Spend less on the cloud and more on attracting top tech talent

Right now, cloud computing is at the heart of business operations, and data stored in the cloud is expected to reach 100 zettabytes by 2025 . This growth underscores the critical role of the cloud in data management and business strategy. Trends like serverless computing and FinOps are redefining efficiency, allowing companies to pay only for the resources they use.

In this context, optimizing cloud costs emerges as a key strategy not only to save money, but to reallocate resources to areas of greater impact, such as attracting and retaining the best technological talent .

This article aims to provide technology leaders with concise, practical insights into how to optimize cloud costs. We'll explore how effective financial management in the cloud can not only drive technological efficiency but also foster a skilled workforce.

Defining Cloud Cost Optimization

Cloud cost optimization is the process of managing and reducing a company's overall cloud spending . This involves identifying poorly managed resources, right-sizing computing services, and selecting the most cost-effective pricing models. This is not just a cost-saving measure, but a strategic approach to maximizing the value of cloud investments.

Because it is necessary?

With their complex and varied pricing models, cloud services can lead to significant unplanned expenses. Effective optimization not only prevents overspending on underutilized resources, but also allows you to reallocate budget towards innovation and talent acquisition.

Analysis from Deloitte suggests that effective cloud cost optimization can lead to savings of up to 45% on cloud costs, with the majority of these savings coming from consumption management and purchasing tactics .

For example, we recommend automation tools to our customers to start and stop non-essential instances during off-hours. Development and testing environments can be shut down overnight and during weekends. Another essential practice is to clean up unused or obsolete storage volumes and snapshots. You can move infrequently accessed data to lower-cost storage classes like Amazon S3 Glacier for long-term archiving.

Cloud cost optimization improves budgeting. Consider purchasing Reserved Instances (RIs) or purchasing a Savings Plan for a period of 1 or 3 years. You will get a significant discount compared to on-demand prices. Choose the compromise based on your steady-state usage . One practice we also recommend to our clients is to use cloud cost management tools to proactively monitor and manage your expenses. These tools can identify inefficiencies, suggest optimizations, and help apply policies to keep spending under control.

These practices allow companies to adjust resources and eliminate overallocation . This is not a one-time activity, but a new way of operating IT businesses, improving operational and financial efficiency.

IBM emphasizes that optimizing cloud costs must be an ongoing process , integrating automation and analytics. IBM cloud computing optimization features such as Turbonomics automate scaling to the right VM (virtual machine) instance type and manage resources such as storage and databases efficiently.

Imagine having a team of expert gardeners equipped with sensors and tools that detect which parts of your garden need the most water, which plants need trimming, and when to fertilize for optimal health and growth. These gardeners work around the clock to keep each plant in its optimal state of health.

In the cloud garden, Turbonomic acts like these expert gardeners. It continuously analyzes your cloud environment, automatically tuning resources like VM Instances , storage, and databases. It ensures that each service is scaled to the correct size and performance level, eliminating waste and ensuring savings.

3 Key Strategies for Reducing Cloud Costs

While cloud services are quite confusing from an outsider's perspective, cost reduction strategies are quite straightforward. They involve ensuring that we are using the right amount of resources and that we are not wasting money on unnecessary maintenance and storage, finding the most effective product for our current demand.

1. Resource Management

Regularly review and adjust resources to meet actual workload requirements. This involves resizing resources, scaling services based on demand, and eliminating unused resources. Prioritize automation and monitoring of dynamic systems.

For example, we had a business partner who requested dynamic scaling for an ecommerce project with fluctuating demands around seasonal purchasing peaks. We guarantee optimal performance during peaks and savings during lulls.

2. Waste disposal

Audit cloud environments to identify and eliminate waste. We have worked on numerous cloud migrations and audits as companies moved from on-premises data storage to the cloud. Simply put, it gets data to those who need it faster.

However, fast data comes at a cost. In these cases, our engineers identified and eliminated old snapshots, unused instances, and redundant services associated with legacy applications. Cleaning up and switching to efficient services has reduced our customers' monthly cloud expenses, showing why regular waste audits are important for cost optimization.

