5 Leading Principles of Cloud Cost Optimization

As organizations across industries rapidly deploy and invest in next-gen cloud applications and solutions to meet demands, controlling cloud costs can be challenging. But it doesn’t have to be. In today’s ever-evolving landscape, cloud cost optimization holds the key to unlocking valuable business opportunities and efficiencies to drive organizations forward. However, when it comes to embarking on a journey to meet business objectives by maximizing cloud opportunities, where do enterprises begin?

Sure, many tools and techniques are available to enable businesses to gain insight into cloud cost optimization. But it can be an overwhelming landscape. Our recommendation? Focus on fundamental principles to effectively right-size your deployment and ensure that you’re getting the most out of the cloud. 

As a premier Google Cloud Partner, we know first hand how to leverage cloud cost optimization best practices to deliver value and savings. Maven Wave’s expert team works closely with the world’s most influential companies to solve complex challenges while mitigating spending risks and avoiding common pitfalls.

In this blog, we’ll take a deeper dive into the top principles and tips of cloud cost optimization across Google Cloud’s flexible portfolio of solutions, so business leaders can reap the full benefits of their cloud resources. Whether you’re in the early stages of migrating to the cloud or have existing cloud resources and applications, you’ll want to review these principles and practices before jumping in or auditing your existing environment. Keep reading to learn more, and click here to download the full guide. 

1. People and Processes

When it comes to cloud cost optimization, the people and processes involved play a key role in achieving success. Executive teams, project leads, finance, and site reliability engineers (SREs) all need to be aligned. As an initial step, these key players should create a set of company standards that outline desired service-level profitability, reliability, and performance. To kickstart this initiative, we recommend establishing a tiger team, a group of specialists formed to work on achieving these specific goals.

Creating company-wide standards for what type of resources are available and when to deploy them is paramount to optimizing cloud costs. As enterprises make the initial shift from an on-premises capital expenditures (CapEx) model to cloud-based operational expenditures (OpEx), enhanced visibility into their utilization data – a key benefit of a cloud environment – can sometimes be viewed as negative. The ability to track and measure each cloud resource independently, coupled with an engineering team that can spin up resources as desired to run their services optimally, can lead to wasted resources. Surprisingly, one of the most desirable cloud features — elasticity — is also sometimes perceived as an issue. From an unexpected spike in a bill to rising costs associated with employee negligence, such as an unneeded high-CPU VM running over the weekend, one way to fix this problem is to organize and structure your costs in relation to your business needs. You can then drill down into the services using Cloud Billing reports to get an at-a-glance view of your expenses. 

Additionally, you can also get more granular cost views of your environment by attributing costs back to departments or teams using labels and by building your own custom dashboards. By employing this approach, you can label a resource based on a predefined business metric, then track its spending over time. Longer-term, the goal isn’t to understand what you spent on Compute Engine last month, but what it costs to serve customers who bring in a specific revenue amount. This type of analysis is something businesses should strive to create. 

2. Value vs. Cost and Automation

The goal of the cloud shouldn’t merely be to cut costs, and in the cloud cost optimization arena, it definitely isn’t all about cost-cutting. By tackling essential questions at the jump and creating a unit economics model, companies can build a system that enables them to answer critical questions and audit their behavior. This plan is best suited for companies in the walk state to employ some of these concepts as they design their system for the future.

It’s difficult to implement standards retroactively; that’s why it’s imperative to integrate standardized processes from the start and ensure that you are systematically enforcing them consistently. Automation tools can help create safeguards before you deploy a cloud resource. At the same time, deploying, structuring and labeling resources for effective cost management is also important. It’s best to adopt the simplest structure that satisfies your initial requirements, then adjust your resource hierarchy as your needs evolve.

For best results and best practices, IT leaders should meet regularly with the appropriate teams to review usage trends and adjust forecasting as necessary. The Google Cloud Billing console makes it easy to review and audit your cloud spend regularly, while custom dashboards provide more granular cost views. Without regular reviews and appropriate unit economics, as well as visibility into your spend, it’s hard to move beyond being reactive when you observe a spike in your bill.

