How To Reduce Hidden Cloud Costs

The increasing prevalence of the hybrid work culture has undeniably made cloud storage an essential requirement, as numerous organizations have widely embraced it. However, this rapid adoption has brought forth certain obstacles, most notably the significant rise in expenses related to cloud services, which should be considered.

Elements like storage, data transfer, and more play crucial roles in determining the overall cost of using cloud services. For organizations aiming to reduce the financial impact of relying on cloud infrastructure, it becomes essential to optimize these aspects strategically.

This blog aims to offer organizations an all-inclusive collection of strategies to traverse the complex landscape of cloud expenses effectively.

Cloud Adoption & It’s Benefits

Cloud storage, managed by third-party providers, securely stores data on offsite servers. This remote storage solution allows users to effortlessly upload, store, and access data using an internet connection, delivering convenience and flexibility to both individuals and businesses.

In essence, envision cloud storage as accessing storage resources over the internet, much like how you tap into electricity from a power grid. Instead of owning and maintaining physical servers and equipment, you can rent and utilize storage from a remote location, often referred to as "the cloud."

Over recent years, the adoption of cloud services has surged significantly. O'Reilly's Cloud Adoption Report indicates that over 90% of organizations have embraced the cloud. This upward trend can be credited to its many benefits, including:

• Scalability: It allows businesses to easily adjust their storage capacity based on evolving needs, eliminating the necessity for substantial initial hardware investments.
• Cost Efficiency: Operating on a pay-as-you-go model, cloud storage ensures organizations pay only for what they use, reducing upfront capital expenditures. This flexibility is particularly beneficial for small to medium-sized businesses.
• Accessibility Anywhere, Anytime Data Access: Users can access their data from anywhere with an internet connection. This fosters collaboration among remote teams, enhances remote work capabilities, and enables seamless access to files and resources.
• Data Redundancy and Durability: Cloud storage providers implement redundant data storage systems across various servers and locations, ensuring data durability and safeguarding against hardware failures. This redundancy ensures data remains accessible even in the case of server or data center issues.
• Automated Backups and Disaster Recovery: Cloud storage services often include automated backup features, simplifying backup strategies. Additionally, cloud storage facilitates efficient disaster recovery solutions.
• Collaboration and File Sharing: Real-time document sharing and editing capabilities in cloud storage simplify collaboration among team members, boosting productivity and optimizing workflows.
• Security Measures: Cloud storage providers incorporate robust security measures, including data encryption during transfer and at rest. Regular security updates, access controls, and authentication mechanisms ensure data security and user information protection.

Certainly, as organizations increasingly adopt cloud services, managing cloud spend becomes a critical challenge. Report from Flexera underline the prevalent struggles: 82% of organizations require assistance in managing cloud expenses, with 32% of the cloud budget deemed wasteful. Moreover, CloudZero highlighted that 7 out of 10 organizations lack clarity on their cloud expenditure. These figures underscore the crucial need for accurate cost distribution in cloud usage due to the numerous hidden costs associated with cloud services.

Managing cloud costs, also known as cloud optimization, involves overseeing and maximizing cloud resource usage to meet business objectives effectively. This comprehensive approach spans the entire lifecycle of cloud infrastructure, encompassing resource provisioning, vigilant monitoring, adaptable scaling, and continual optimization. The ultimate goal is to ensure optimal performance while maintaining cost efficiency by aligning cloud resource utilization with specific organizational needs and financial constraints.

Mentioned below are some common reasons highlighting the significance of effective cost management:

• Achieve cost reduction: Cloud costs can spiral out of control without careful oversight, resulting in a financial burden. Emphasizing the importance of optimizing cloud costs helps eliminate wasteful spending, freeing up funds for crucial business areas like product development and recruitment.
• Improve resource utilization: Ensuring appropriately sized resources is key to effective cloud cost optimization. This helps prevent over-provisioning and unnecessary payments for underutilized capacity. Adopting this approach only pays for what you truly need, precisely when you need it.
• Gain budget management and predictability: A well-designed cloud budget provides predictability. You can accurately forecast your cloud expenses by implementing effective cost-control measures, avoiding unexpected financial challenges, and enabling strategic and informed planning.

Components of Cloud Cost 

Now that we know the importance of effective cost management strategies, let us look at the significant components of the overall cloud bill.

Compute Costs

Compute costs are directly related to utilizing computing resources in the cloud, encompassing virtual machines (VMs), containers, and serverless computing platforms. The expenses are determined by the processing power (CPU), memory, and other resources necessary for executing a particular workload.

