A Practical Framework for Optimizing Costs in Multi-cloud Environments

Managing cloud costs has consistently maintained the top spot among cloud challenges for the third year in a row. Budget overruns and the ever-elusive promise of cloud cost savings weigh heavily on the minds of 84% of cloud users and decision-makers. That’s why, throughout the month of March, we shared insights and strategies from our cloud experts to help you tame your cloud environments and, in turn, your cloud bills.

The Cloud Cost Wild West: Why Cost Optimization Matters

“When you focus on maximizing cloud utilization, embracing efficiency, and realizing the true value of cloud investments instead of basic cost-cutting, meaningful cost savings should follow organically, without compromising performance or innovation.”

The very first takeaway from our series should be that cloud cost optimization is not the same as cost reduction. In fact, cost reduction is a natural byproduct of cloud optimization. When you focus on maximizing cloud utilization, embracing efficiency, and realizing the true value of cloud investments instead of basic cost-cutting, meaningful cost savings should follow organically, without compromising performance or innovation.

Optimizing cloud usage means getting rid of key inefficiencies:

• Over-Provisioned Resources: CPU, memory, and storage allocated beyond actual needs.
• Zombie Resources: Unused instances, orphaned disks, and inactive load balancers.
• Lack of Cost Visibility: Inconsistent tracking of expenses, especially across multi-cloud platforms.
• Inefficient Cost Avoidance: Missing out on Reserved Instances (RIs), Savings Plans, Spot Instances, and proper license management.

Essentially, it’s not just about provisioning fewer resources, but strategically maximizing what you already have before committing to more. That’s easier said than done, because if you don’t provision enough resources, you risk performance downgrades and downtime. So, how do you practically achieve that perfect balance between over- and under-provisioning?

“The very foundation of these pillars is a Cloud Management Platform that can enable end-to-end visibility and deep cost intelligence across all cloud platforms…”

We discuss three strategic pillars of cost optimization and value realization –  visibility & cost transparency, optimization & cost efficiency, and governance & FinOps culture – in the first installment of our cost optimization series:

The very foundation of these pillars is a Cloud Management Platform, like emma, that can enable end-to-end visibility and deep cost intelligence across all cloud platforms and allow organizations to switch from reactive cost-cutting to proactive, data-driven decisions for maximizing cloud usage and enhancing operational efficiency to achieve more from less.

The Fundamentals of Cloud Cost Optimization

Estimates are that $44.5 billion will be wasted on underutilized resources this year. That’s 21% of the total cloud spend. The question is how NOT to waste a third of your cloud spend.

The answer lies in the second part of our cost optimization series, where we discuss the core strategies for cloud cost optimization. You can dive into our exhaustive list here, but here’s an overview of what you should be looking at:

• Visibility & Cost Transparency: You can’t fix what you can’t see. Having a full view of your cloud spend and real-time resource consumption is the first step toward meaningful optimization.
• Resource Efficiency: Analyze usage trends to allocate exactly what you need in terms of compute and storage.
• Mixed Instance Types: Use a strategic mix of on-demand, reserved, and spot instances, depending on your workload requirements.
• Workload Placement & Optimization: Find and run your workloads in the most cost-effective cloud regions.
• Automation & Governance: Enforce cost policies and budget thresholds for teams and projects through automation.
• FinOps Best Practices: Implement department accountability, showback, or chargeback models for establishing cross-team accountability for efficiency.

A cloud management platform is fundamental to executing these strategies effectively, and here’s how emma enables smarter cloud cost optimizations:

• A Unified Multi-Cloud View: Provides a single pane of glass for tracking spend and viewing real-time pricing and cost comparisons across clouds and cloud regions.
• Predictive Cost Analytics: Uses AI to forecast future cloud expenses based on usage trends.
• Automated Rightsizing: Suggests rightsizing recommendations based on usage trends and predictive analytics.
• Blended Pricing Insights: Provides real-time pricing for various instance types, which helps configure the optimal blend of different discount categories and instance families.
• Budget & Quota Enforcement: Keep track of when you are about to hit or exceed  predefined budgets, with restrictions enforced when the budget is  exceeded.

For more strategies and actionable recommendations read our full article:

Addressing Cloud Cost Challenges in Multi-Cloud Environments

CSPs expanding their service portfolios means more complex cloud pricing. Throw multiple cloud providers into the mix, and your cloud bill can become a maze of unexpected and unpredictable expenses. For 86% of organizations, multi-cloud expenses are simply unavoidable. They must deal with cloud cost management challenges, like:

• Complex Pricing Models & Billing Differences: All CSPs have different pricing models (on-demand, RIs, Spot, committed-use), and managing these manually or through fragmented tools is time-consuming and error-prone.
• Data Transfer Costs & Hidden Fees: Data egress between clouds and across regions is super expensive. Cloud interconnect services can help reduce high internet egress costs, but even that’s not enough without constant monitoring and optimization.
• Lack of Standardized Governance: Teams may use different cloud cost tracking mechanisms for different cloud environments, which can lead to visibility gaps and inconsistencies.

emma's cost optimization features are great for single-cloud environments, but absolutely essential for multi-cloud.

