Cloud is Costly, Should We Pull Off?

The emergence of cloud computing has revolutionised the way businesses operate. With its numerous advantages, cloud computing has become an essential component of modern IT infrastructure. However, with the benefits come costs, and some businesses are now re-evaluaing the value of cloud services. This has resulted in a growing trend of businesses considering moving away from the cloud in favour of on-premise solutions.

As an architect, we can help businesses make informed decisions about their IT infrastructure. In this blog, we’ll discuss whether pulling down from the cloud is the right solution and only available option?

This blog has two sections.

Let's start with section 1

Section 1 - the ways to evaluate cloud costs.

Understand the business requirements

The first step is to understand the business requirements. As an architect, we need to have a clear understanding of what the business wants to achieve with their IT infrastructure. By understanding the goals, we can help in determining the best approach to meet those goals, whether it’s using cloud services or on-premise solutions.

Evaluate cloud costs

One of the main reasons why businesses consider moving away from the cloud is associated cost. As an architect, we can help businesses evaluate their cloud costs to determine, if it’s cost-effective to continue using cloud services. This involves assessing the costs associated with using cloud services, such as, subscription fees, storage costs, and data transfer fees. Additionally, we also need to evaluate the costs associated with on-premise solutions, such as, hardware and maintenance costs.

Compare cloud solutions with on-premise solutions

Once, we’ve evaluated the costs, we need to compare cloud solutions with on-premise solutions. This involves assessing the pros and cons of each solution based on the business requirements. For example, cloud services offer flexibility, scalability, and accessibility, whereas on-premise solutions offer greater control and security. By understanding the advantages and disadvantages of each solution, we can help the business make an informed decision.

Overall, cloud storage and compute costs can be a significant expense for businesses, however, there are strategies available to optimise these costs.

Section 2 - Cloud cost optimisation options.

Let's discuss a few strategies on how we can optimise cloud costs?

1. Plan, Plan, Plan

It's the most crucial step. While, we all want to move faster, however, the strategy must be based on solid planning and we must have clear answers to below: -

• Why we want to move to cloud - It's primarily depends upon business requirements and use cases and we must have the right set of questions along with right answers.
• What assets (applications, data etc.) can be moved to cloud - There are situations and needs, where we don't need to move everything to cloud, but some assets. For example, when we have huge volume of data, it makes sense to move the most high value data assets which can provide significant returns, instead of moving all data, as data storage is a recurring cost in cloud.
• Big Bang vs. baby steps - that is, moving to cloud in bulk/one go with all the assets or should the move be based on priority use cases? it can help us in ensuring we are on track, once we start the cloud journey with right set of benefits. which can be achieved through periodic evaluations. It can also help us in avoiding any surprises at a later stage, which is quite possible, if we go big-bang.

2. Understand the usage patterns - Another crucial step in optimising cloud storage and compute costs is to understand our usage patterns. This involves monitoring the usage of our assets and underlying cloud services, such as, storage and compute, to identify areas where we can reduce costs. By understanding the usage patterns, we can identify trends, anomalies, and areas for improvement.

3. Choose the right storage type - It's a good idea to choose the right storage type to optimise cloud storage costs. Cloud service providers offer various storage options, such as standard, infrequent access, and archive storage. By understanding the access frequency of our data, we can choose the most cost-effective storage option. For example, if we have infrequently accessed data, we can use infrequent access or archive storage to reduce costs.

4. Implement data lifecycle management - Data lifecycle management is a process of managing data from creation to deletion. Implementing data lifecycle management can help businesses reduce their storage costs by removing unnecessary data. By identifying and deleting unused or expired data, we can reduce our storage costs significantly and improve our data management practices.

5. Choose the right data format and compression algorithm - Using the right data format and compression techniques in the cloud can provide several benefits, including upto 45% to 70% reduction in storage cost:

6. Optimise compute resources - Cloud service providers offer various compute resources, such as virtual machines, containers, and serverless functions. By understanding our workload requirements, we can optimise, use of compute resources to reduce costs. For example, we can use server-less functions to execute short-lived, event-driven workloads to reduce the need for continuously running virtual machines.

7. Use reserved instances - Cloud service providers offer reserved instances, which are pre-paid instances that offer a significant discount compared to on-demand instances. By using reserved instances, we can reduce the compute costs by committing to a certain usage level for a period. This is an excellent option for workloads with predictable usage patterns.

8. Utilize auto-scaling - Auto-scaling is a feature provided by cloud service providers that automatically scales up or down resources based on demand. By using auto-scaling, we can ensure that we're only using the resources we need, reducing our overall compute cost

9. Monitor and optimise your cloud services regularly - It's essential to monitor and optimise our cloud services regularly. By regularly reviewing the usage patterns, identifying areas for improvement, and implementing cost-saving strategies, we can continuously optimise our cloud services and reduce your costs.

10. Consider hybrid solutions - Finally, in some cases, a hybrid solution may be the best approach. A hybrid solution involves using both cloud services and on-premise solutions to create a unified IT infrastructure. This approach can provide businesses with the best of both worlds, allowing them to take advantage of the benefits of cloud services while maintaining control over their critical data.

Conclusion

Overall, the ultimate goal is to provide businesses with a cost-effective and efficient IT infrastructure that meets their needs.

Overall, by choosing the right set of options, we can drastically reduce the cloud costs - upto 70% for storage and around 25% to 30% for compute. Further, to add, cost benefits analysis is moreover an ongoing process and needs periodic reviews and actions.

As an architect, we can help businesses evaluate their IT infrastructure and help in determining the right path forward.