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Wasted Cloud Spending: Getting Amazon AWS, Microsoft Azure Costs Under Control

Businesses are moving their applications and storage to the cloud in droves. With all of that rapid movement to the cloud, many businesses are ‘buying’ more than they need, as they are still learning about current and future consumption requirements. Also, cloud solutions are so easily expanded, that it can be easy to ‘buy too much.’ When there really are no limitations on the resources you are allowed to use, you can end up with more than necessary.

RightScale, an enterprise cloud management company, has seen that companies waste, on average, 35 percent of their cloud spend. This equates to $6.4 billion in annualized wasted cost for AWS alone. For the top three public cloud providers (Amazon Web Services, Microsoft Azure, and Google Cloud Platform), this represents an annualized waste of $10 billion, RightScale asserts.

The company recently wrote a blog post about what generates the largest cloud spending challenges. The full post goes into great detail illustrating exactly what companies should be aware of when analyzing their cloud spend.

Some of the key areas of cloud spend waste from the findings are:

  1. Rightsize instances: Forty percent of instances are sized larger than is required for the workload and could be rightsized without impacting the performance of the application. Each oversized instance is wasting 50-75 percent, resulting in 11-16 percent of all cloud spend being wasted, RighScale said.
  2. Schedule VMs: Many virtual machines in the public cloud are left running 24×7 rather than being turned off during times that they are not in use. For example, shutting down development instances that are not used at night and on weekends saves 67 percent of the spend, RightScale asserted.
  3. Choose the correct regions: Thirteen percent of all cloud instances are running in more expensive regions, even though the cloud provider offers a less expensive location nearby. This results in three percent of all cloud costs being wasted, RightScale said.
  4. Utilize discounts: Companies find it difficult to choose the best discount options and forego savings that can range from 20-70 percent. For example, AWS has more than 60,000 discounting price points just for reserved instances, while Azure recently announced a new reserved instance offering, RightScale noted.
  5. Delete unused storage: Cloud users neglect to delete storage that is no longer used. Virtual machines are shut down, but the storage that was attached is often left running, RightScale concluded.

Cloud providers clearly need to be doing more to curb this wasteful spending. AWS recently claimed it saved AWS users $500 million by alerting customers when they were overpaying. Even with their automated tools, the providers could only be looking at one aspect of overpaying, such as rightsize instances, which would be easy to spot through an analysis of the usage. The companies could build in other analysis tools to give customers a better idea of where they are wasting money.

However, the responsibility should also be on the customers to perform regular checks and analysis of their cloud spending. Companies need to have a clear understanding of every line item on their bill and know exactly which ones are necessary and which could be eliminated. Create a checklist outlining these areas of waste and go through the list every 6 months or so and make sure your company is not wasting money on cloud space or services you don’t actually need.

PS: A growing list of companies offers cloud spending management tools. And the tools extend far beyond the IaaS world. Meta SaaS, for instance, helps customers to eliminate unused, underused or abandoned subscriptions. Special thanks to HTG Peer Groups Chief Innovation Officer Scott Scrogin for the Meta SaaS tip.

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