is the future of IT for business, then it’s safe to say the future has already arrived.

Adoption of the cloud has grown at a rapid pace over the past few years. And that trend will only continue, with Gartner recently predicting that global spending on public cloud services will grow from $396 billion in 2021 to $482 billion in 2022. That’s an increase of a staggering 21.7%.

But this is unsurprising when you consider the transformational impact cloud technology can have on your organisation as you migrate more of your IT infrastructure.

Moving your critical applications and business processes to the AWS cloud enables you to streamline and enhance the delivery of IT services, to both internal and external users, while lowering fixed costs and removing dated legacy systems.

Of course, as with any technology, the cloud also comes with some challenges which can be difficult to navigate, particularly when it comes to AWS cost optimisation.

The cloud is, by nature, highly flexible and ever-changing. As a result, there are some key differences between monitoring, managing, and budgeting for the cloud when compared to your on-premise IT systems of the past.

If you’re unaware of those differences, or are unable to manage them strategically, your organisation is at risk of some problems with regards to keeping AWS costs under control.

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The Challenges with AWS Cost Optimisation

Implementing AWS will bring about a shift from the capital expenditure (CapEx) model of legacy IT hardware to an operational expenditure (OpEx) model with cloud infrastructure-as-a-service.

Removing those fixed expenses of servers, data centres, and other one-off purchases means you’ll only pay for the cloud services that you consume, as you consume them.

But with this new – perhaps unfamiliar – model, the amount you spend on your cloud systems will be variable, dependent on a wide range of factors.

What most organisations fail to account for is that the cloud is completely flexible and scalable. Therefore, the usage of the technology can take you well beyond your planned budget. And that can happen without the approval, or even knowledge, of the person responsible for managing that budget.

Furthermore, if your cloud infrastructure isn’t configured or architected in the optimal way, you’ll probably end up over-spending in certain areas. You may even be paying for expenses that aren’t necessary to your business at all.

When this begins to happen, you’ll face challenges such as:

Over-spending beyond the allocated budget
Insufficient visibility into your usage and performance
Difficulty predicting your monthly bills
Charges from your cloud provider that are too high for your usage
Charges from the provider that don’t match the performance you’re receiving

Unless you’re continually monitoring and optimising your cloud deployments, your monthly costs will inevitably creep up much higher than expected.

AWS Cost Optimisation vs Performance

Another important thing to be aware of with the OpEx model mentioned above is that your IT budget and the performance of your cloud will be in constant opposition.

The more IT you consume, and the higher your performance levels must reach, the more it will cost for your business.

When that begins to happen, it’s surprisingly easy for planned budgets to be discarded in favour of greater IT services from the cloud platform, often without even realising the price of AWS services until the bill arrives.

From a business perspective, this simply isn’t an option. Yet it still happens to organisations who aren’t prepared or experienced enough to control AWS costs.

Whether the person responsible for this is you, your IT director, a systems architect, your COO, or even your CFO, it’s crucial to acknowledge the need to be proactive in this area.

You must ensure your cloud budget is followed, and you can’t afford any surprise charges on your monthly bill. However, you also need to ensure your end users receive the speed, performance, and reliability they need to get their work done.

Additionally, if you ever reach a situation where your cloud budget is going to be cut, you’ll then need a way to prevent that from damaging your business continuity.

Assessing the Solutions for AWS Cost Optimisation

Seeing your AWS cloud costs rise unexpectedly is a challenge you’ll face sooner than later if you don’t have a strategy in place to address these challenges.

We’ve seen too many businesses reach this realisation when its already too late, with costs already out of control.

But don’t panic yet. There are ways to manage and overcome these problems.

While it is possible to manage your cloud costs manually, this would be an extremely time-consuming and inefficient method. Taking time to work on tasks like reviewing every bill, checking through thousands of line items, and so on just isn’t realistic. You have your own job to do as well, after all, so you need a simple, easy solution.

So, how can you get that control over your AWS cost optimisation?

There are several different approaches you could take, each with its own advantages and disadvantages.

1 – The Options from AWS, Your Cloud Provider

Billing from Amazon

As your cloud provider, Amazon bills you for your consumption of its IT infrastructure-as-a-service in arrears. As a result, by the time you’re made aware of how much your monthly usage has cost, it’s too late to do anything but pay the bill.

And, while you do have access to view your past and upcoming bills in the AWS management portal, the visibility and usability of this is far from ideal. That makes it difficult to see where the unexpected costs have come from.

There’s a huge amount of information in each bill, which is very hard to review manually. Keeping track of every single line item and relating it back to the appropriate system is also too time consuming to do regularly.

Without experience in budgeting for cloud, it’s also easy to become caught out by frequent fluctuations in cost due to varying usage of things such as bandwidth.

To really get the necessary control over your AWS cost optimisation, you should look for a more intuitive and insightful solution.

Built-in Tools with AWS

You’ll also have the choice of some free built-in AWS cost optimisation tools from the platform.

The AWS website states:

“AWS has a set of solutions to help you with cost management and optimisation. This includes services, tools, and resources to organise and track cost and usage data, enhance control through consolidated billing and access permission, enable better planning through budgeting and forecasts, and further lower cost with resources and pricing optimisations.”

However, you’ll still have to invest significant time and money getting these properly configured before they become useful.

As this requires technical expertise, and generally requires a great deal of time to be kept up-to-date, it’s an option we’d advise against.

You’d need to train an existing employee, or hire a partner to do it for you, neither of which will be cost-effective.

