How To Create A Framework For Your Cost Optimization Strategy?


Vineeth Babu [Cloud Solution Architect]

Posted: October 11, 2021

• 4 Min Read

Enterprises are increasingly reaping rich dividends by migrating to the cloud. It enables innovation at scale, faster feature delivery, and quicker responses to evolving customer needs. But before starting your cloud migration journey, you should have a clear picture of the costs associated with the migration and tailor cost optimization strategies accordingly to reduce the expenses. 

With an intelligent cost optimization strategy, you can achieve operation excellence and high resilience and ensure top-notch performance while keeping your cloud costs under control. But creating a cost optimization strategy is not simple. It requires a comprehensive approach and a well-established framework that covers all the aspects of cloud migration. 

Here is a structured approach to creating a framework for your cloud cost optimization strategy.

  1. Plan
  2. The first task involved in building a cost optimization framework is to define the budget aligned with your projected consumption. At this point, key cost metrics must be defined in consultation with your stakeholders. You can set budget standards based on the relevant data derived from cost intelligence tools such as AWS Cloud Cost Intelligence Dashboards.

    Optimization Guidelines

  3. Select the right instance and storage types based on workloads

  4. Utilize reserved and spot instances based on projected utilization

  5. Choose resource regions wisely, factoring in cost variations and licensing spends

  6. Define inclusive cost metrics across services, capacity, utilization, availability, and performance

  7. Monitor
  8. The second phase involves continuous monitoring of your consumption costs. You can adopt the best cost optimization practices, techniques, and tools to track and control the utilization of your cloud resources.

    Optimization Guidelines

  9. Make use of container monitoring tools to identify costs and utilization at a service, feature, and node levels.

  10. Implement anomaly detection and alerting to detect idle resources, cost spikes, and policy violations

  11. Choose resource regions wisely, considering in cost variations and licensing spends

  12. Breakdown of costs by region, account, and team to enable granular cost controls

  13. Alerting on crossing critical thresholds

  14. Optimize
  15. In this phase, you can implement waste reduction strategies across cloud resources for storage, compute, and network utilization. Cost optimization is also possible by tracking under-utilized resources by increasing usage, resizing, or eliminating them.

    Optimization Guidelines

  16. Employ service-specific cost controls for Kubernetes engines, Compute engines, etc.

  17. Identify instances with low utilization, consolidate to fewer instances, and release idle external IP address

  18. Find and remove unused or unattached storage resources

  19. Implement Horizontal Pod scaling, Node auto-scaling, and load balancers

  20. Leverage IaC tools such as Terraform to automate infrastructure provisioning for minimizing errors

  21. Operate
  22. The operate phase emphasizes establishing budget controls and policies aligned with the operational model. A collaborative approach across all stakeholders is needed to keep the organization aligned with budget and strategy.

    Optimization Guidelines

  23. Clearly define and communicate cost governance, budget, and operational strategies across stakeholders

  24. Bring in accountability across the organization and define a RACI matrix for your infrastructure

  25. Adopt cloud cost intelligence to granularly assess the impact of costs on the financials of your business

  26. Every business has unique needs, and it is essential to tailor your strategy according to the specific requirements and constraints. An experienced cloud computing service provider can help you create and implement the best practices to achieve significant savings while maximizing the value of cloud computing solutions.

    With our rich experience helping organizations of all sizes transition to the cloud, Gsoft can define the right framework for your cloud migration journey in the most cost-effective way. Call us today for a free consultation.


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