Managing cloud expenses can be challenging for many small and medium-sized businesses (SMBs), especially as their cloud usage grows. Short-term spikes in demand, seasonal fluctuations, or unexpected workloads can lead to sudden increases in expenses, making it difficult to predict and control cloud spending.
In this blog, we’ll share practical strategies that will help you effectively manage your SMB’s cloud spending.
Gain visibility into your cloud usage and costs
Implement cloud monitoring tools that provide real-time data such as CPU and memory usage, network traffic, and storage consumption. Doing so will allow you to quickly pinpoint inefficiencies and unusual usage patterns so you can make adjustments before costs spiral out of control.
Make sure to also regularly review your cloud bills so you can better understand what you’re being charged for. While cloud bills can be complex, breaking them down can reveal anomalies and highlight potential cost-saving opportunities. Common components of cloud billing include:
- Compute costs – charges for processing power
- Storage costs – fees for data storage
- Bandwidth costs – charges for data transfers, both within your cloud environment and between your cloud and the internet
- Support costs – fees for technical support
- Discounts and savings – upfront payments or reserved instances that can help reduce costs
Optimize resource utilization
Many SMBs overestimate their needs and end up paying for more resources than required. To avoid this, regularly assess your workloads and adjust resource allocation accordingly. Be sure to eliminate cloud resources that are no longer in use such as idle instances, unused storage volumes, and inactive databases. You can also shut down nonessential instances when they’re not needed.
Implementing autoscaling is another way to optimize resources. Autoscaling allows your cloud environment to automatically adjust resources based on actual demand, scaling up during peak usage and down during low-usage periods. This helps prevent overprovisioning and keeps costs in check.
Keep in mind that your cloud requirements will evolve over time, so it’s important to continuously review and adjust your usage. Regularly audit your cloud environment, reassess your resource needs, and make necessary adjustments to avoid overspending.
Take advantage of pricing models
Cloud providers often offer discounts for long-term usage commitments or upfront payments. By using reserved instances, you can lock in lower rates by committing to a certain level of resource usage over time. Spot instances, which let you bid on unused capacity, offer another way to save by accessing resources at a lower price.
It’s also worth negotiating with your cloud provider. Depending on your usage, they may offer custom pricing or potential discounts tailored to your specific needs.
Use cloud cost management tools
Most major cloud providers offer built-in cost management tools that allow you to monitor your cloud expenses in real time and take corrective action when needed. These tools often include the following features:
- Budget planning and forecasting – helps you set realistic cloud spending limits and predict future costs based on historical data
- Cost anomaly detection – identifies unusual spending patterns or outliers that may indicate errors or inefficiencies
- Resource optimization – pinpoints underutilized or unused resources, and suggests ways to optimize the cloud infrastructure
- Rightsizing – ensures that cloud resources are appropriately sized to meet the demands of workloads, avoiding overprovisioning or underprovisioning
- Pricing optimization – analyzes different pricing plans and usage tiers and recommends the most cost-effective options
- Cost allocation tags – tags resources with specific labels to track and allocate costs to different departments, projects, or cost centers
- FinOps maturity assessment – evaluates a company’s cloud practices against FinOps standards and offers suggestions for optimization
By following these strategies, your company can effectively reduce cloud costs without sacrificing performance or security. And if you need assistance, SpectrumWise can handle your cloud management needs. Our IT experts will optimize your cloud usage and spending, ensuring you get the most value from your cloud investment. Schedule a consultation with us today.
