Blogs / Cloud Optimization
7 Cloud Cost Optimization Metrics You Should Know
By
Harish K K [CTO]
Posted: December 09, 2022
• 4 Min Read
Cloud cost optimization is an integral part of the cloud transition journey of any modern organization. This helps to analyze cloud spending and resource utilization, identify mismanaged resources, and remediate flaws by adopting efficient practices and standards-driven processes. Advanced cost optimization tools enhance these solutions by providing accurate and tangible visualizations, allowing organizations to seamlessly align the budget with the spend.
A solution that provides usage and cost visibility combined with customized reporting and automated goal tracking will help you build a strong foundation for cloud cost optimization and financial management. The AWS Cloud Cost Intelligence Dashboard is one such platform that can provide comprehensive data about your cloud spend.
Cost Intelligence Use Cases
Cloud cost intelligence brings to the fore, cost information that is contextually relevant to comprehend how your business utilizes the cloud and granularly assess its financial impact. Cost Intelligence answers questions that may arise while optimizing cloud cost.
1. What are the areas I should focus on to optimize my cloud spending?
2. How can I track the outcome of my optimization efforts?
3. How do I access resource-level service usage data?
Cost Intelligence leverages Artificial Intelligence and Machine Learning algorithms to let you automate cost data from different sources and generate recommendations to eliminate unused or under-utilized resources and right-size them. For instance, you can track your AWS cloud spending on a detailed level using cost allocation tags. Once the tags are activated, AWS uses them to create cost allocation reports, making classifying and tracking your cost easier. This helps in pinpointing areas where you can lower unnecessary spending.
How To Set Standards For Cloud Cost Metrics?
Cost Metrics helps you visualize your cloud spending pointing out where you spend money in the context of your business. It comprises cost data logs generated from applications or infrastructure hosted on the cloud. Your organization can utilize them to identify, monitor, and respond to changes in the cost, security, and performance of your cloud environment.
Let’s have an understating of some of the cost Intelligence metrics to include in your cloud cost optimization strategies.
Important Cost Intelligence Metrics You Should Know
Transparency Metrics – Track where your money is being spent
Provides an accurate view of cloud spending at the intra-organizational level pertaining to each department in your organization.
Overall Spend
The overall spend metrics allow you to understand the total cost associated with your cloud infrastructure. If you are using a single cloud setup, this information is readily available on your generated bill. For hybrid or multi-cloud, you may need third-party cloud management tools to generate a combined bill from your multiple cloud accounts.
Utilized vs. Unutilized Resource Spend
These metrics allow you to identify idle and unallocated resources for optimizing costs. For instance, if you have multiple EC2 running with your AWS environment and most of them are idle and unallocated, you can optimize spend by using them to their full extent, right-size, or eliminate them.
Unit cost
Evaluating utilized and unutilized resource spend metrics allows you to understand cost patterns of operational units or resources and utilize these insights to analyze inefficiencies. Unit cost-specific metrics include costs per customer, feature, team, deployment etc. They allow you to track anomalous spending patterns associated with a single resource and modify resource allocation as needed.
Optimization Metrics – Achieve optimal cloud spending
Provides information to formulate cost optimization strategies for achieving optimal cloud spending.
Potential Savings
With a potential savings matrix, you can obtain information regarding the possible impact of cloud optimization strategies at a given point in time. Automated saving recommendations obtained from the cloud cost management platforms such as AWS Cost Intelligence Dashboard allow you to understand the potential savings opportunities you can attain, be it for purchasing Reserved Instances or eliminating unused cloud services.
Realized Savings
Not all potential saving opportunities convert into real savings. On the other hand, the realized savings metrics act as a measure to validate the surfaced cost-saving opportunities or the amount of actual savings achieved. These metrics help organizations evaluate whether they can implement the recommended cost optimization practices and plan the necessary strategies based on the information.
Forecasting Metrics – Predict the future impact of cloud spending
Provides cost forecast based on past consumption patterns to allow capacity planning and budgeting adjustments
Budgeted Spending Vs Actual Spending
These metrics make it easier to compare your expected or budgeted spend with actuals. They allow organizations to determine whether they are over or under budget making it possible to find efficient ways to manage their financial assets. Moreover, this facilitates future capacity planning and budget decisions enabling confident upfront commitments with the cloud service provider to maximize discount savings.
Forecasted Spending
With forecasted spending metrics, you can quantify the future impact of your cloud spending to avoid undesirable financial outcomes. Your finance management teams can compare forecasted spend with the current budget, ensuring predictability and accountability in your budget models.
Gsoft has cost intelligence capabilities baked into our cloud solutions helping organizations optimize and manage their cloud spending while ensuring security and resilience. With integrated support for multiple cloud-native and third-party cost optimization tools and platforms, we provide intelligent analytics, helping you focus more on your business rather than worry about optimizing costs. Request a demo to see how Gsoft turns your cloud metrics into powerful cost insights for your organization.
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