While there are many benefits to cloud computing, including accessibility, flexibility, and efficiency, it is still possible for a company to fall short on their cloud return on investment (ROI). This is mainly because many businesses fail to utilize their cloud services to their full potential. Fortunately, there are strategies you can use to manage and optimize your cloud use, allowing you to fully leverage your partnership with a cloud provider such as Liberty Center One, and maximize your cloud ROI.
Why do businesses fail to achieve ROI with cloud computing?
There are three main reasons why companies that utilize cloud computing services fail to achieve ROI:
- Failure to implement security early – Too many companies treat security as a band-aid they can apply during or after an issue, instead of something they should have incorporated from the beginning. Alternatively, they delay implementing security measures until after their cloud system is up and running, which can leave them with vulnerabilities that are difficult and time-consuming to fix. Either way, the result is excessive security costs that could have been avoided.
- Failure to research cloud platforms – Some companies fail to achieve ROI because they fail to do the research before partnering with a cloud service provider. This means they may choose the wrong platform or services for their specific needs, resulting in unexpected costs and inefficiencies.
- Failure to analyze operational costs – Companies can also fall short of ROI targets if they don’t properly analyze and anticipate operational costs. This means forecasting the total cost of ownership of their cloud system, including factors such as maintenance, support, and training.
Strategies to maximize cloud ROI
In order to avoid failures like the ones mentioned above, you need to implement strategies that will help you manage and optimize your cloud computing utilization. Through such strategies as the ones below, you will more likely be able to maximize your cloud ROI:
1. Consider reserved and spot instances
Instances are the virtual resources that replace physical servers in the cloud, and they come in many varieties. To maximize your ROI, you should focus on reserved instances (RIs) and spot instances (SIs).
- RIs usually allow for significant discounts because you pay in advance for a specific capacity over a set period instead of a subscription payment model. This makes RIs more suitable for consistent and easily predicted workloads.
- SIs consist of spare computing capacity that the provider auctions off, which means you can purchase them at a discount. While not as consistent as RIs, SIs can provide a little extra capacity at short notice.
By choosing the right instance type according to your predicted workloads, you can optimize spending.
2. Look for savings plans
Savings plans provide sizable discounts for committing to select instance types for a set period of one to three years. You substantially save costs by analyzing your data usage history, then identifying savings plans according to your predicted workload. In addition, savings plans require less management than RIs while offering more value for computing tasks that are not operating all the time.
3. Business hour scripting
Business hour scripting is the method of using automation tools to scale resource usage automatically according to business operating hours. This optimizes cloud usage during business hours by ensuring you are only using resources according to your actual business needs.
4. Application prioritization
Not all applications are compatible or optimized for the cloud. When you transfer to the cloud, prioritize application migration according to which applications will benefit the most from being on the cloud, which are usually the ones that are most expensive to run on-premises. Next, you should focus on the low-risk and easy-to-move applications, and only after that can you start migrating the most customized applications that will need to be completely readjusted at great expense.
5. Watch outbound data costs
Be mindful of outbound data transfers — data uploads to systems outside of yours — as different regions can have different transfer costs, which can reach exorbitant levels if you’re not paying attention. You can further save money by organizing digital resources by region, tracking data transfer costs, and choosing a cloud provider with a data center located somewhere that won’t drive up costs.
6. Track asset activity
Maintain visibility of your cloud assets to avoid resource redundancy and excess spending. By utilizing monitoring tools to track the activity of your assets, you ensure you are either using resources to their fullest extent or making adjustments as needed to optimize costs.
Learn to make the most of your cloud by speaking with a specialist. Contact Liberty Center One.