Factors that influence compute costs include

• Instance Type: Each VM or container instance type comes with its own cost, depending on its computational capabilities.
• Running Time: The longer compute resources are provisioned and active, the higher the costs incurred.
• Reserved Instances vs. On-Demand Instances: Cloud providers commonly offer cost-saving opportunities for customers who commit to reserved instances instead of utilizing on-demand usage.

Storage Costs

The expenses related to storing data in the cloud are called storage costs. These costs are influenced by various factors, including the type of storage utilized, such as object storage (e.g., Amazon S3), block storage (e.g., Amazon EBS), or file storage (e.g., Amazon EFS), as well as aspects like storage capacity and data access patterns.

Several factors contribute to the variation in storage costs:

• Storage Class: Different storage classes, namely standard, infrequent access, or archival, may have distinct cost structures. The chosen class determines the pricing for storage.
• Data Replication: Costs can differ based on whether data is stored with redundancy or replication for enhanced durability. Opting for higher levels of replication may result in increased expenses.
• Data Transfer to and from Storage: Costs may be associated with transferring or retrieving data from storage. These expenses are influenced by the volume of data being transferred.

I/O and Network Costs

I/O (Input/Output) and network expenses refer to the costs of transferring data to and from the cloud. These expenses encompass data transfer between regions, availability zones, or external networks.

Certain factors influence these costs:

• Data Transfer Volume: The costs associated with data transfer in and out of the cloud tend to increase with the data transfer volume.
• Data Transfer Across Regions or Availability Zones: Transferring data across different regions or availability zones may result in higher costs.
• API Calls: Costs can be linked to the number of API calls to access or manage data within the cloud.

Understanding Hidden Cloud Costs

Organizations are charged based on the volume of data stored, meaning the higher the data volume, the higher the cloud bill. As businesses generate and accumulate more data, the cloud bill escalates accordingly. However, beyond these obvious costs lie unexpected expenses, referred to as hidden costs, associated with cloud storage.

Hidden costs in cloud storage extend beyond the evident charges linked to utilizing these services. These expenses might not be immediately apparent, underscoring the importance for businesses to thoroughly assess their usage patterns and the terms outlined in their cloud service agreements.

The impact of storage costs on the overall cloud bill was further highlighted in a study by Virtana titled “The State of Hybrid Cloud Storage.” Based on interviews with 350 cloud computing decision-makers, the report revealed significant insights into the implications of storage expenses.

The survey findings revealed a staggering 94% acknowledgment of increased storage costs among participants, with 54% confirming faster growth in storage expenses compared to their overall cloud spending. This underscores the substantial impact of storage costs on organizations' financial health, emphasizing the need for strategic management in this area.

Several hidden costs in cloud storage were identified:

• Data Transfer Fees: Cloud providers impose charges for data ingress and egress. While uploading data is usually free, retrieving or transmitting data from the cloud may incur additional fees, impacting enterprises with high data transfer needs.
• Forgotten Instances: Unused cloud resources left active accumulate costs in compute, storage, and network usage, creating financial burdens over time. Regular infrastructure audits are crucial to identify and terminate such instances, minimizing unnecessary expenses.
• Overprovisioning: Assigning excessive resources to applications leads to paying for underutilized resources, increasing costs. Aligning resources with actual requirements mitigates this inefficiency.

A comprehensive storage audit for major market players showed storage expenses constituting 40% of their total cloud investment. Further investigation into Azure and AWS revealed intriguing insights. For Azure, only 35% of disk storage was utilized, indicating substantial overprovisioning of 65% of disk space.

Similarly, during our analysis within the Amazon Web Services (AWS) cost framework, an interesting finding emerged: 15% of the total cloud expenditure incurred by the company was attributed to the utilization of Elastic Block Store (EBS). Additionally, our observations indicated average disk utilization rate stood at 25%.

In our analysis of various scenarios, organizations experienced downtime at least once per quarter despite overprovisioning their resources to maintain application uptime. This situation resulted in cloud wastage, characterized by ineffective use or distribution of cloud storage resources, leading to avoidable expenses and underutilized storage capacity. Cloud wastage can take diverse forms, causing businesses relying on cloud storage services to incur unexpectedly high costs.

During comprehensive storage audits for prominent organizations, we identified common issues contributing to cloud wastage, including:

• Overutilized volumes: These volumes represent storage resources consistently operating at capacity or performance levels exceeding actual workload requirements. They indicate an allocation of storage surpassing the present demand, resulting in increased expenses for organizations paying for resources beyond necessary operational capacity.
• Idle volumes: This refers to allocated storage resources that remain unused or not accessed. These resources remain inactive despite provisioning, incurring costs without generating value through data-related tasks or processing. Idle volumes contribute to elevated cloud expenses without active utilization.
• Overprovisioned volume: This occurs when organizations overestimate future storage needs; overprovisioning leads to paying for unused storage capacity. This inefficiency drains financial resources as organizations pay for unutilized space.