It’s also important to note that even if you do configure these in-built tools, they may not remain sufficient when your requirements or cloud environment change.

2 – Third-Party Tools

Another way to approach AWS cost optimisation is to use some third-party tools. Unfortunately, the majority of these technology products won’t provide anything more than basic cost management tools. They don’t provide any extra functionality or support.

While that could be sufficient for smaller businesses with limited cloud usage, most organisations with critical applications and business processes in the cloud will need more.

These tools also tend to need a certain level of intelligence and configuration to deliver what’s needed. This will mean a further investment of time, effort, and possibly even budget.

To manage the costs of a dynamic, flexible cloud infrastructure, you should ideally put intuitive monitoring, automated reporting, and easy-to-use optimisation tools in place as well.

3 – AWS Cloud Consultants

You could also turn to the network of AWS partners and consultancy firms that AWS has to offer. Working with a cloud consultant is the route most businesses take whenever they need additional services to help make their cloud investment a success.

However, although working with a consultant is a common approach, there are some considerations you’ll need to make before committing to this option.

Firstly, as with the earlier point about third-party tools, seeking the help of a consultant will also require an investment of both time and money. When your aim is to gain better control of costs and reduce your spending, this is generally a counter-productive exercise.

Of course, there’s also the possibility that a consultant might make suggestions that aren’t even helpful to you, or offer recommendations that are too complex to take without further investment.

A consultant working with you to help control your cloud spending will deliver their service as a one-off project for you. That means they’ll only provide insight into that one single moment in time.

As we know the cloud is ever-changing, hopefully you can appreciate why this approach would be insufficient for your long-term budget.

Your visibility into your cloud costs must be able to keep up-to-date as your cloud usage fluctuates.

A consultant will only be able to provide a snapshot of your cloud usage and spending, but that’s just the first step.

After that, they won’t be there to offer any guidance for optimising your cloud environment, understanding the risks, maintaining performance and security, or any other ongoing decisions.

For these reasons, working with a consultant is a limited, ineffective solution. It won’t give you a manageable, sustainable method for AWS cost optimisation.

Some Useful Steps You Could Take Yourself

Beyond those options, there are some steps you could take yourself which many businesses don’t realise might help with cloud cost issues:

Review your AWS architecture, and make sure it’s still fit for purpose
Research whether a different data centre could save you money (for example, UK-based data centres can provide cost savings of up to 30%)
Consider implementing auto-scaling with your cloud systems
Remove old licenses or resources no longer needed
Scale your usage of resources out of core hours
Work with a provider who passes on savings.

However, to gain full control of your AWS cost management, and solve the related challenges, you’ll most likely need a comprehensive solution that provides you with:

Constant monitoring of your cloud usage
Continual optimisation of your cloud deployments
Real-time context
Proactive decision-making
Ongoing support.

So, where can you find all these things in one simple, easy-to-use AWS cost management system?

Evaluating the Alternative – IG CloudOps and Automation

When you’re busy running an organisation or an IT department, you can’t afford to be always worrying about how much you’re spending on the cloud. Nor can you settle for a monthly bill from AWS that exceeds the budget you’d planned for.

But these challenges won’t go away unless you can get that constant monitoring, management, and visibility in place for your cloud deployments.

Thankfully, there are cost-effective solutions available that can provide the pervasive service needed to solve these AWS cost optimisation issues.

For instance, here at IG CloudOps, we’ve developed a unique custom CloudOps, combining automated processes and tools designed specifically to give you full control of your cloud environment.

This simple, user-friendly solution de-mystifies all the complexity of cloud management. Even people who don’t have a technical background can easily benefit from using:

Automated reporting, to give you total real-time visibility and make your bills more predictable
Continual monitoring of cloud usage, to remove the risk of over-spending
Proactive optimisation of your cloud, to improve performance, reduce costs, and increase ROI.

CloudOps is a proven way to solve your cloud cost challenges and reduce your spending on your AWS systems.

Unlike a typical consultant or third-party product, CloudOps already includes all the automated processes and functionality your business needs, without any hidden or surprise charges.

Using innovative technology to match the complexity of the cloud also removes the burden of time-consuming, expensive cloud management. CloudOps achieves this by offering greater:

Accuracy
Agility
Simplicity
Reliability
Predictability
Consistency

CloudOps can be implemented for any new or existing AWS cloud environment. This is the way to gain absolute confidence that your IT budget will always be adhered to while your cloud systems are free to run at optimum capacity.

Still not convinced? Click here to learn how CloudOps has had a transformational impact for our cusotmers and our cloud services in recent years.

Final Thoughts

Most businesses will struggle with AWS cost optimisation at one stage or another.

That’s why it’s vital to identify your risks and vulnerabilities early on, and take action immediately to get your cloud costs under control.

Too many organisations are too slow to recognise the need for a holistic cloud cost management system, then find themselves over-spending drastically.

The earlier you can put processes and tools in place to optimise your AWS cloud environment, the more you’ll save.

IG CloudOps is Here to Help

If you’re having difficulty with your own AWS cost optimisation, and need to get control of your cloud spend, don’t let your business suffer any longer.

IG CloudOps is here to help. Please do get in touch with us and a member of our team will be happy to talk through your unique situation.

Our proven track record of success with AWS, along with our industry-leading automation technology, is the perfect way to lower costs and make cloud optimisation much simpler.

You’re also welcome to take a closer look at CloudOps yourself by requesting a test drive.