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Cost Optimization

Cloud cost revelations of 2014

By Leah Weitz on December 4, 2014

From groundbreaking new products to explosive adoption rates, it’s been a spectacular year for the cloud. And as cloud technology continues to gather more attention from consumers, media, and competitors, it’s more important than ever that everyone who would use this technology have access to the education and strategies they need for doing so with power and precision.

That’s why we spent 2014 bringing strategy to the forefront. It was a year of observation, investigation, and math—a ton of math—all aimed at unlocking the nuances of the practice and the industry.

Here are some of our favorite findings.

When it comes to Reserved Instances, purchasing frequency matters

Who knew that when you buy Reserved Instances could impact your bill as much as how many you have? When we compared the impact of purchasing frequency on yearly savings rate for companies using Reserved Instances, we found that monthly purchasers are poised to save more than double those who make their purchases annually (and you bet it’s still true for the new RI model). So if you haven’t updated your RI portfolio recently… now’s the time!

Spontaneous infrastructure changes can cost you

When AWS announces a new instance type, it can be tempting to jump aboard. However, when we investigated the implications of such a move, we found that the potential loss in Reserved Instance savings was no small matter. From now on, we’ll be determining the value of such an infrastructure change using our handy formula.

There’s a difference between waste and growth

As it turns out, a big cloud bill doesn’t necessarily indicate waste. While working with some of the cloud’s biggest spenders, we discovered that a far more accurate measure of cloud spending efficiency is not the bill, but the unit cost: how many cloud dollars it takes to produce a deliverable. It doesn’t matter if the bill is rising so long as your unit cost shrinks—because you’ll more than make up for it in return.

Cost optimization is an ongoing process

The more time we spend working with our biggest customers, the more it’s become abundantly clear: achieving a truly cost-optimized infrastructure requires multiple steps and a dedicated, ongoing effort. But what it doesn’t require is guesswork. Our Five Stages of AWS Cost Efficiency walk through every step that the most efficient cloud users take for ensuring intelligent spending on an ongoing basis.

On to 2015

We’ve been thrilled to contribute to the ongoing conversations about this technology, and to provide the tools that businesses need to monitor, manage, and optimize their costs with ease. Want to try them yourself? Sign up for a free 14-day trial of Cloudability Pro today.

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