So, as we can see, the prominent reason for storage-related costs, regardless of the cloud service provider you are using, is overprovisioning. But this tendency is understandable. 

Effectively managing storage requirements often requires the creation of a custom tool due to the limited range of features provided by Cloud Service Providers (CSPs). However, this tailored approach requires significantly increasing DevOps efforts and time investment. 

Conversely, relying solely on CSP-provided tools may lead to a suboptimal process that is highly manual and resource-intensive, rendering it impractical for daily, continuous use. 

As a result, a dilemma arises wherein over-provisioning becomes an acceptable compromise to ensure uninterrupted uptime of critical applications, considering the significant impact these complexities have on day-to-day business operations. 

However, overprovisioning incurs additional expenses when they have excess or insufficiently utilized storage capacity, resulting in increased costs. As per a report by StormForge, a significant portion of respondents said that 48% of their cloud spend is being wasted, with over-provisioning and cloud complexity being the leading causes. Additionally, financial resources that could have been directed towards essential business endeavors are invested in idle storage capacity, indicating a misuse of funds amounting to $17B annually.

• Underprovisioning: This occurs when organizations allocate insufficient resources for their applications, leading to poor performance, service interruptions, and the need for immediate scaling. Such scenarios often result in additional expenses due to adjustments made during peak demand, causing diminished user experiences and increased downtime.

• Underutilization: This involves the failure to fully exploit the capabilities of cloud services or resources. Organizations invest in advanced features or performance levels but do not configure or utilize them optimally. This underutilization results in missed opportunities to derive the maximum value from cloud services.

• Failure to implement lifecycle policies: Implementing data lifecycle policies is crucial, yet failure to establish and enforce such policies can have adverse effects. Neglecting to implement these policies results in accumulating outdated data, leading to increased storage costs.
• Suboptimal Practices in Data Storage: Storing all forms of data in high-performance storage classes, regardless of their access patterns or significance, leads to unnecessary expenses by utilizing premium storage classes for data that could be stored in more cost-effective alternatives.
• Neglecting Decommissioning of Unused Resources: Failing to decommission or delete storage resources that are no longer required, resulting in ongoing costs for resources that do not actively contribute to business operations.
• Inefficient Resource Sizing: Neglecting to adjust storage resource sizes based on actual usage patterns and requirements leads to allocating larger storage volumes than necessary and contributing to higher storage costs.
• Insufficient Monitoring and Optimization: Failure to regularly monitor and optimize storage configurations based on evolving business needs results in missed opportunities to identify and mitigate inefficiencies and continuous wastage.

Understanding and rectifying cloud wastage is paramount. While optimizing computing resources is vital for immediate application performance, neglecting storage efficiency is a common oversight. Often, organizations prioritize compute expenses due to their direct impact on application responsiveness, inadvertently overlooking the significant impact of storage optimization. Yet, delving into storage-related factors and optimizing cloud costs are equally crucial. This involves implementing strategies to monitor, analyze, and fine-tune cloud resources, ensuring cost-efficiency across the entire cloud infrastructure.

Proactively addressing hidden storage-related costs and optimizing storage resources can effectively alleviate the financial strain caused by inefficient cloud storage utilization.

Understanding Cloud Storage To Reduce Cloud Cost

The aforementioned hidden costs make it important to understand and implement strategies to reduce the overall cloud bill. But before we dive into strategies to reduce costs associated with cloud storage aspects, we must understand the different types of cloud storage.

• Block Storage: Although block storage was initially associated with Storage Area Networks (SANs), it has gained widespread popularity within cloud storage ecosystems. Under this model, data is organized into sizable volumes called "blocks," each functioning as an independent hard drive.
  Cloud storage providers utilize these blocks to distribute extensive datasets across multiple storage nodes. Block storage resources offer heightened performance compared to traditional networks, owing to minimal Input/Output (IO) latency, which measures the time to establish a connection between the system and the client. This attribute makes block storage especially suitable for demanding applications and large databases hosted in cloud environments.

• Object Storage: Object storage is an advanced architecture designed specifically for extensive unstructured data repositories. This approach allows for preserving data in its original format while offering the flexibility to customize metadata, enhancing accessibility and analysis capabilities. In contrast to traditional file or folder hierarchies, object storage utilizes secure buckets, providing a solid foundation for practically unlimited scalability.
  This storage efficiently accommodates unstructured data and provides cost-effective solutions for managing large volumes of information. By eliminating rigid file structures and leveraging the scalability of secure buckets, object storage becomes an adaptable and economical choice for organizations dealing with substantial and diverse datasets.

