How to Manage Cloud Computing Spending in 2024

Cloud computing is the foundation of modern information technology infrastructure. The use of cloud computing in businesses has grown exponentially, due to the limitless implementations which enhance efficiency, scalability, and flexibility. Increased cloud usage comes at a cost which can quickly become expensive and challenging to manage.

The latest forecast from Gartner, Inc. states that global end-user spending on public cloud services is anticipated to grow 20.4%, totaling $678.8 billion in 2024. This number is up from $563.6 billion in 2023. Sid Nag, Vice President Analyst at Gartner, remarked, "Cloud has become essentially indispensable." The expected bump in cloud usage exemplifies businesses need to gain a strategic foothold on their cloud management in order to maximize benefit and minimize costs.

In this blog, we touch on effective strategies to manage costs associated with your cloud computing, while ensuring the protection of your financial investment in cloud computing.

Understand Your Cloud Usage 

An audit of your current cloud environment is a necessary first step. Identify the services that are in use and the corresponding costs associated with those services. Usage patterns give insight into the expected necessary spend on cloud services. Many businesses pay for services that they are underutilizing or do not need at all. For this reason, it is important to regularly assess your environment to know if it is beneficial to downsize underutilized services. Auto-scaling is a powerful implementation that can dynamically modify resource usage based on demand. Do not pay for idle capacity.

Price Modeling Options

There are a number of pricing models that cloud service providers deploy, including pay-as-you-go, reserved instances, and spot pricing. Careful selection of the correct model for your business needs can drastically reduce cost. Reserved instances may be the ideal fit for predictable workloads. However, spot instances should be considered for sporadic or non-critical workloads.

Cost Allocation Tags 

Monitor departmental, project and application spending by implementing cost allocation tags . Tracking this identifies the parts of your business that are driving up costs along with the added benefit of accurate billing and budgeting. Tags enable you to allocate costs appropriately and make informed decisions about where to cut back. 

Budgets and Alerts Usage

Configure cloud spending alerts based on budgets so as not to exceed predetermined expenses. Doing this prevents overspending and gives you the power of financial control.

Strategically Review and Adjust Cloud Strategy

Cloud needs change. Regularly review and adjust your cloud strategy to align with your current business needs. This includes not just scaling resources up or down but also exploring new cloud services or features that may offer more cost-efficient alternatives. 

Invest in Cloud Management Tools 

Cloud management tools are useful in proving a detailed perspective of spending patterns on cloud usage. Cloud tools help the decision-making process by using automation to identify cost-saving opportunities through accurate analytics.

Foster a Group Mentality Around Cost Awareness 

Encourage a culture of awareness around the cost implications of cloud usage. Provide team member training and resources that educate them on the impact of their cloud usage actions and encourage practices that promote cost-efficiency.

The ongoing process of managing cloud computing spending requires a strategic approach. Every dollar saved on cloud spending is a dollar that can be invested back into your business.

Explore all that iuvo can do to help your organization manage cloud spending. Contact us today to begin your journey towards a more flexible, controlled, and efficient cloud environment. 