Price caps: Keeping public cloud costs under control

In this guest post, Richard Blanford, managing director of cloud services provider Fordway, shares his top tips on what IT departments can do to curb public cloud overspend.

As the costs of public cloud services continue to fall, moving services off-premise increasingly looks like a sensible business decision. However, there is much more to running a service than server capacity, and if organisations are not careful their costs can quickly spiral out of control.

To keep public cloud costs in check, in-house IT teams need to educate themselves on cloud charging models, and develop new skills to ensure overspend is avoided.

Get the skills to pay the bills

The first key skill is to ensure you understand the characteristics and requirements of the service or application being moved to the cloud.

Software-as-a-Service (SaaS) is pretty straightforward, whereas Platform-as-a-Service (PaaS) and particularly Infrastructure-as-a-Service (PaaS) are where design expertise is needed to ensure the applications and services being moved fit with your target cloud provider.

Secondly, once migrated, your team will need the ability to decipher cloud usage reports and invoices.  As well as the known costs for servers and storage, there will be additional ones for ancillary requirements such as IP addresses, domain resilience and data transfers into, out of and between servers.

As an example, for an IaaS instance on Amazon Web Services, there are a minimum of five and potentially eight metered costs that need to be tracked for a single internet-facing server. Microsoft Azure and other public cloud providers are comparable.

The complexity increases if the organisation is hosting complex, multi-server environments.  If other elements are required to run the application, such as security, resilience, management, patching and back-up, these will appear as additional charges.

This is less of an issue with SaaS as it usually has a standard per user per month charge, but with IaaS, and to some extent PaaS, other elements are added on top.

Having worked out the origin of each cost, a number of relatively simple and quick analyses can be done to identify the main reasons for any overspend. The key is to understand the likely use of each application.

Telling apart the cloud types

All public cloud services are metered, which can be both good and bad. If the way your applications work has been factored in when designing services prior to moving them to cloud, you are more likely to avoid unpleasant surprises.

In many services there is a cost per GB each time servers in different domains talk to each other, and a second cost per GB to send data over the internet.

For example, in AWS you are charged if you use a public IP address, and because you don’t buy dedicated bandwidth there is an additional data transfer charge against each IP address – which can be a problem if you create public facing websites and encourage people to download videos.

Every time a video is played, you’ll incur a charge, which may seem insignificant on its own but will soon add up if 50,000 people download your 100MB video, for example. In some applications servers have a constant two-way dialogue so costs that initially seem small can quickly escalate.

The same issue applies with resilience and service recovery, where you will be charged for transferring data between domains.

To understand costs accurately you need to know the frequency of snapshots, how big those snapshots are and the rate of data change.

AWS and Azure charge resilience in different ways; both will keep a copy and bring it up if a host fails, but with AWS you need a different type of service and pay extra, whereas for Azure it is included as standard.

There is also an array of options available for storage, Azure has five options to choose from, and each has different dependencies, as well as a whole new set of terminology.

All these need to be understood, compared and evaluated as part of choosing a service.  If you find storage and back-up costs escalating, IT staff need to take action to prevent the situation getting worse.

The best way to avoid unexpected costs is to look closely at the different types of service available, such as on-demand, reserved or spot instances, before moving to public cloud, and match your workload and requirement to the instance type.

Reserved instances are much cheaper per hour than on-demand, but you are then tied in for a specified period, which means you are unable to move quickly should a better commercial option be introduced. If an application is not optimised for public cloud, consider retaining it in-house or use a managed cloud service with agreed, predictable costs.

Finally, the pace of change in public cloud is very rapid; new and enhanced services are frequently introduced, and not often well publicised. To get best value you need to be prepared to regularly migrate your services between different instance types, classes or families. The cloud provider will not do this for you, so you will need the skills to do it yourself or contract a third party to do for you.

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