• File Storage: Often known as file-based storage, it is widely used in various applications. It arranges data in a hierarchical structure of folders and files, making it a preferred choice. This storage method is commonly used with network-attached storage (NAS) servers. It relies on popular file-level protocols like Server Message Block (SMB) for Windows and Network File System (NFS) for Linux. The familiar organization of file storage enables efficient management and access to data on different platforms and operating systems.

Factors Affecting Block Storage Cost

Now that we know the different types of cloud storage, let us look at their pricing components and hidden costs. Beginning with block storage, a range of factors determine the pricing structure of block storage, and users are invoiced according to their usage of these features.

• Volume Type and Storage Size: EBS offers a variety of volume types that are optimized for different use cases, including General Purpose (SSD), Provisioned IOPS (SSD), Cold HDD, Throughput Optimized HDD, and Magnetic. The storage size denotes the capacity of the EBS volume. Each volume type has its own cost per gigabyte, with larger volumes generally incurring higher expenses. Users select the appropriate volume type based on their applications' performance and storage requirements.
• Provisioned Throughput: Provisioned Throughput is a capability that enables users to allocate a specific level of throughput, measured in megabytes per second (MB/s), for their EBS volumes. In addition to the standard storage costs, users are billed for the provisioned throughput. This feature is particularly valuable when applications require a consistent and predictable throughput.
• Provisioned IOPS: The feature of Provisioned IOPS (Input/Output Operations Per Second) allows users to allocate a specific number of IOPS for their EBS volumes, ensuring consistent and reliable performance. In addition to the standard storage costs, users have to bear additional expenses for the provisioned IOPS. This feature proves beneficial for applications that demand high and predictable I/O performance.
• Total Snapshot Size: EBS allows users to create point-in-time snapshots of their volumes for purposes like backup and recovery. The total snapshot size represents the combined size of all the snapshots associated with a particular volume. Users are obligated to pay for the storage space utilized by these snapshots. By storing only the changed data since the last snapshot, incremental snapshots help minimize costs related to ongoing snapshot storage.

While these components profoundly impact the cloud bill, it is essential to note that the cloud-specific pricing and type of block storage volume change with time. Hence, it would be advisable to check the pricing page.

Now that we know the different pricing factors in block storage, it is essential to understand its hidden costs before we move ahead with optimization.

• Data transfer costs: Cloud providers often have fees for transferring data between regions, availability zones, or external networks. These costs can accumulate if applications need to transfer data frequently, especially across various geographical locations.
• Cross-region replication costs: When replicating data across different regions for redundancy or disaster recovery purposes, there are additional storage and data transfer expenses.
• Change in storage cost: Certain cloud providers offer multiple storage classes at different prices. If there is a change in data access patterns and a need to move data to another storage class, the migration process can result in expenses.
• API request cost: API requests made to manage and access block storage may be subject to charges by cloud providers. Making frequent or inefficient use of API calls can lead to unexpected costs.

Ways To Optimize Block Storage

Optimizing block storage is crucial for achieving a lean and cost-efficient cloud infrastructure. This optimization goes beyond a cost-cutting approach; aligning cloud resources with actual usage is necessary, guaranteeing businesses pay only for their needs. You can optimize your block storage in the following ways.

Set up Monitoring

Monitoring block storage in the cloud is pivotal for efficient cloud resource management. Continuous monitoring provides invaluable insights into storage usage, aiding in recognizing inefficiencies and optimizing resource allocation. It's crucial for capacity planning, ensuring storage resources align with real-time demands. Let's dive into understanding how Amazon CloudWatch can be used to monitor storage resources:

Amazon CloudWatch, an Amazon Web Services (AWS) offering, is an observability and monitoring service designed to collect, monitor, and manage diverse metrics and log files. Its primary goal is to provide comprehensive insights into the operational health and functionality of various AWS resources, applications, and services. CloudWatch supports a wide array of AWS services, enabling users to:

• Monitor Metrics: CloudWatch allows users to monitor and visualize metrics related to AWS resources, providing real-time data on their performance and utilization.
• Set Alarms: Users can configure alarm systems based on predefined thresholds to receive notifications or take automated actions when certain metrics cross specified thresholds.
• Automate Actions: CloudWatch enables users to automate actions based on metrics or alarms, allowing for predefined responses to specific situations.

By utilizing Amazon CloudWatch, you can gain a comprehensive view of your AWS infrastructure's health and performance, including block storage resources. This monitoring capability empowers you to proactively manage and optimize storage resources, ensuring they are in line with your application's demands and optimizing costs by scaling resources as needed.

Follow the steps below to set up Amazon CloudWatch alerts to monitor usage metrics.

