Tackling a Rising Cloud Computing Cost

These days, everything just seems so expensive! Necessities like eggs and gas are steadily rising, with luxuries only hiking up in price as well. Now more than ever, cutting costs wherever available can set you and your company up for success. But on the topic of cloud computing cost, where do you even begin?

Cloud costs are some of the biggest contributors to IT spending in tech companies across the world, and for good reason. Many companies rely on cloud providers to supply them with storage, compute, networking, and so many other resources – the fact of the matter is, these resources aren’t cheap. While cloud bills are made up of simple components, these components can quickly get out of hand if not managed properly. However, there are ways to stay ahead of the curve.

We wrote about some ways you could optimize your cloud costs, with some standout options being rightsizing, finding cloud discounts and savings plans, and even using multiple clouds. But to lower your cloud costs, you first have to understand what elements are driving it up in the first place.

The Costs of Cloud Computing

Cloud computing delivers compute services directly over the internet, offering flexibility, innovation speed, reliability, and even cost savings from time to time. Cloud computing services include servers, storage and databases, networking, and support- to name a few. With these services in mind, cloud computing costs can be boiled down to these specific elements in most cases:

Compute Costs

Compute costs are the foundational offering from cloud providers, including (but not limited to) CPUs, RAM, VMs (virtual machine), GPUs, and much more. “Compute” is generally a blanket-term used to describe everything that cloud providers offer, with compute resources being provided as VMs or instances within public cloud settings

Measured by compute power and charged by compute power and operation duration, these resources are necessary in smoothly running and scaling any computer program in all environments.

Storage Costs

Storage is a set commodity in cloud computing, with storage servers being maintained by third parties so cloud users don’t have to go through the hassle. Data is often stored within multiple VMs in data centers or within physical machinery.

The most common storage costs are storage usage and storage classes, with providers being able to scale both up or down depending on users. One of the most popular pricing models for cloud storage is pay as you go pricing, allowing users to spend wisely on their storage depending on how much they use while charging them by GB of data stored/month.

Networking Costs

Networking costs refer to data transfers both in and out of the cloud and across different zones and regions. These costs also extend to networking-related services like load balancing and using specific gateways and connections.

Service Costs

Cloud providers typically offer services on top of their compute offerings. These services are often in the form of managed services, with some of the most common being managed databases, managed Kubernetes, infrastructure-as-code (IaC), and even some AI/ML services.

Typically, services offered by cloud providers are charged on a per-hour rate.

Support Costs

Cloud resources are accessible, but can be hard to maintain at times.

Cloud providers offer expert around-the-clock support for their users, with tiers ranging from free to critical enterprise support. Support is typically charged as a monthly subscription

Licensing

Proprietary software carries licensing that must also be paid.

These charges represent a typical cloud bill, with some factors being subject to change based on usage and company. For the most part, under keen management and right budgeting, these costs won’t go out of control. However, many cloud users have reported being sidelined by hidden cloud costs.

Factors That Attribute to Rising Cloud Costs

For something as supported as cloud providers, why do many users find themselves surprised when seeing their monthly cloud bill?

The case for many users, especially those new to cloud computing, is having unexpected price hikes on their cloud bill. This may happen for a variety of reasons: overprovisioning, lack of management and resource oversight, or simply lack of knowledge on resource cost. Whatever the case may be, it is undeniable that seeing a high and confusing charge on your cloud bill will leave a sour taste in anyone’s mouth.

Here are some of the hidden costs that can drive up your cloud spending:

Data Transfers

Data transfers are part of the networking cost of cloud computing, representing the in and out movement of data across environments. While data ingress - or inbound transfer - is typically free, data egress - or outbound transfer - are usually on the more expensive side of things, with research from the IDC showing that egress charges represent roughly 6% of cloud storage costs.

