Six Ways to Cut Your Multi-cloud Costs

It's no secret that multi-cloud costs are climbing steadily upward. What's less well-known is that expenses can be effectively trimmed simply by adopting a handful of smart tactics.

Effective multi-cloud cost management should balance savings with maintaining and improving service levels, as well as business development opportunities, advises Nigel Gibbons, director and senior advisor at business and technology advisory firm NCC Group. "It requires thorough analysis and strategic planning to ensure that essential resources aren't under-provisioned, critical services aren't compromised in the pursuit of lower expenses, and that cost increases may be justified," he observes in an email interview.

Six Tips for Cutting Multi-cloud Costs

Are you ready to begin shrinking your multi-cloud budget without sacrificing performance or reliability? Then, consider the following six safe and effective ways of trimming multi-cloud costs.

Tip 1. Do your homework

Gibbons suggests analyzing your current and projected usage to understand your organization's provider leverage. "Engage directly with the account manager to discuss options such as volume discounts, longer-term commitments, or reserved instances that offer reduced rates," he advises. "Highlight your potential for increased future spending or a strategic partnership to incentivize better pricing." Gibbons also recommends obtaining competitive offers from other providers to use as leverage in negotiations.

Explore enterprise agreements that bundle services for additional savings, Gibbons says. "Be informed about all available discounts, credits, and promotional programs," he recommends. "By coming prepared with data and a clear understanding of your needs, you'll strengthen your negotiating position."

Tip 2. Don't hesitate to negotiate costs

The most effective way to negotiate costs is by ensuring that baselines are realistic and that optimized growth projections are established upfront, reflecting actual needs, says Anay Nawathe, a director with global technology research and advisory firm ISG. "Enterprises should push back against overly extended contract durations and avoid being lured into accepting shiny concessions that aren't aligned with their long-term goals and risk tolerance," he explains via email. "Additionally, organizations should be open to creative solutions, such as co-marketing ventures or strategic partnerships that can lead to more favorable terms."

Tip 3. Take advantage of cost-tracking tools

To slash expenses, use tools that track expenses, and then intelligently suggest ways to optimize cost by right-sizing instances, advises Raj Yavatkar, CTO at Juniper Networks. "For example, choosing the best place—cloud, region, or multiple regions—to locate data, tracking network traffic, and localizing interactions among apps to avoid costly egress traffic," he says in an online interview. "New AI tools can also help with techniques such as predictive analytics and network assurance to ensure application service level experience and cost optimization."

Tip 4: Consider implementing cloud governance frameworks to establish clear policies and procedures for cloud usage

The cloud delivers a digital edge to competitiveness, which requires a cultural shift in attitudes from the boardroom on down. "This includes defining roles and responsibilities, setting up approval processes for resource provisioning, and enforcing compliance standards," Gibbons says. "Investing in cross-training teams on multi-cloud environments can also lead to more efficient resource management and innovation."

AI-enabled learning and analytics tools can provide deeper insights into usage patterns and cost drivers, allowing more precise optimization efforts. "It's also beneficial to build strong relationships with cloud provider support teams, as they can offer tailored advice and early access to new features or discounts," Gibbons says. Finally, plan for scalability and future growth to ensure that cost optimization strategies remain effective as needs evolve. "By adopting a proactive and holistic approach, enterprises can maximize the benefits of a multi-cloud strategy while keeping expenditures in check."

Tip 5. Automate resource management

Managing multi-cloud resource allocation can be overwhelming, says Nikhil Roychowdhury, principal and cloud FinOps leader at Deloitte Consulting. "Therefore, organizations should consider automating resource management to dynamically monitor usage and apply cost-saving policies, maximizing cloud service efficiency without the need for manual intervention," he explains in an email interview. Roychowdhury also recommends adopting an automated approach to cloud resource management, optimizing utilization by right-sizing, and shutting down idle or underutilized resources.

Tip 6. Consider taking a three-step approach to cost-optimization

Taking three distinct steps will help keep costs under control, says Kyle Fox, CTO at aerospace, defense, and government services integrator SOSi.

First, if feasible, move cost outliers to on-premises. "These outliers typically include predictable workloads that are data-intensive, GPU-heavy, or have high utilization," Fox notes via email.

Second, rearchitect dynamic workloads using cost optimization techniques. This approach includes incorporating spot/reserved instances, leveraging autoscaling, reducing storage requirements and tiers to prevent paying for unused space, avoiding egress costs by optimizing data strategy, and selecting optimal services across each cloud provider and their respective regions.

Third, continuous cost optimization should be implemented by forming a cross-functional team spanning finance, engineering, and ops. Then, collaboratively improve IT operational expenditures, establish a data-driven approach, and pay attention to evolving discount programs.

A Final Word on Cutting Multi-cloud Costs

Optimizing costs across multi-cloud environments isn't simple, Fox says. "It's best to start by operating within a single CSP and gradually add complexity over time."