• Activate CloudWatch Metrics for AWS Resources: CloudWatch automatically receives metrics from various AWS services. Storage usage metrics are readily available for storage-related services like Amazon Elastic Block Store (EBS) or Amazon Simple Storage Service (S3).
• Access the CloudWatch Console: Log in to the AWS Management Console and go to the CloudWatch service.
• Access the Alarms Section: Choose "Alarms" from the left-hand navigation pane in the CloudWatch console.
• Create an alarm: Click on the "Create Alarm" button.
• Find the metrics section: In the CloudWatch console, click the "Metrics" option in the left navigation panel.
• Select the relevant AWS service: Choose the service you wish to monitor for storage usage metrics, such as "EBS" or "S3."
• Pick the specific metric: Choose the metric related to storage usage within the selected service. Common storage metrics could include "VolumeIdleTime" for EBS volumes or "BucketSizeBytes" for S3 buckets.
• Pick the resource: Select the resource you wish to examine for storage usage metrics. This may include choosing a specific EBS volume, S3 bucket, or other storage resource.
• Specify conditions: Define the conditions for the alarm, including setting thresholds that trigger the alarm. 
• Set up actions: Configure the actions to be executed when the alarm state changes. This involves specifying the actions to be taken when the alarm is triggered and when it returns to normal. Examples of actions include sending notifications or triggering AWS Lambda functions.
• Adjust visualization settings: CloudWatch enables you to modify visualization settings, including the time range for the metrics and the preferred graph or chart format you desire to utilize.

Using monitoring tools can be challenging for the DevOps team, as it requires considerable labor and can incur additional costs during deployment. As storage environments become more complex, there is an increased risk of things getting out of control quickly. The growing intricacy poses significant challenges to effective monitoring, demanding substantial time and resources to address accordingly.

This is where you can find the right solution in an automated process like the one Lucidity Storage Audit offers. The Lucidity Storage Audit is an all-inclusive and user-friendly tool that simplifies monitoring and provides a complete view of storage with a single click. Designed to streamline your cloud management, our Storage Audit can transform your storage resource management experience through seamless automation. It empowers you to analyze spending patterns, identify areas of resource inefficiency, and reduce the risk of downtime. 

The Lucidity Storage Audit offers invaluable insights in three crucial areas:

• Analysis of Overall Disk Spending: Gain a deep understanding of your disk spending with unparalleled precision. Our audit provides detailed breakdowns of current expenses, introduces an optimized billing model, and offers actionable strategies to reduce disk spending by an impressive 70% potentially.
• Identification and Resolution of Disk Wastage: Effortlessly identify and address the root causes of disk wastage. Whether caused by idle volumes or overprovisioning, our audit tool highlights wasteful practices and offers effective, customized solutions.
• Detection of Performance Bottlenecks: Effortlessly identify performance bottlenecks in your storage system. With Lucidity's audit tool, you can quickly pinpoint areas needing performance optimization, enhancing overall efficiency and productivity.

Manual Provisioning

Managing storage resources manually indeed introduces various challenges, especially as cloud environments scale. Here are some of the issues associated with manual provisioning:

• Error Prone: Manual configurations are susceptible to human error, leading to misconfigurations, security vulnerabilities, or performance issues. These errors might involve incorrect permissions, selecting inappropriate storage classes, or configuring resources incorrectly.
• Scalability Issues: Managing numerous storage volumes individually becomes impractical as cloud environments expand. It's time-consuming and increases the likelihood of errors when each volume requires a unique configuration.
• Time-Consuming: Handling multiple configurations or extensive deployments manually is labor-intensive and time-consuming. This can result in delays in deploying applications or scaling infrastructure due to the lengthy provisioning process.
• Inefficiency: Manually provisioning storage resources can lead to inefficiencies in resource utilization. It might result in overprovisioning or underutilization, impacting the overall cost-effectiveness of the infrastructure.

Many organizations are turning to automated solutions to overcome these challenges and streamline storage provisioning. Automated provisioning eliminates human errors, ensures consistency in configurations, and significantly reduces the time required to allocate and configure storage resources.

How can this be automated with Lucidity?

As you can see, manually provisioning storage resources is challenging and full of problems. Understanding this, we at Lucidity developed an industry-first autonomous storage orchestration solution, a block storage auto-scaler.

Effortlessly streamlining the expansion and contraction of storage resources without the need for any code changes, Lucidity Auto Scaler offers unparalleled benefits. Here are the key advantages it provides:

• Zero Downtime: Bid farewell to the obstacles of manual provisioning, which often result in errors and subsequent periods of downtime. Lucidity's Auto Scaler eliminates these challenges, allowing storage resources to adjust to changing requirements seamlessly. Scaling operations occur smoothly, ensuring a seamless and uninterrupted experience. The implementation process is quick and hassle-free, causing no disruptions, as the Lucidity Auto Scaler agent consumes only 2% of CPU or RAM usage.

