How CIOs can optimise cloud spends

Moving to the cloud has many benefits including scale, agility and flexibility, however, many organisations end up spending millions of dollars on cloud services that they don’t need. According to NASSCOM, 82% of global organisations end up wasting more than 10% of their cloud spend, and another study by PWC found that 32% of cloud spend is wasted due to inefficiencies.

What’s causing this wastage? Overprovisioning, inefficient use of resources, and a lack of effective cost-optimisation measures all have a part to play. Given the speed of cloud adoption, it’s no surprise that rising cloud costs are one of the key challenges that businesses are facing in 2024 and beyond, but there is a fix.

Choosing the right storage option

The cloud offers businesses the ability to scale their resources up or down depending on demand. However, many organisations don’t use this benefit to its full potential, or struggle to gain clear visibility into cloud consumption. Choosing the right cloud storage option is central to extracting the best value for your business and to do this, organisations must consider performance, latency, and throughput requirements. Choosing the right instances requires analysis of the workloads, future growth, and resource utilisation. Different storage tiers, such as hot, cool, cold, and archive, must be selected based on data size and access pattern as organisations can only optimise cloud spend if it is viewed through the lens of broader business objectives.

Reducing cloud waste with observability

Identifying optimisation opportunities is essential to keeping costs contained, but challenging to execute if you don’t have the right tools at your disposal. Observability is a key capability that enables organisations to accomplish these tasks without compromising service levels. 

Observability provides organisations with a holistic view of the cloud environment, commensurate with the software and applications that service the digital products that organisations take to market. Combining observational data from cloud, software, and applications allows organisations to contain their cloud spending by proactively identifying right-sizing and optimisation opportunities without degrading the digital customer experience. Every business, workload, and environment is unique, and may have different requirements based on architecture constraints and business needs. By gathering comprehensive performance, consumption, and usage data, observability can help identify the right opportunities to optimise.

Achieving the optimal balance between price and performance

As well as offering complete visibility into all applications and infrastructure before, during, and after cloud migration, observability also accurately forecasts capacity. It can compare the size of cloud instances with their current utilisation, identify resources that are sizing larger than needed, and estimate the potential cost savings of adopting the optimised resource recommendation. It helps companies achieve the best balance of price and performance, aiding teams to allocate cloud resources where they can have the greatest impact on customer experience and business outcomes. 

Optimising cloud spend doesn’t have to be a highly technical or complex conversation. It can be easily managed with the right observability platform. By having the right data, dashboarding, and visualisations, swift action can be taken to keep cloud costs in check, and reclaimed spend can be reinvested into new technologies that drive the business forward. When the focus starts to shift from cost-cutting to optimisation, businesses can devote more time to building great products that delight customers and ultimately help the business thrive. 

Kris Day

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Kris Day is SVP Asia Pacific and Japan at New Relic.