From on-premise to cloud

‍

Moving from on-premises to the cloud is a transition from a fixed cost model to a variable cost model. 

Organizations on their cloud journey tend to forget this.

This can be compared to riding a car you own and a taxi. Riding on a self-bought car gives you the freedom to drive around without too much thinking since gas is already in the tank. With a taxi, however, every mile is counted on the meter. If you don’t have in mind where to go, the meter will still run and add up.

Variable costs ask for continuous monitoring of the usage and adjustments.

Some best practices to counter uncontrolled cloud spending are:

1. Cost visibility: whether daily, weekly, or monthly basis, dashboards on the KPI that matters need to be readily available – at all time. This requires a shared understanding of engineering, product and finance to see how resources are being utilized and where the costs are incurred.
2. Budget limits: slips should be expected under human interventions, that’s why alerts and thresholds must be in place. Notifications can be sent in real-time on platforms like Slack and Teams when expenses near the limit.
3. Reserved capacity and savings plans: define stable workloads with consistent usage on a 30-day lookback period (but always keep in mind seasonality!) and data visualizations that look at usage trends and variability.
4. Discounts and spot instances: dev or test environments can cope with short-term interruptions, making them ideal for spot instances. 
5. Tagging and resource grouping: filters based on dimensions such as project, department, customer, application or environment is life-saving to track allocation and spending much easier.
6. FinOps governance and cost control: policies need to be derived from realistic usage forecasts and automated where possible to serve as a self-serve center. For example, an engineer will need to know how much budget they’ll have for a project before kick starting development.
7. Cost management tools: FinOps or cost management tools allow you to monitor, analyze, and control your cloud costs. Utilize these tools to track your usage, set budgets, receive cost alerts, and generate reports for cost optimization purposes. 

Remember that the variable cost model in the cloud offers flexibility, scalability, and potential cost savings. However, it requires ongoing management and optimization to avoid unexpected expenses. 

At CloudVerse.AI, we have a perfect platform for Cost & Usage Monitoring, Cost Allocation, Cloud Governance and Cost Optimization across multiple cloud service providers like AWS, GCP, AZURE, HUAWEI Cloud, ALI Cloud, TENCENT Cloud.

‍