• Automated Expansion and Shrinkage: Lucidity ensures the availability of storage space without fail by automating the expansion and shrinkage of resources in response to changing demand. Whether there is a sudden surge in requirements or periods of low activity, Lucidity consistently adjusts your storage resources to optimize efficiency and meet workload needs.
• Save up to 70% on Storage Costs: Say goodbye to unnecessary expenses incurred by underutilized or inefficient resources. With Lucidity's automated scaling feature, you can enjoy substantial cost savings of up to 70% on storage. Our solution significantly improves disk utilization, increasing it from a mere 35% to an impressive level of 80%. Lucidity also helps you significantly reduce storage costs by empowering you to achieve optimal efficiency.

Deleting Idle, Unused, Or Independent Volumes And Old Snapshots

Removing idle or unused volumes is advisable to optimize costs and ensure efficient resource allocation. Deleting such volumes helps avoid unnecessary expenses incurred in storing inactive data. By doing so, you can ensure that you're only paying for the resources you truly require.

Once you have the required insights about idle or unused resources and volumes through Lucidity Storage Audit, delete them. Follow the steps mentioned below to delete idle/unused or independent volumes.

• Access dashboard: To access the EC2 dashboard, sign in to the AWS Management Console at AWS Management Console.
• Go to EBS: Next, navigate to the Elastic Block Store section in the left panel and find the Volumes section.
• Check EBS status: To check the status of each EBS volume, scroll horizontally to the State column. If a volume is labeled as "in use," it is currently associated with an instance. Conversely, if a volume is in an "available" state, it indicates that any instance is not using it and can be safely deleted.

Similarly, to minimize storage expenses and accurately allocate resources, it is essential to remove unnecessary old snapshots. You can streamline costs and guarantee payment solely for your current storage by eliminating outdated snapshots. Follow the steps below to delete snapshots.

• Sign in: To access the Amazon EC2 console, visit https://console.aws.amazon.com/ec2/. Next, locate and click on "Snapshots" in the navigation pane.
• Find Snapshot: From the list of snapshots, identify the desired snapshot for deletion. Proceed by clicking on "Actions" and selecting "Delete snapshot."
• Delete: Finally, confirm the deletion by clicking "Delete."

Factors Affecting Object Storage Cost

Now that we have covered cost optimization for block storage, let us move on to object storage. Following are the pricing components associated with object storage that impact the overall cloud bill.

• Standard Storage Service (Hourly Charges): Amazon S3 provides a standard storage service that incurs charges on an hourly basis. These charges are associated with the utilized storage capacity for storing objects in the S3 system.
• Standard API Costs for File Operations (Per 1,000 Requests). Read requests cost is applicable when retrieving (reading) objects from your S3 bucket. It is $0.0004 per 1,000 requests and the write requests cost is applicable when adding, overwriting, or deleting objects in your S3 bucket. It is $0.005 per 1,000 requests and is ten times higher than read requests.
• Cost of Transferring Data Outside the AWS Region: This cost is related to transferring data from your S3 bucket to a location outside the AWS region where your S3 bucket is currently located. It amounts to $0.02 per Gigabyte per month.
• Cost of Transferring Data to the Internet (First 10 Terabytes): This cost applies to transferring data from your S3 bucket to the Internet. The specified rate is valid for the first 10 Terabytes transferred. It is $0.09 per Gigabyte.

Now that we know the pricing factors associated with object storage that impact the overall cloud bill let us talk about the hidden object storage-related costs that can impact the cloud bill.

• Data Retrieval Costs: When uploading data to object storage services, it is often free or comes with minimal charges. However, certain cloud providers may impose fees for data retrieval. You might incur additional expenses if you retrieve large volumes of data or frequently access stored objects.
• API Request Costs: Cloud providers typically require payment for API requests made to object storage services. These charges encompass costs associated with tasks like listing objects, reading metadata, and performing other operations. It is crucial to grasp your application's access patterns to estimate API request costs accurately.
• Data Transfer Costs: Transferring data out of the object storage service to external locations or between regions can be quite costly. This is particularly significant if your application involves frequent data transfers.
• Costs of Cross-Region Replication: Should you duplicate your data across various regions to ensure redundancy or plan for potential disasters, it is essential to consider the monetary implications of cross-region replication. Additional charges may arise due to data transfers between regions.
• Expenses related to Data Lifecycle Management: Incorporating data lifecycle management strategies, such as implementing automatic tiering or setting expiration for objects, may result in associated costs. For instance, switching objects between different storage classes or automatically deleting expired data could attract charges.