3. Leveraging the Tools of the Cloud

Cost management on Google Cloud relies on three broad kinds of tools: cost visibility, usage optimization, and pricing efficiency. These tools can be applied when evaluating and setting up standards for various parts of your cloud infrastructure. Across Google Cloud, cost visibility gives you insight into spending and billing detail, and the ability to display how (or why) you spent a specific amount to achieve a business outcome on a near-real-time basis. You can also use cost controls like budget alerts and quotas to keep your costs in check over time, among other features.

Resource usage optimization allows you to implement a specific set of standards that draws an appropriate intersection between cost and performance within an environment. This is the lens to look through when reviewing idle resources, better services on which to deploy an app, or even whether launching a custom VM shape might be more appropriate. You can also use Recommender to help detect issues like under- or over-provisioned VM instances or idle resources. 

Pricing efficiencies such as sustained use discounts, committed use discounts, flat-rate pricing, per-second billing, or other volume discounting features allow you to optimize rates for a specific service. These priceless capabilities are best leveraged by more centralized teams within your company, such as a Cloud Center of Excellence (CCoE) or FinOps team that can lower the potential for waste while optimizing coverage across all business units. This is something to continue to review both pre-cloud migration as well as regularly once you go live.

4. Optimizing Compute, Storage, and Network Costs

There are many dynamic ways to optimize your Compute Engine costs. Monitoring your environment and taking control of your usage patterns is vital to understanding the best options to start with. Once you establish your baseline costs, you have a wide variety of implementation strategies to choose from, depending on your workload and current operating model. Billing reports have a multitude of functions that help to achieve optimization goals. From applying Compute Engine’s rightsizing recommendations and committed use discounts to using Cloud Functions to automate the cleanup of other Compute Engine resources, businesses can save a lot of time and money. Another great way to save on costs is to run only as much capacity as you need when you need it. In the cloud, you can leverage autoscaling to automatically flex to increased capacity only when you need it. 

Consider the various ways to sharpen your company’s storage toolbox to cut costs and help save space and some cash in a strategic and automated way. Google Cloud Storage features a robust API that integrates with a vast array of services and includes features to help you follow the cloud cost optimization principles of usage optimization, cost visibility, and price efficiency. Having a scalable, limitless storage service is a critical benefit of Google Cloud Storage. 

However, storing items incurs costs over time, and the first step is creating a practice around how to identify the usefulness of an object or bucket to your business. Using a Cloud Storage lifecycle policy, you can instantly tag an object for deletion once it has met the minimum threshold for legal compliance needs, ensuring you aren’t charged for retaining it longer than is needed. To make this simpler, Cloud Storage has a bucket lock feature to minimize the opportunity for accidental deletion. If you’re concerned with FINRA, SEC, and CFTC, this is an incredibly useful feature. Bucket lock may also help you address specific healthcare industry retention regulations.

When reviewing your overall networking spend strategy, VPC Flow Logs, keep a record of the network flows sent from and received by VM instances. Each flow log entry records details such as source IP, destination IP, and bytes sent and received for each network connection—exactly the type of information needed when trying to understand your network traffic. These logs are collected in Cloud Logging, and you can then export them to BigQuery to help visualize your trends. For detailed instructions on how to enable VPC flow logging, click here.

5. Optimizing Data Analytics Costs

Data is everywhere. An Enterprise Strategy Group (ESG) analysis revealed that BigQuery, Google Cloud’s serverless enterprise data warehouse, can provide up to a 26% to 34% lower total cost of ownership (TCO) over three years compared to other cloud data warehouse alternatives. But, there’s still room for optimization. One particular benefit of optimizing costs in BigQuery is that those optimizations also yield better performance because of its serverless architecture, so you won’t have to make stressful tradeoffs of choosing performance over cost or vice versa.

BigQuery offers several other best practices you can apply to optimize costs. From avoiding duplicate copies of data by configuring default table expiration to setting up controls for accidental human errors and temporary staging data that you don’t need to preserve, the possibilities are endless. 

Maven Wave has the expertise and experience to help guide your organization in the right direction. Download the full guide Understanding the Principles of Cost Optimization for more in-depth insights on this topic. 


September 24th, 2020

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