Outbound data transfers are costly for a variety of reasons:

• Transferring data across different availability zones requires tons of bandwidth and can possibly incur additional charges
• To protect outbound transfers, you might need duplicate data sets 
• Egress cost is purposely to keep you operating within a certain cloud

While data egress costs aren’t necessarily outlined in your cloud contracts, the cost behind it is certainly intentional. And with egress costs rising, many organizations, particularly startups, have found themselves settling and operating within that same cloud to avoid short-term fees.

Data migration doesn’t have to be expensive, however. Lyrid offers a means to move your data from one cloud to another, without breaking the bank!

Idle Resources

Have you ever left a light on in another room or something plugged in, and then noticed your electricity bill go up slightly? While the changes month to month on your electricity bill aren’t likely something to stress about, running idle resources can hike up your cloud bill considerably

Idle resources refer to provisioned resources that aren’t being utilized to their fullest potential or aren’t actively being used at all. While this doesn’t seem like the most harmful thing, the kicker is that these resources actively incur costs, with even the smallest resource having a huge impact on your cloud bill. These resources come in various forms, including:

• Overprovisioned resources, or resources that are too large for their workload
• Unused storage volumes
• Inactive load balancers
• Idle databases and test environments
• Unattached IP addresses
• Underutilized VMs

Combatting idle resources isn’t just as simple as adjusting usage. It requires organizational change, new monitoring and visibility tools, reworking your current environments, and cross-functional assistance. Although upheaval will undoubtedly require tons of resources, the costs saved from idle resources running will be massive.

Cloud Service Overhead

When using cloud services, many people tend to forget about licensing and managed service fees, as well as things like premium features. This overhead can cost you in the long run, with proprietary tech within a certain cloud vendor keeping you locked into paying these costs.

These overhead costs may also present themselves as third-party marketplace charges, with external vendors charging whatever they deem fit.

Vendor Lock

A huge threat in the cloud community is vendor lock in, a practice in which companies are locked into a specific cloud service provider. Vendor lock comes as a result of a multitude of reasons:

• Migration from that cloud service is extremely costly
• Solutions built on top of proprietary tech only offered within a specific provider prevent migration
• Lack of technical knowledge prevents migration efforts
• Contractual commitments keep users in based on long term commitments

While working within a cloud might be beneficial initially, especially with credits offered in enrollment, that same cloud might be detrimental to your budget down the line. Migrating from a cost-heavy cloud and working with multiple clouds and open-source technologies offer stronger cost savings as well as new development opportunities.

Premium Support

As mentioned before, there are different support tiers and pricing. Depending on whether you utilize cloud support to its fullest extent, higher tiers might be costly towards your IT budget.

In many cases, hidden fees are some of the biggest contributing factors to high cloud bills, even driving away first time cloud users. But how can organizations combat these bloated costs?

Tackling Rising Cloud Costs with Lyrid

For many cloud users, bills are often predictable with the right monitoring tools and practices. However, many hidden cloud costs have startled cloud users in the past, contributing to the long list of cloud horror stories shared by the community.

Wrangling cloud costs out of control is a must for companies being bombarded with heavy cloud bills. Despite long term benefits, this process is extremely resource intensive and difficult to approach, even proving to be detrimental to your application’s wellbeing if you aren’t well versed in migration. This is where Lyrid can help.

Lyrid.io is a multi cloud solution that enables organizations to develop confidently and deploy affordably. Working across multiple cloud platforms and even within bare metal machinery, Lyrid offers a means to escape from your current cloud vendor, bypassing pesky costs that might be inflating your cloud bill. Unlike accruing traditional cloud infrastructure costs, Lyrid works with local data centers to offer competitive pricing. 

Lyrid offers features to help curb your cloud spend, including:

• Automated resource allocation
• Hosting optimizing through local cloud infrastructure and global data center network
• Transparent cost control
• Vendor-agnostic solutions

And so much more!

To learn more about how Lyrid can help you save on your monthly cloud bill, visit https://www.lyrid.io/cloud-cost-optimization .