Ways To Optimize Object Storage

Mentioned below are some ways you can optimize object storage to reduce overall cloud costs.

S3 Intelligent Tiering

AWS S3 Intelligent Tiering presents a cost-effective storage solution within the AWS S3 ecosystem. It automates data organization across different storage tiers, eliminating the need for manual object management and reducing the risks of human error.

Unlike other storage choices, AWS S3 Intelligent Tiering does not add additional costs for accessing objects. Instead, users are only charged a minimal fee of $0.0025 per 1,000 objects for monitoring and automation. The total cost of cloud storage depends on the tier assigned to the data, which can include archival tiers if required.

By utilizing S3 Intelligent Tiering, startups, and AWS users can avoid unnecessary expenses associated with AWS S3 storage. Many users typically default to the standard S3 Storage tier, resulting in potential overpayments of up to 70%. S3 Intelligent Tiering is vital in optimizing AWS S3 costs, ensuring that data resides in the most cost-efficient storage tier, ultimately leading to significant savings.

Lifecycle Management

AWS S3 Lifecycle policies provide an automated framework that helps manage the lifecycle of objects within your S3 storage. This framework offers various advantages, including cost optimization, improved data protection, and ensuring compliance by defining how objects transition between storage tiers or specifying deletion timelines.

By utilizing AWS S3 lifecycle policies, you have precise control over the timing of object transitions between storage tiers. This allows for effortless movement of infrequently accessed data to archival S3 tiers. Moreover, the inherent automation in these policies facilitates the identification of objects set for expiration or deletion, eliminating the need for manual oversight.

The implementation of AWS S3 Lifecycle policies brings two significant benefits. Firstly, it enables automatic cost reduction as data becomes less relevant to your application. When data becomes older or is accessed less frequently, it can be automatically shifted to more economical storage layers, leading to noticeable cost savings. Additionally, the automated process minimizes the possibility of human mistakes, ensuring that less critical data does not remain in expensive storage tiers.

Monitoring And Alerts

Like for optimizing block storage, you can use CloudWatch alerts to monitor usage metrics. By leveraging this tool, you can gain real-time visibility into your S3 usage and receive prompt alerts whenever certain conditions are fulfilled. This proactive methodology empowers you to tackle potential concerns swiftly, thus guaranteeing optimal performance and cost-efficiency for your S3 storage.

Take, for instance, to ensure timely awareness of your S3 bucket's storage capacity nearing a predetermined threshold, an alarm can be established using the S3 bucket size metric. This alarm will facilitate notifications whenever the storage size approaches or surpasses the predefined capacity. Such proactive monitoring mitigates the risks of reaching storage limits, enabling smooth operations.

Another example of how CloudWatch alerts can help you monitor usage metrics is to ensure prompt notification about any sudden spike in S3 request latency; you can configure CloudWatch alarms for latency metrics. This proactive measure enables timely identification of performance concerns and facilitates necessary remedial steps. For instance, you can investigate the underlying cause or optimize your S3 configurations to enhance overall performance.

Furthermore, you can also enable Cost Explorer or download reports about your S3 buckets to stay informed about your usage costs. AWS Cost Explorer is an Amazon Web Services (AWS) tool that enables users to effortlessly visualize, comprehend, and examine their AWS expenditures and utilization throughout a specified duration. It offers the following features.

• Cost visualization: The cost breakdown feature presents a comprehensive view of expenses across various services, including S3. With this, you can quickly determine the amount allocated to storage, data transfer, and other associated S3 services, ensuring transparency in your expenditure.
• Cost forecasting: The AWS Cost Explorer offers a tool that utilizes past data to estimate your forthcoming AWS expenses. This valuable feature aids in effective planning and budgeting for your S3 usage.
• Cost alerts: You can establish alerts according to specific cost or usage limits to ensure cost efficiency and control. For S3, these alerts allow you to monitor and detect sudden spikes in storage expenses or data transfer costs.
• Report: You can generate and save personalized reports that thoroughly analyze your S3 usage and associated expenses. These reports can be customized by employing time range, service, region, and tags. You can obtain more detailed and in-depth insights by applying filters and organizing data into distinct dimensions, such as AWS region, S3 storage class, or tags.

Strategic Object Storage Bucket And Instance Alignment

For optimal cost management and up-to-date information, it is advisable to consolidate your Amazon S3 buckets with your Amazon EC2 instances in the same AWS region. When these instances and buckets are located in different areas, not only does it result in higher data transfer expenses, but it also introduces performance drawbacks. To address these concerns, ensure that both services are configured within a unified AWS region, enabling cost-efficient and unhindered data exchange.

