What are the Advantages of Cloud Cost Management?

Organizations not practicing cloud cost optimization are missing a lot of benefits; on the other hand, they are also losing a lot of money.

Using cloud cost optimization solutions helps an organization to appropriately manage the number of cloud services they use and their costs. This gives them a better understanding of their cloud architecture and how they can make it run smoothly at cheaper costs.

In this article, you will learn the meaning of cloud cost management and the benefits an organization can derive from practicing it.

What is Cloud Cost Management?

Cloud cost management, also known as cloud cost optimization, is a method deployed by organizations using cloud technologies to ensure that they maximize their cloud usage and reduce costs.

For cloud cost management to be possible, the company using cloud technologies has to identify its needs and how it can reduce how much they spend on them.

Cloud cost management is important because cloud technology is always changing, and organizations must look for how they can efficiently and effectively use new technologies.

In determining how they can reduce and effectively use cloud technologies, organizations must discover what contributes to the cost of cloud services. Network traffic, software licenses, support services, memory, storage, web services, and many others contribute immensely to cloud costs.

Cloud Cost Management Strategies?

Here are some strategies both small and large businesses can implement to reduce the amount they spend on cloud services.

●      Cloud Cost Management Plan

The first strategy, which potentially contains other strategies that an organization in cloud cost management can implement, is a plan.

A cloud cost management plan contains what a company or organization can do to reduce its spending on cloud services. Reducing cost doesn’t mean reducing efficiency or effectiveness; it means looking for a way to balance cost and needs.

●      Scheduling

In many organizations, not all cloud services are used simultaneously; some are used frequently, while others are used during certain periods. Scheduling means an organization must separate those services used frequently from those used periodically.

●      Clear Unused Services

In an organization, there’s no point in keeping a cloud service that is not used at a certain time; discard any instances that an organization is not currently using.

●      Consider Your Company’s Needs

To avoid spending a lot on things that are not needed for an organization, it is more of a general recommendation that an organization chooses cloud services that aptly suits their needs.

Getting a cloud service that does not serve a company’s needs will only lead to more costs accrued.

●      Scale Excellently

When a company begins to grow, it may be tempted to scale up the number of cloud services it uses even when it is unnecessary. Evaluate an organization’s need from time to time to know when it is time to scale up or down on cloud services.

A company’s performance can’t be stagnant; there are times when it’s going up, and there are times when things are going downhill. Depending on a company’s performance, there are times to increase the use of cloud services, and there are times to reduce.

Advantages of Cloud Cost Management

Below are some advantages an organization can derive from effectively and efficiently managing its cloud needs and costs.

●      Reduction in Expenses

Obviously, the first advantage or the first reason companies practice cloud cost optimization is to reduce the amount of money they spend on cloud services.

With an evaluation of services used by the company, they can tell which category of cloud service to remove and the one to keep, thereby reducing expenses. A company practicing cloud cost optimization can get discounts on services they pay wholesale.

●      Effective and Efficient Usage of Cloud Services

A major advantage organization can derive from cloud cost management is the effective and efficient use of cloud services. When an organization checks the amount and type of cloud services, it will surely discover the services to discard and those to retain.

Not only does this make things efficient for the organization, but effectiveness is also guaranteed as only important services are retained.

When an organization is practicing cloud cost management, its focus is to find cloud services that serve the exact need of the organization. In other words, an organization looks for a cloud service provider that works on its niche instead of looking for a generalized service.

Getting a cloud service provider within an organization’s need does not mean underprovisioning; it only means they get a smooth performance at a reduced cost.

●      Evaluation of Cloud Architecture

When an organization is practicing cloud cost management, it must evaluate its cloud architecture to determine what needs to be removed and what needs to stay.

A major advantage here is that with the evaluation, an organization gets more visibility on services they have been paying for which are not needed. Besides discovering unwanted cloud services, evaluation of cloud architecture will also help an organization with issues regarding cloud security.

●      Accurate Budget Allocation

Most cloud cost management lies in accounting — Companies are trying to reduce the amount they spend on cloud services.

So in the practice of cloud cost optimization, an organization has a detailed description of unwanted cloud services and the essential ones. With this in mind, they can accurately allocate funds where needed instead of blindly spending.

●      Better Forecasts and Expectations

A good thing about practicing cloud cost optimization is that an organization can predict when the cost of cloud service will increase or reduce.

When a company has exact knowledge of the type and amount of cloud services they use, they can tell when and how much it increased in price. In comparison, a company not practicing cloud cost optimization won’t even know when a cloud service will increase in price, and it will often come as a surprise.

Wrapping Up

Especially now, when the world economy is taking a bad shape, cloud cost management should be practiced by every organization, no matter how small or big.

Cloud cost optimization helps the company evaluate the number and type of cloud services they use to reduce cost. Apart from reducing costs, it also helps organizations to make a better budget, get better forecasts and predictions, and efficiently use their cloud services.