With interest rates rising as the FED attempts to tamp down long-term inflationary trends, material costs increasing, and commodity scarcity, virtually every business is experiencing cost pressures across multiple fronts. For most, the nature of the technology they rely on for key operations is relatively opaque, making it a great hiding place for unnecessary costs.
What’s more, cloud services vendors and third-party technology providers may be incentivized by their pricing structures to overlook unnecessary costs accruing.
Here are 5 tips for identifying and eliminating unnecessary spending related to your cloud infrastructure.
Right Size Your Resources
Clients often migrate to cloud services anticipating that access to legacy documents will be greater than reality bears out. It’s a good idea to assess the user metrics roughly 6 months following a migration to ensure resources are allocated effectively based on utilization, performance, compliance requirements, and other key factors. Assessing and optimizing your environment can bring about savings opportunities.
Actionable Insight: Generally, cold storage is more cost effective than hot storage. If you have legacy data on production grade storage despite relatively few touchpoints, consider transitioning that data to archival storage. It will remain accessible, but won’t contribute as much to your bill.
Review Your Licenses
It’s very common for companies to inadvertently overpay for licensing. This often happens when companies purchase overlapping licenses at both the infrastructure and cloud level. Major vendors offer a variety of products and bundled services, so this issue arises with popular platforms like Microsoft, Amazon Web Services, Google Cloud, and others.
Actionable Insight: Review your catalog of licenses to ensure you’re not paying twice for the same service. Take your search for cost-efficiency even further by investigating bundle, partnership, and other opportunities to save more on the suite of services your business relies on.
Optimize Your Network
With many cloud providers, ingest is free but egress carries fees. If your network architecture is set up to frequently or unnecessarily pull data from the cloud, it could be racking up charges. That might look like systems on each US coast moving data back and forth, accruing charges with each instance of data egress.
Actionable Insight: Investigate opportunities for on-premises infrastructure that can serve the same purpose as an existing network without incurring unnecessary costs related to the movement of data.
Avoid Backup Accumulation
Backing up your data is a crucial best practice but it can also be an engine for cost accumulation. That’s because the information on backed-up servers is often unnecessarily retained and carried over in subsequent backups. Stored data can quickly become redundant as disk storage, and legacy backups are carried forward with each server transition. It’s surprisingly common for businesses to spend up to 50% of monthly expenses on unnecessarily stored or redundant data. Retention is a more complicated process than “save everything without exception” – that’s more akin to digital hoarding.
Actionable Insight: Make sure your business isn’t preserving outdated and redundant disks. Those represent substantial costs on your bill and accumulate more over time if left unaddressed.
Eliminate Redundancy
As mentioned in the prior tip, optimizing data retention takes some thought and care. When it comes to your data and related processes, make sure you have what you need – and no more. Account for compliance and business imperatives, use metrics to ensure high-value data is available in production environments, and get comfortable with maintaining the rest in a storage facility of some kind. That may be on- or off-site, but data will remain accessible while your bill shrinks.
Actionable Insight: When it comes to retention, a useful rule of thumb at the time of backup is to delete the production data that’s been most recently backed up, delete the secondary backup, and retain the primary (most recent) backup for 6 months to a year, depending on applicable policies.
Conclusion
Don’t be intimidated into overpaying by the complexity of your technology environment. Investigate opportunities to reduce costs, and rely on an experienced, transparent provider like CBIZ to help. If your bill is unclear, know that CBIZ reviews costs with clients in detail, so you not only know what you’re paying for, you know the purpose each cost serves.
If you have any questions about your cloud services and associated costs, or simply want to optimize your enterprise technology, contact CBIZ Technology today.
Frequently Asked Questions
Businesses can reduce cloud computing costs by regularly evaluating resource utilization and aligning cloud services with actual business needs. One of the most effective cloud cost optimization strategies is rightsizing storage, compute, and network resources based on usage data. Organizations should also move infrequently accessed data to lower-cost archival storage, eliminate unused resources, and monitor cloud environments for inefficiencies. Conducting periodic cloud infrastructure assessments helps ensure performance requirements are met while avoiding unnecessary spending on underutilized services.
Many organizations unknowingly overspend on cloud services due to duplicate software licenses, unnecessary data transfers, redundant backups, and oversized storage environments. Network egress fees can also become a significant expense when large amounts of data are frequently moved between cloud regions or locations. Additionally, retaining outdated backups and legacy data often increases cloud storage costs without providing business value. A comprehensive cloud cost analysis can help identify hidden expenses and uncover opportunities for savings across platforms such as Microsoft Azure, AWS, and Google Cloud.
Effective data retention management helps businesses control cloud storage costs while maintaining compliance and data accessibility. Retaining duplicate backups, obsolete files, and unnecessary copies of data can significantly increase monthly cloud expenses over time. Organizations should establish clear data retention policies that balance operational requirements, regulatory obligations, and cost efficiency. By regularly reviewing backup strategies, removing redundant data, and leveraging archival storage solutions, businesses can improve storage management, reduce waste, and maximize the return on their cloud technology investments.