S3 Versioning Optimization

S3 versions offer valuable benefits such as data protection, compliance support, and recovery from accidental deletions or overwrites—however, AWS charges for every version of a data object that is stored and transferred. You will be billed for them all if you have multiple versions of an object. In the following ways, you can prevent increased object storage costs due to S3 versioning.

• Implement lifecycle policies: Define and execute lifecycle policies that enable the automated transition or deletion of object versions according to your specific needs. By effectively managing the lifecycle of object versions, you can effectively manage storage costs.
• Review object versions: Regularly assess the versions of objects stored in your S3 bucket and determine if older versions can be securely deleted or shifted to a storage class with lower costs.
• Consider S3 intelligent tiering: If you encounter varying access patterns for different object versions, you should utilize S3 Intelligent Tiering. This feature automatically adjusts the access tiers of objects based on changing access patterns, potentially optimizing costs.

Bulk Uploading Of Objects

The data size does not determine the cost of using the Amazon S3 API but rather the type of API call used. The cost remains the same whether you upload a large or small file. However, the overall cost can quickly increase if you upload multiple small files. To minimize this cost, a practical solution is combining multiple small objects into one file with the tar utility. This allows for bulk uploads instead of incremental chunks, reducing the number of S3 API calls and, subsequently, reducing overall costs. This approach optimizes the efficiency of data transfer operations and promotes a more cost-effective use of Amazon S3 resources.

How Did We Help Uniguest Identify Its Hidden Cloud Wastage Factors?

Now you know some of the most effective strategies to optimize your block and object storage and cut down on overall cloud bills. Let us show you how Lucidity helped one of many organizations identify cloud wastage and take prompt actions to reduce overall cloud bills.

Uniguest, a prominent company specializing in digital signage and engagement technology, had relied on Azure as their chosen cloud service provider for quite some time. However, effectively managing the complexities of their cloud storage environment became a significant challenge for them. To enhance their cloud cost optimization efforts, they approached us with a specific obstacle: the urgent requirement for comprehensive visibility into their storage parameters.

Gathering utilization data individually from various disk drives had become arduous, and the prospect of deploying costly monitoring tools only added to their concerns. Recognizing the labor-intensive nature of manually tracking storage usage, we took it upon ourselves to conduct a thorough audit.

We deployed Lucidity Storage Audit, an easily accessible and preconfigured tool that simplifies the storage auditing process. By leveraging Azure's internal services, Lucidity Audit provided essential insights into disk usage and health, enabling smooth cost optimization and prevention of downtime.

With just one click, our agentless audit process uncovered a shocking overspend of up to 71% in Uniguest's Azure storage. The main culprit behind this excessive expenditure was the under-utilization or over-provisioning of resources, accounting for 95% of the wastage. On average, disk utilization stood at a mere 22%. The remaining 5% comprised idle and unused resources, primarily caused by storage that was either not connected to a virtual machine or associated with a stopped VM.

We leveraged the audit report to implement Lucidity Auto Scaler—an agent-based architecture with an auto-scaler that is an additional layer over Azure's cloud infrastructure. 

The deployment process of the auto-scaler was straightforward, requiring just three clicks. Once activated, it seamlessly adjusted storage capacities, optimizing disk utilization within a targeted 70-80% range. 

This proactive strategy proved instrumental in drastically reducing overall storage costs while providing the agility to accommodate workload spikes or sudden surge in traffic effortlessly. We achieved this by rapidly expanding disk storage within a mere minute.

The outcome was exceptional, with a 59% decrease in storage expenses and a significant improvement in disk utilization, bringing it within the targeted range of 75%-80%. This demonstrated that Lucidity optimized costs and ensured optimal resource utilization within Uniguest's Azure environment.

Proactive Cloud Management For Enhanced Efficiency

Proactive management entails aligning cloud storage resources with an organization's strategic objectives. Its primary objective is to customize the storage infrastructure to effectively support and enhance critical business processes, applications, and services. By constantly adapting to evolving business needs, technological advancements, and industry trends, proactive management ensures the agility needed to remain competitive in a rapidly changing environment. To achieve this, optimization efforts focus on several key aspects. These include right-sizing storage resources, leveraging suitable storage classes, and implementing data lifecycle policies. These practices allow storage resources to be utilized optimally, avoiding overprovisioning and reducing unnecessary costs.

If you are struggling to control your cloud cost and are suspicious that storage resource usage might be the culprit behind it, then you should consider reaching out to us at Lucidity. With a quick demo, you will get to know how you can identify the cost saving opportunities and how automation can bring down your cloud cost.

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