How to optimise cloud usage and spend with Claranet

We covered the first approach in our previous article, where the focus was on gaining visibility of your cloud spend. This next article explains how you can identify cost-saving opportunities to drive long-term cost reduction by strategically analysing your resource consumption.  

Organisations struggle to manage cloud costs and optimise spending  

Uncontrolled spending can impact overall IT budgets and business growth; according to research, only 42% of organisations’ cloud costs are where they should be. In addition, underutilised resources contribute directly to unnecessary expenses. Without sufficient visibility, tracking and analysis, it's difficult to understand where cloud costs are being incurred and how effectively resources are being used.  

In order to reduce overspend on cloud services that exceed your requirements, you can consider implementing auto-scaling policies to adjust resource allocation based on workload fluctuations. Load balancing will distribute incoming traffic across multiple instances to optimise resource utilisation and reduce over-provisioning. By right-sizing your resources to match workload and data access demands, you can significantly reduce cloud costs. You can also minimise data transfer costs by strategically locating resources in the same region or availability zone, optimising data transfer routes and leveraging content delivery networks (CDNs) to cache frequently accessed content closer to end-users.  

Improving cost visibility

Cost optimisation is important, but it's a byproduct of good financial management. FinOps provides the intelligence required to optimise your cloud infrastructure but without being a cloud expert, it can be hard to know where to begin. Developing a cost-effective Cloud FinOps roadmap is not an easy task, especially if you don’t have in-house experts. The goal is to maximise business value, ensuring that cloud spending is aligned with business objectives and resources are used efficiently, without compromising performance. Once the informed phase is completed, insights gained can be used to proactively optimise cloud usage and spending while also eliminating unnecessary cloud waste and ensuring that resources are used efficiently.  

A Managed Services Partner like Claranet can help you with this process. Claranet’s FinOps services offer the strategic guidance and analysis to optimise cloud spending. Our technical expertise and knowledge are built on the skills of our people and based on the highest industry standards.

Reservation management  

FinOps reservation management focuses on optimising the use of reserved instances to minimise costs. Regular review and adjustment ensure you leverage the best, most compatible pricing model. For example, if you buy a virtual machine on pay-as-you-go rates from Microsoft, you will be charged significantly more than if you commit to a 12-month contract with a discount.

AWS, for instance, offers Reserved Instances, which are discounted pricing options if you commit to a specific usage volume over a designated term. Leveraging these options can lead to substantial cost savings for predictable workloads, saving up to 69% over on-demand rates when used in a steady state.  

However, be mindful that you may not want to switch every virtual machine in one go to obtain the discount. Do you actually need every virtual machine for the next 12 months, or could you delay purchasing for three or six months? At Claranet, we talk to our clients about how to maximise their commitments to hyperscalers like AWS, Microsoft and Google to ensure they get the best pricing discounts.  

Spend monitoring  

Monitoring your cloud spend is about more than just cost optimisation; it’s about having sufficient visibility of your expenditure. You can’t optimise anything without knowing what exists. The Flexera 2024 State of the Cloud Report indicated that an average of 32% of cloud budgets were not fully utilised. With 31% of enterprises spending over $12 million on public cloud services every year, that’s a huge amount of waste. The key is to identify who is spending what to get tangible visibility of expenditure. For example, is it your North American regions or the global platform?  

Cloud cost auditing  

Once you have assessed areas of usage and spend, plus identified potential vulnerabilities, inefficiencies or areas for improvement, you can focus on cost optimisation.  

A Well-Architected Review (WAR) is a systematic assessment of your cloud architecture. Conducting a WAR will help you identify critical issues and prioritise solutions to those problems, as well as mitigate any unnecessary expenses associated with your cloud infrastructure. You can assess whether you’re following the Cloud Adoption Framework (CAF) and determine which areas of the framework you need to improve. It’s an important resource if you’re building and running workloads on AWS, as it helps optimise multiple areas of your cloud systems, including performance, cybersecurity and cost efficiency.  

The CAF framework is divided into five pillars:  

• Operational excellence   
• Security   
• Reliability   
• Performance efficiency   
• Cost optimisation  

Following the Well-Architected Review and Cloud Adoption Framework can be a challenge; it’s easy to make mistakes or overlook certain elements when building and running workloads on AWS.  Claranet’s cloud optimisation assessments are extremely comprehensive and our technical expertise and skills are reflected in the support and services we offer 10,000 business customers worldwide. In 2013, we joined the AWS Partner Network (APN), and in 2016, we became one of the first 10 European AWS Managed Service Provider (MSP) Partners to achieve Premier APN Consulting Partner status.  

Find out how you can uncover opportunities for long-term cost optimisation - download our eBook today.