What Is a Cloud Cost Optimizer and How Can It Save You Money?

Cloud technology has brought many advantages to companies that rely on web-based solutions to provide services to customers and clients. But with the apparent benefits of using the cloud come some challenges. For every enterprise, the ultimate goal is to maximize profit while reducing overhead costs.

Cloud cost optimization is the solution to improving profits while reducing the cost of cloud services. Companies continue to build in the cloud, and these operations generate costs. Cloud providers work to offer flexibility and scalability. But clouds are not very transparent and easy to track. This is why a cloud-based company needs a cloud cost optimizer.

What Is a Cloud Cost Optimizer and How Can It Save You Money?

Cloud cost optimization and cloud cost management are strategies used by cloud-based companies. They are used to track the costs of cloud utilities. These strategies are similar. But they are still different on a more intricate level.

Here are brief definitions of these strategies:

Cloud Cost Management

Cloud cost management involves the monitoring, measuring, and controlling of cloud spending on cloud providers. It is sometimes called “cloud computing.” The goal of these operations is to optimize costs and reduce spending. Also, there is the matter of maximizing cloud investments.

Initially, cloud cost management centered on reducing waste. That involves removing under-used or forgotten resources. It also focused on improving purchasing choices. But now, cloud cost management is more focused on optimizing architecture.

The top three cloud services are AWS, Google Cloud (GCP), and Microsoft Azure. These have different systems for cloud cost management.

Cloud Cost Optimization

Cloud cost optimization is a solution that combines tools, strategies, techniques, and best practices to optimize cloud costs. Optimizing costs is all about getting the best results for cloud investments. The goal is to maximize profits, not necessarily reduce costs. Sometimes, to realize more profit, you need more investment.

Cloud cost optimization focuses on cloud cost efficiency. It reduces extraneous resources and utilizes discounts. Also, it reserves higher capacity by rightsizing computing resources. These operations help with aligning costs with business goals.

There are limited cost optimization strategies with AWS, GCP, and Azure cloud hosting.

Thus, a need for cloud cost optimizers arises. Ensuring costs occur where they need to is optimizing costs.

“Cloud cost optimization is a solution that combines tools, strategies, techniques, and best practices to optimize cloud costs”

What Is a Cloud Cost Optimizer?

A cloud cost optimizer is a tool or platform that assists in cloud cost optimization. It works to identify areas of mismanaged resources and provides information about discounts. Its primary goal is to help maximize profits for a cloud-based company.

There are different cloud cost optimization tools for AWS, GCP, and Azure. These cloud cost optimizers have varying effectiveness. Also, a Google cost optimization tool will be unfamiliar to users of AWS.

But now, private firms provide cloud cost optimizers that can work on any cloud provider.

In most cases, tools used in cloud cost management also function as cloud cost optimizers. For example, an Azure cost management tool can also be a cloud cost optimizer.

How Does a Cloud Cost Optimizer Work?

First, a cloud cost optimizer ingests data. It can receive and retrieve data from multiple sources. Then it analyzes data and generates reports.

A cloud cost optimizer enhances cost optimization by taking action on cloud dynamics. First, a cloud optimizer can view specific sections of a company’s cloud activity. Then it analyzes what the company and its customers use on the cloud.

A cloud cost optimizer alerts the company on what cloud operations to engage or disengage. It provides information that shows who, what, and why your costs are changing.

Cloud cost optimizers provide information in an easy-to-understand way. Their goal is to show companies where they are wasting money and where they should be spending it. This allows companies to enhance their profit margins.

Cloud providers offer native cloud cost optimizers for their operations. For example, Google’s cost optimization tools are accessed through Cloud Console. The Cloud Console features two main pages dealing with costs.

How Does a Cloud Cost Optimizer Work?

AWS cost optimization is pretty much the same as AWS cost management. AWS native tools like AWS Cost Explorer are suitable for small companies. Companies with straightforward cloud operations and billing can use native tools without problems.

However, larger companies with complex cloud operations can lose money with native tools. So, getting more comprehensive expert cloud cost optimizers is essential.

Improved cloud cost optimizers are provided by companies like CloudZero, Cloudability, Turbonomic, etc.

Areas Where a Cloud Cost Optimizer Is Used

Businesses use cloud cost optimizer for a variety of operations. Cloud computing has a wide range of applications – each with its own cost. So, cloud cost optimizers take several actions to reduce costs and increase profit.

Here are a few areas where cloud cost optimizers are used:

  1. Cloud Cost Optimizer Monitors Accounts

Cloud cost optimizers monitor traffic on cloud accounts. They provide information about every member of a cloud account. So, the activity of each member can be reviewed and tracked.

It is advisable to use only one account to manage all members. Tracking cloud costs on separate accounts can get tedious in the future.

  1. Cloud Cost Optimizer Aligns Costs with Goals

Cloud cost optimizers allow businesses to align spending with their goals. With every new project, there is a cost. Optimizing this cost to produce the desired result is a necessity.

Cloud cost optimizers ensure that resources are spent where they need to be. Doing this enables businesses to achieve their goals in good time.

  1. Cloud Cost Optimizer Put Cost First

Cloud cost optimizers deal with every cloud operation in terms of cost. They calculate unit costs, idle costs, and cost ratios. These functions equip companies with the information needed for making future decisions.

  1. Cloud Cost Optimizer Helps Get the Right Data to the Right People at the Right Time

More data traffic leads to more cost. Cloud cost optimizers cut down on excessive data. So, cloud cost optimizers ensure that only what is needed gets to customers.

Cloud cost optimizers help slice and dice data. This allows engineers to determine cleaner, less bulky paths to use.

How Can a Cloud Cost Optimizer Save Money?

The main aim of cloud cost optimizers is to reduce costs and maximize profit. If this is done correctly, a cloud cost optimizer will not only save a company. It will also increase revenue.

Here are a few ways a cloud cost optimizer saves money:

  1. Cloud Cost Optimizer Reduces Costs

Cloud cost optimizers reduce cloud spending by optimizing cloud operations. For example, they cut down on data used by exposing redundancies.

  1. Cloud Cost Optimizer Enhance Profits

The best way to save money is to make more money. A cloud cost optimizer increases businesses’ profit margins. It does this by assigning resources to profitable operations. It also stops the flow of investment to unprofitable operations.

  1. Cloud Cost Optimizer Boosts Visibility

A good cloud cost optimizer increases visibility. This means it allows you to identify active and idle resources. A cloud cost optimizer also monitors and organizes cloud spending. What is organized can then be used efficiently.

Bottom Line

There are several more ways a cloud cost optimizer can save money. But these points listed are vital. Also, there are more areas where a cloud cost optimizer can be applied. Cloud cost optimization ensures companies make more money than they spend.

Francis Nwokike

Francis Nwokike is a Social Entrepreneur and an experienced Disaster Manager. I love discussing new business trends and marketing tips. I share ideas and tips that will help you grow your business.

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