3. Leveraging pricing models

Make use of Reserved Instances, Savings Plans, and Spot Instances when appropriate to optimize costs. These pricing models can offer significant savings over standard on-demand pricing.

Consider a data analysis project that requires substantial but variable computing power. A good approach would be to use a combination of Reserved Instances for base capacity and Spot Instances for peak demand. This could capitalize on lower prices for Reserved Capacity and additional discounts for Spot Instances .

Redirecting cloud savings to acquire top technology talent

Efficient cost management in the cloud can significantly impact human resources strategies. This financial reorientation can improve the workforce in the competitive technology sector.

Changes in the technology industry in 2023: an opportunity

The technology sector surpassed 262 thousand layoffs in 2023 , involving giants such as Amazon and Google. In January 2024, continued layoffs freed up a pool of specialized talent. Companies can take advantage of this by reallocating cloud savings to hiring these skilled professionals. This strategy could position them for growth as the market recovers.

Technological strategies to attract and retain talent

A great investment opportunity is HR technology. Take for example our own AI-based system that assesses language proficiency in the early stages of the selection process. This saved our acquisition team valuable time they could have invested in more thorough and specialized testing.

While attracting talent is essential, retaining it is also vital. Essential strategies include competitive compensation, development opportunities and improved work environments. A smarter way to reallocate resources is to look at talent retention technology.

In 2023, we implemented a machine learning algorithm that improved our talent experience. This resulted in a 52% reduction in revenue year over year (year on year). This tool conducted research into the root causes of burnout risk. The result is valuable insights that our team can use to meaningfully engage with talent, leading to solutions focused on talent satisfaction.

Strategic Talent and Innovation for Agile Business Growth

Specialized talent partnerships give companies access to world-class expertise. Through outsourcing, companies gain qualified engineers, cost savings, reduced risks and faster delivery.

By optimizing your budget to address technology challenges, innovation goals, and growth opportunities rather than spending it on underutilized cloud services, your team can share knowledge and best practices in dynamic partnerships.

Overview of Popular Cloud Cost Management Tools in 2024

Now that we've covered the many benefits and ways to make the most of cost optimization savings in the cloud, let's look at some popular tools to employ as a first step. In 2024, several cloud cost management tools stand out for their efficiency and functionalities:

1. Apptio Cloudability : This tool offers a robust cloud financial management platform with a focus on visibility, governance, and optimization of cloud resources. It is particularly beneficial for its budgeting, forecasting, and scaling features.
2. Microsoft Azure Cost Management + Billing : A set of custom tools for monitoring, allocating, and optimizing Microsoft Cloud workloads. It provides detailed reporting and proactive cost monitoring capabilities.
3. Densify : Known for its machine learning recommendations, Densify optimizes cloud resources across multiple environments and offers optimization as code.
4. Leverage : A continuous integration and delivery platform that increases transparency, optimization, and cost governance. It provides detailed visibility into Kubernetes clusters and cloud spend.
5. IBM Turbonomics : Focuses on real-time automated actions to efficiently use compute, storage, and networking resources. It is beneficial to avoid over-provisioning, but can be complex to configure.
6. Tanzu Cloudhealth : Manages cloud costs, usage, performance, and security. It offers comprehensive tools to manage, analyze, and optimize cloud infrastructure and spending.
7. Flexera : Known for its actionable recommendations, budget controls, and cost policies, Flexera offers automation tools for efficient cloud optimization and governance.
8. CloudCheckr : Provides detailed cloud cost allocation data and predictive analytics for snapshot resizing and cleanup.

Conclusion

Following the enormous growth of cloud technologies during the 2020 pandemic, we see more and more companies abandoning the cloud, in what some experts call cloud repatriation . This is not the end of cloud services; Instead, many companies are realizing that, like any other tool, cloud services are not a complete solution. Shop around to find options that meet your needs and save with autoscaling.

This, plus the fact that server hardware prices are decreasing, causes companies to reallocate their resources to other areas, such as acquiring and retaining high-level talent: an excellent strategy in the context of massive layoffs in the sector technology that are filling the market with young and experienced talent, ready for new opportunities.