For many organizations, migrating organizational resources onto the cloud is a critical portion of digital transformation efforts. The cloud enables enhanced flexibility and cost savings, and Amazon Web Services (AWS) is no exception. Since many organizations have cloud migration efforts already underway, CIOs and IT teams should begin considering how to best optimize their cloud spend across cloud platforms such as AWS. However, optimizing cloud spend comes with a host of challenges that IT teams must be equipped to overcome.
One of the most significant challenges in managing cloud costs is acknowledging that it is an ongoing process. Amazon Web Services is certainly not exempt from these challenges, and organizations utilizing AWS should focus on optimizing cloud spend sooner rather than later.
While cloud cost management is a huge undertaking, it absolutely cannot be ignored. Not investing enough time and money into optimizing cloud spend initially will eventually evolve into a massive waste of resources, and overall inefficiency in your cloud’s infrastructure. This is due to the pay-as-you-go nature of AWS. At first, this pay-as-you-go approach saves organizations a huge amount of money. However, organizations that don’t properly manage and monitor these costs are bound to see their cloud deployment expenses spiral out of control.
If cloud spend management tools are not used, or are used improperly, it is extremely hard to determine cost centers in a cloud environment. While some basic inferences can be made from dashboard-level insights, it is nearly impossible to attribute costs in a detailed manner. As a result, it is very difficult to keep the cloud users across your organization accountable. To resolve this, IT teams must address visibility and budget challenges.
The need to attain better visibility and insight into budgeting should be a considerable concern for any organization that has deployed or will deploy an AWS solution. In most organizations, 30 percent or more of their total software spend is wasted. It is paramount that organizations are able to see where these expenses are originating from across the board before they can begin to manage their cloud expenses. For organizations that utilize AWS, there are thankfully several tools that come preloaded to help with visibility and other expense-related information.
Amazon Web Services offers some cost management tools, which could be perfectly sufficient for an organization depending on the demands of their cloud infrastructure. There are three main tools that all organizations using AWS should become familiar with: AWS Trusted Advisor, AWS Cost Explorer, and recently added AWS Budgets.
It would behoove most organizations to utilize AWS Trusted Advisor when initially constructing their AWS infrastructure. This tool evaluates user specifications and recommends instance configurations that match these specifications. In the early stages of an AWS deployment, this tool can be invaluable. It typically will reduce AWS-related costs and increase visibility. However, in the entire context of your organization’s AWS deployment, it’s not quite enough. The tool doesn’t provide significant visibility, tracking, or operational feedback. While it is a great launching point for AWS efforts, other tools typically must be utilized.
AWS Cost Explorer provides a limited amount of visibility into the historical information of your AWS deployment. It presents and analyzes information on the AWS account in three views: Monthly spend by AWS, monthly spend by linked accounts, and your total daily spend. While your organization can deduce a significant amount of expense-related information using AWS Cost Explorer, this tool is also capable of predicting future cloud costs. It can forecast the next three months of bills if it has 80 to 95 percent certainty. Since cloud costs can be hard to determine until the bill arrives, this is an extremely useful tool for predicting and controlling cloud costs.
Amazon’s most recently developed tool has even more promise for controlling cloud spend. AWS Budgets allows your organization to plan service costs, service usage, and instance reservations. This allows IT teams to see how close their current plan is to adhering to a given budget. AWS Budgets informs users of current estimated charges from AWS, the expenses your predicted future usage could incur, and how much budget has currently been used. All AWS users get two free budgets, then they must pay two cents per day for each additional active budget. Keep in mind that AWS Budgets is designed to be used in a granular way for each team, project, or business unit – so expect to deploy many budget instances before optimizing your organizations AWS spend.
While these AWS spend management tools are sufficient for small AWS and cloud deployments, they encounter problems in multi-cloud or hybrid cloud environments. It is necessary to evaluate if your organization’s current overall cloud strategy makes the use of third-party tools worthwhile.
First, determine how frequently your organization uses non-AWS cloud services, and how these services interact with AWS. For example, an organization that uses Azure or Google Cloud in mission-critical ways will likely need a third-party tool that is agnostic to these other platforms in order to optimize their general cloud spend. Otherwise, your IT team will likely waste time and resources trying to piece together fragments of platform-specific optimization tips, ultimately hindering optimization efforts. With that being said, if your organization does not use any cloud services besides AWS, the tools that come preloaded will likely be sufficient.
Second, consider the size of your AWS deployment. For teams with very small AWS deployments, such as those for test/dev platforms, purchasing separate tools will likely not be necessary. However, organizations with large AWS deployments should absolutely consider using third party tools with sophisticated cost optimization features.
Finally, keep in mind any standards and regulations your organization must comply to. Despite all the benefits of a cloud deployment, the cloud often complicates compliance situations. If your organization is in health care, financial services, or another industry where software compliance is paramount, third-party tools must be considered. While tools like AWS Trusted Advisor are extremely helpful for the majority of organizations, they could potentially lead compliance efforts astray. By using a third-party tool, your organization will have access to sophisticated reporting, and some third-party cloud cost management tools can enable automation and provide additional audit trails.
Organizations seeking third-party assistance with AWS spend management should consider an end-to-end spend management platform that can provide a range of benefits to the organization. By using a cloud tool such as SoftwareOne's Cloud Management module, your organization will be empowered to manage their budget and spend of AWS in a simple, transparent manner.
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Our software experts optimise contracting and software spending with strategic software publishers.
