How to Use Public Cloud Effectively and Save Costs

Cloud computing has revolutionized how businesses manage IT resources, offering scalability, flexibility, and efficiency. However, not all cloud strategies yield optimal cost benefits, especially when traditional approaches are applied to the cloud environment. To use the public cloud effectively and save costs, businesses need to embrace cloud-native services rather than just lifting and shifting existing workloads as virtual machines (VMs). This article explores strategies for effective cloud usage, including the benefits of leveraging Platform-as-a-Service (PaaS) and the drawbacks of using VMs in a traditional sense.

1. Rethink Cloud Adoption: Avoid Simply Migrating Existing VMs

Understanding the Lift-and-Shift Model

The lift-and-shift approach involves migrating existing on-premises workloads to the cloud without making significant changes to their architecture. While this method may seem quick and straightforward, it often fails to capitalize on the cloud’s potential for cost savings and performance optimization.

• Challenges with Lift-and-Shift:
  • Higher Costs: Running traditional VMs in the cloud can lead to increased costs due to the need for equivalent or higher levels of compute, storage, and networking.
  • Underutilization of Resources: Cloud environments are optimized for elasticity, but traditional VMs do not inherently scale up or down efficiently, leading to over-provisioning.
  • Limited Agility: Legacy applications in VMs are not designed to leverage cloud-native features such as autoscaling, managed services, and serverless computing, resulting in suboptimal performance.

2. Embrace Cloud-Native Services: Platform-as-a-Service (PaaS) and Beyond

What is Cloud-Native?

Cloud-native refers to building and running applications that fully exploit cloud computing models. Cloud-native services, such as PaaS, provide businesses with managed platforms where applications can be developed, deployed, and scaled without the complexities of managing the underlying infrastructure.

• Benefits of Cloud-Native Services:
  • Cost Efficiency: By using managed services, businesses can avoid the overhead costs of maintaining and scaling VMs. This includes patch management, OS updates, and infrastructure scaling.
  • Scalability and Flexibility: Cloud-native services can automatically scale resources up or down based on demand, ensuring that you only pay for what you use.
  • Reduced Time to Market: PaaS services simplify the development and deployment process, allowing teams to focus on building features rather than managing infrastructure.

Key Cloud-Native Services to Consider

1. Platform-as-a-Service (PaaS): Ideal for applications that need to be developed quickly and scaled efficiently. Examples include AWS Elastic Beanstalk, Google App Engine, and Azure App Services.
2. Serverless Computing: Allows you to run code without provisioning or managing servers. It charges only for the compute time used, making it cost-effective for sporadic workloads. Examples include AWS Lambda, Azure Functions, and Google Cloud Functions.
3. Containerization (Kubernetes and Docker): Containers allow you to package applications with their dependencies, making them more portable and easier to manage. Kubernetes orchestrates these containers, providing automated scaling and self-healing capabilities.

3. Considerations for Workloads that Remain On-Premises

When to Keep Workloads On-Premises

For certain workloads, especially those that do not need the scalability or flexibility of the cloud, staying on-premises might be more cost-effective. Here’s why:

• Predictable Workloads: If your applications have predictable resource needs, running them on-premises can be cheaper than cloud VMs, where you pay a premium for on-demand scalability.
• Regulatory and Compliance Requirements: Some industries have strict data sovereignty or compliance requirements that make on-premises hosting a safer choice.
• VM-Centric Architectures: Workloads that rely heavily on traditional VM-based architectures, with no immediate plans to refactor, may incur higher costs in the cloud compared to well-maintained on-premises environments.

4. Strategies for Cost Optimization in the Cloud

To make the most of cloud economics, businesses should adopt the following best practices:

4.1 Right-Sizing Resources

Regularly analyze your cloud usage and right-size your resources to match your actual needs. This involves scaling down VMs, selecting appropriate instance types, or moving to more efficient cloud-native services.

4.2 Utilize Reserved Instances and Savings Plans

Cloud providers offer reserved instances and savings plans, which provide significant discounts if you commit to using resources over a one- or three-year term. This is particularly beneficial for workloads with steady, predictable usage.

4.3 Automate Scaling and Use Spot Instances

Automation tools can help scale resources dynamically based on real-time demand, ensuring you’re not paying for idle resources. Spot instances offer unused capacity at a fraction of the cost but are best suited for non-critical, interruptible workloads.

4.4 Leverage Cost Management Tools

Cloud providers offer built-in cost management tools that help monitor spending and identify opportunities for cost reduction. Tools like AWS Cost Explorer, Azure Cost Management, and Google Cloud’s Cost Management provide insights into cloud usage patterns and offer recommendations for savings.

Conclusion

Using the public cloud effectively requires a strategic approach that goes beyond migrating existing workloads as VMs. By embracing cloud-native services like PaaS, serverless computing, and containerization, businesses can unlock the full potential of cloud computing, achieving greater cost efficiency and scalability. For workloads that don’t benefit from cloud migration, keeping them on-premises might be the more cost-effective solution. By understanding these dynamics and leveraging cloud-native technologies, businesses can maximize their investment in the cloud and drive operational excellence.