How Enterprises Can Better Manage Cloud Costs

May 27, 2022 / Cloud


Digital transformation means that enterprises are moving more of their services to the cloud. While this is a more cost-effective and cap-ex-friendly solution when compared to in-house IT operations, many companies have seen their cloud costs spiral during a time of economic uncertainty. Finding ways to better manage cloud costs while ensuring that the company stays on its upward trajectory can be a challenge. Here, we look at some of the things firms can do to manage cloud costs more effectively.

Choose a pay-per-use pricing model

Cloud providers offer two options when it comes to pricing: fixed and scalable. A fixed pricing model provides organisations with a solutions package that includes a pre-set amount of storage, networking and compute resources. Such solutions are usually subject to a minimum term contract, often for twelve months and renewable at the end. Scalable pricing models differ in that enterprises are charged only for the resources that they use.

The benefit of scalable pricing from a cost management perspective is that rather than pay a flat monthly fee regardless of whether all the resources paid for are utilised or not, companies only pay for what is needed. This means costs can be lower during less busy months but, importantly, ensures that if required, resources can be acquired at the push of a button.

Employ a cloud manager

One of the reasons cloud costs can go out of control is if there is no one assigned to oversee its use. By creating the position of company cloud manager, someone with the responsibility to authorise requests to use the cloud, it is possible to ensure that usage remains in line with company criteria, procedures and limits. This helps keep costs under control as departments or individual employees will need to go through a gatekeeper before being able to use the cloud and this will prevent resources from being deployed unnecessarily or wastefully.

Additionally, if the cloud manager is given control over the ordering and approval of company-wide cloud procurement, it will ensure that departments wanting to obtain cloud services independently of the IT department have to get authorisation first.

Monitoring cloud use

Monitoring is an effective way for companies using a scalable pricing model to save money. For example, by analysing app performance and user experience, it is possible to see if the application performs well in a cloud environment and whether it delivers users the experience intended. The analysis should also indicate how resources are used, including in periods of high demand, and this should indicate how cost-effective an application is to run. Cost optimisation tools, meanwhile, can give insights as to where cost savings can be made.

Where continuous cloud monitoring is in place, further savings can be made as performance optimisation and resource scaling can be automated. As a result, resource needs are constantly maintained while costs are effectively controlled.

Manage storage

While scalability is helpful for acquiring additional, temporary resources, its main benefit is for handling peaks and running processes. Temporary solutions aren’t that helpful for storage, however, as the amount of data that most companies collect is generally on the increase.

Housing ever-increasing volumes of data does impact cloud costs, but with better data management, those costs can be minimised. This is because a lot of data that enterprises keep is duplicated. How many individuals across a company, for example, save their own version of a file or a dataset to the cloud? Unifying data across the company and storing it centrally means that only one copy of each is needed, as everyone with permission can access it. As a result, all those duplicates can be deleted, which, in a sizable company, could amount to a significant reduction in costs.

Avoid overprovisioning

Many enterprises migrating to the cloud from in-house dedicated servers automatically assume that they need the same resources that were available in-house. This is not always the case. Many in-house servers are underutilised, often deliberately to provide the necessary redundancy to cover peaks.

Monitoring in-house usage prior to migration is a much more effective way to gauge provisioning requirements than simply adding together the total capacity of in-house machines. This way, by understanding exactly what resources an application needs, overprovisioning can be avoided.

Improve app efficiency

The resources an application uses can increase the cost of running it in the cloud. However, by making it run more efficiently, resource usage and costs can be reduced. A typical example is the company website: if caching, script minification and compression were utilised, the demands on the server would be reduced along with website loading time and the cloud costs.

Get licences from the vendor

In-house, every company has to pay for their own software licences and this can be costly. This is not necessarily the case in the cloud. Firstly, there are many open-source cloud applications that might be able to replace the proprietary app currently in use and, if not, cloud vendors often have agreements with software developers whereby they can provide the licence at significantly less expense. Additionally, firms should check whether their current licence will still be valid in the cloud – many developers do allow this.


While the cloud is already seen as a more cost-effective solution to in-house data centres, managing costs is essential as its use proliferates. Hopefully, the suggestions for cost management provided here will help enterprises make even more effective use of the cloud. 

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  • Thomas Worthington

    I am an enthusiastic and original writer who loves to share my skills and views on website hosting, development and technology. I am curious and eager to learn about the latest advances and innovations in the web industry, and I always make sure to provide accurate and helpful information to my readers.

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