Cloud adoption facilitates enterprises to handle and process business critical data in relation to payrolls, customer profiles, purchasing histories, and financial transactions while empowering employees with on demand access to data anytime and from anywhere in the world.

Optimization of cloud cost presents an excellent avenue for cost savings. Cloud cost management must focus on vital steps to reduce or optimize costs of cloud instances.

Many organizations are decommissioning unutilized cloud instances and are finding ways to move to more cost effective regions of cloud systems. In addition to abandoning the cloud instances that are hardly accessed, enterprises are also taking steps to optimize use of underutilized cloud instances.
 
It is next to impossible to present a blanket estimate of cloud costs. This is because the extent of cloud adoption differs from enterprise to enterprise.

While contemplating the annual budgetary provisions to accomplish various objectives of an organization, the strategy has to deal with complexities of estimating cloud costs for individual organization.

Importance of multi-tenant arrangement to save cloud costs

Use of public cloud is a logical and sensible way to save costs of using cloud based solutions. Public cloud is a shared or multi-tenant system that allows multiple users to share resources of cloud system. However, one must be able to find a reliable cloud service provider to ensure security of data in a public cloud environment.

Many enterprises are adopting combination of public and private cloud services or a hybrid cloud. This is generally done to ensure that the most critical applications that are related to internal and mission critical data of the organization is managed by private cloud. Public cloud is adopted to carry out external applications to save costs.

Reducing the amount of data in cloud

There is another option to reduce cloud costs and it involves downsizing the volume of data that would be stored in cloud servers. It should be noted that by storing your data in cloud, you are increasing the cost of bandwidth especially when the stored data moves out. This is due to the fact that outgoing bandwidth costs are on much higher side.
 
It makes sense to hold certain volumes of data in the organizations own networks, rather than moving every bit of data to the cloud. This type of storage is often referred to as fog computing. You can ask data analysts to determine what data can be held back in the internal networks to reduce overall volume of data that would be moving through cloud gateway. Using cloud to store all data is nothing but splurging, according to stalwarts.

Being choosey can help

It is observed that many organizations adopt cloud in a haphazard way. Availing cloud services as a blanket option can have serious repercussions in terms of cloud costs. One should analyze the most important services that need to be moved to cloud and also find what cloud applications are being offered at reduced rates to arrive at final decision. 

Most of the enterprises use cloud services for the following services:

• Inventory management

• Supply chain management

• Payroll and HR

• CRM services

• New product development

The list can also include many more additional services that are being moved to cloud without considering total costs. Therefore, one needs to migrate only the most significant and vital services to cloud. Less significant services can continue to remain where they belong. This can significantly minimize cloud costs.

Cloud experts suggest that the basic intention to adopt cloud computing should be to enhance functionality of organization. One should spend some time to pick only few of the services and also study the cloud offerings that are beneficial in terms of discounts before taking the final call.
 
Taking a critical look at databases

One must move only the high caliber data to cloud servers. It is commonly observed that raw or unstructured data, duplicated files, unfinished workloads, can inflate databases. Such bloated data can result in unnecessary cloud costs.
 
There is no relevance of leveraging cost intensive cloud platform to store incomplete files, useless purchase histories, obsolete customer data, and so forth. By analyzing the nature of data that is being stored at cloud vendor’s servers one can significantly reduce cloud costs.
  
Comparing proposals and Service Level Agreements

Cloud costs can be minimized by studying service level agreements of different cloud vendors and choosing the most cost effective services. SLAs are important resources to understand the exact nature and extent of services offering in measurable formats.

These differ in terms of various services, minimum target levels, scope of services, fees, expenses, DR procedures, and clauses of termination for different cloud service providers.

It should be noted that purchasing or engaging cloud services is a highly complex transaction. Many cloud vendors rack up cloud charges for extra services or try to block your data for squeezing additional fees. Ideally, you should be able to find a trustworthy, reputed, and professional cloud service provider to avoid such issues.

One more vital aspect of cloud service is availability of network uptime. This needs to be critically analyzed at micro level since even a small event of downtime can lead to considerable loss of business.

These are some of the major initiatives one can adopt to minimize cloud expenditure. One should be able to analyze proposals of different vendors by digging deeper into various aspects and comparing every single parameter to arrive at the most optimum choice.