• Cross-Cloud Cost Aggregation: emma aggregates costs from cloud providers such as AWS, Azure, and GCP into a single report with unified tagging.
• Automated Cost Controls: It identifies idle and underutilized resources and recommends downsizing or termination across all environments.
• Multi-Cloud Data Transfer Optimization: Minimizes egress costs by intelligently routing traffic through cost-effective private interconnect routes with emma's own multi-cloud networking backbone.

This is just the tip of the iceberg. Our third blog in the series dives deep into how you can use emma to maximize your cloud investments. Read more:

Build a Cloud Cost Optimization Roadmap for Your Organization

You need a strategic framework to successfully implement everything we have discussed above. Here’s how you can go about it:

Phase 1: Assessment & Baseline Analysis

The objective of this phase is to gain full visibility into your current cloud costs and identify inefficiencies.

• Conduct a cloud cost audit across all cloud environments.
• Establish spending benchmarks by department, workload, and project.
• Implement cost allocation tagging for better tracking.
• Identify underutilized resources using insights from emma.

Phase 2: Implementing Smart Cost Controls

The goal is to enforce proactive cost management strategies.

• Set up automated alerts for unexpected cost spikes.
• Leverage spot instances, reserved instances, and savings plans for cost efficiency. Use pricing insights from emma.
• Enable auto-scaling to adjust resources based on real-time demand.
• Apply rightsizing policies to eliminate overprovisioning. emma’s AI-powered recommendations come in handy for this.
• Optimize multi-cloud workload placement by comparing pricing across providers.

Take notes from our quick-fix guide for reducing costs in AWS. The recommendations may be for AWS in particular, but you can extend them to virtually any cloud environment. Also stay tuned for similar compilations for all major CSPs (Cloud Service Providers).

Phase 3: Continuous Monitoring & FinOps Adoption

The aim of this phase is to establish a culture of ongoing cloud cost efficiency.

• Establish a FinOps team to manage ongoing optimizations.
• Conduct regular cost reviews and audits to identify new optimization opportunities.
• Foster cross-team collaboration between finance, engineering, and operations to ensure optimization measures align with business objectives.
• Use emma’s AI-driven forecasting to predict future spending.

Future Trends in Cloud Cost Optimization

Future trends in cloud cost optimization are influenced heavily by AI, automation and a broad realization among CSPs that they must facilitate cost reduction and optimization to maintain their relevance and competitiveness. Here are key trends that you need to watch out for and proactively embrace for maintaining optimal cloud costs now and in the future.

• AI-Driven Rightsizing and Cost Management: AI algorithms can help predict cloud usage and automate resource adjustments. For instance, AI-powered tools, like the emma platform, provide automated rightsizing recommendations for adjusting instance types and compute. Such insights will soon become an imperative for all cloud users.
• Real-time Anomaly Detection: Continuous monitoring coupled with Machine Learning (ML) capabilities can help detect spending spikes and anomalies as soon as they occur, allowing users to stay aware and take action before they become major issues.
• Automated Workload Placement: Next-generation, AI-powered cost optimization tools will go beyond recommendations to automate strategies like shifting to cost-efficient instance types and placing workloads in optimal cloud regions. Another feature to look out for is intelligent spot instance migrations to avoid downtime and interruptions.  
• Serverless and Elastic Compute: Cloud providers are acknowledging the shift towards serverless and on-demand elastic models that allow users to pay-per-use and reduce idle resource costs.
• Smart Multi-cloud Orchestration: With growing adoption of hybrid and multi-cloud architectures, organizations will need smart and seamless multi-cloud orchestration capabilities to fully leverage the flexibility and cost-saving potential of such deployments. Fortunately, the emma platform already supports multi-cloud workload orchestration across serverless and Kubernetes environments.
• Intelligent Intercloud Data Transfer Optimization: A major catch with multi-cloud orchestration is the associated intercloud data transfer costs. emma’s networking backbone and intelligent routing capabilities optimize egress costs across different clouds and regions. These capabilities will become essential as more organizations turn to optimizing their multi-cloud environments.

With all the quick-fixes and long-term strategies you now have in your arsenal, take the next step, and get in touch with our cloud architects or request a customized demo today!