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5 Ways Your Business Can Optimise Its Cloud Spending In 2023
Contributed by Aaqib Gadit, CRO of DigitalOcean
As a new financial year approaches, many businesses will be reviewing their past spending and looking to optimize costs in 2023/24. So how can SMBs optimize their cloud spending without reducing the quality of the service they’re getting?
As the Financial Times highlights, increasingly cost-conscious businesses are looking for ways to save on their cloud-related costs, which led to slower-than-expected cloud growth in the final quarter of 2022.
Furthermore, Virtana reports that, “Approximately 82% of organizations say that implementing cloud systems turned out to be more expensive than initially thought. They indicated their public cloud spend was over budget by an average of 13%.”
In 2023, several businesses will be hit in the pocket by rising energy costs, skyrocketing inflation rates, and continued supply chain challenges. It’s inevitable, then, that SMBs particularly — whose budgets must be managed with precision — will be looking for ways to bring down costs, and the perception that cloud implementation is more expensive than expected means it will naturally be an area of concern — but should this really be the case?
Are businesses simply spending on excessive cloud services for their unique needs? If so, could their cloud spending be optimized in 2023 to improve ROI and address ballooning budgets?
The bottom line here is yes, there are ways for SMBs to optimize their cloud spending and streamline expenditure going into a new financial year. Cloudways, a DigitalOcean company, is a customizable and affordable cloud hosting solution for SMBs, and here they offer their top tips for cloud spending optimization in 2023/24.
Ensure you only pay for resources you use
One of the simplest ways to eliminate unnecessary cloud spending is to ensure you’re only paying for resources you’re actually using. In a public cloud infrastructure, you can continually review and refine how you consume resources to ensure you’re using them as efficiently as possible — in short, you should only be using what you need, and paying for what you use. Any processes that are inessential, underutilized, or inactive altogether should be downgraded or discharged.
One of the advantages of cloud hosting is that you’re charged solely on a pay-as-you-use basis using a post-billing method. It means monthly costs can be variable — you may pay more during periods of heavy website traffic when you need to scale resources to match demand, for instance — but you won’t be charged up-front for more bandwidth than you actually need, resulting in a more efficient and cost-effective use of resources.
Opt for scalable cloud solutions
Scalability in cloud computing refers to the ability to add (or scale back on) hardware resources in order to meet shifting demands. When it comes to cost-effectiveness, scalability is imperative because it means you can tailor your cloud requirements to the growth rate of your business as you grow — avoiding significant capital expenditure that would otherwise be spent on system upgrades and maintenance, and ensuring you’re not hit with unexpected costs due to exceeding your bandwidth limits.
Using a scalable cloud hosting provider means you can — literally — scale your server’s hardware resources vertically at the click of a button, adding CPU, memory, and storage on demand. This mitigates the risk of server unavailability or loss of performance (even during surges in traffic) and puts you in control of your bills because you can scale up and back down again if you’re oversubscribed.
Consider a multi-cloud approach
A multi-cloud infrastructure involves the use of two or more public cloud services from different cloud vendors: for example, an organization might employ Google Cloud for data storage, AWS for software development, and so on. How does this help to optimize your cloud spending? Well, a multi-cloud strategy means rather than being ‘locked in’ to one cloud vendor or platform, you can take a mix-and-match approach, deploying certain workloads through one cloud platform, and others through another.
This approach has several advantages — increased operational efficiency, added flexibility, and improved business continuity planning (since you’re not reliant on a single solution, but several) — while you can also streamline your spending by deploying the most cost-effective cloud solution for each component of your infrastructure: with Cloudways, for example, you can launch multiple servers across a number of different cloud hosting plans and infrastructure providers to ensure you get the best value.
Avoid ‘bill shock’ by monitoring and forecasting
Naturally, you can more efficiently manage your spending when you’re able to accurately forecast your monthly incomings and outgoings. Now admittedly, that can be difficult when your cloud resources are billed based on usage so it’s important to monitor this closely so your monthly bill doesn’t come as a shock and you can spot any seasonal trends.
By analyzing your monthly spending, you can pinpoint areas you may be perpetually overspending, and also recognize spending patterns to help you better forecast future expenditure.
You should also take into account the periods during the year when you’re likely to spend more on cloud services — for example, eCommerce businesses might anticipate a surge in demand during November and December, while SaaS providers may expect to use more resources at the start of a new fiscal year as businesses review their budgets and evaluate their software needs.
Use a managed cloud hosting provider
When it comes to cloud hosting specifically, there are several benefits to using a managed SMB hosting provider such as Cloudways: for example, its powerful SSD-based hosting ensures optimal site speed and performance, while dedicated firewalls and automated backups provide robust protection. However, there are also a number of ways a managed hosting provider can help you to optimize your spending.
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Managed payments: The vast majority of providers operate a pay-per-use model, which means there are no unexpected charges — you only pay for what you use.
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Expert support: 24/7/365 live support from cloud engineers will reduce your reliance on in-house expertise, meaning you can save on salary costs or expensive consultancy fees.
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Worry-free maintenance: You also surrender all maintenance responsibility to your provider, so there are no ongoing costs for maintaining or upgrading hardware and software.
Aaqib Gadit, CRO of DigitalOcean and Cloudways founder comments:
“While we’ve seen an acceleration in cloud adoption in the past five years, there’s a misconception that cloud adoption is prohibitively expensive for SMBs. It’s time to change this misconception. A re-evaluation of efficiency usage and the packages you’re subscribed to will optimise your cloud spending budgets while ensuring quality hosting is achieved.
“At Cloudways, we’re committed to offering cost-effective cloud hosting solutions to SMBs and agencies. That means you’ll only ever pay for resources that you actually use, you can scale your servers on-demand without incurring unexpected costs or causing operational disruption, and you can choose from a number of cloud hosting plans and infrastructure providers to increase efficiency and ensure value for money. As a managed hosting provider, we also take away the hassle — and the cost — of server maintenance, so you can be sure of optimal performance without the need for in-house expertise.”
