Today, the days of on-premises data centers are mostly behind us, and the cloud has largely taken over with the promise of scalability, flexibility and cost-efficiency. Despite these promises, the cloud often falls short of these ideals. Why?

Because managing the cloud is hard—especially when it comes to managing its costs. There are no automatic savings the moment you sign up with AWS or any other cloud provider. Instead, realizing cloud savings requires lots of capacity planning, careful analysis, consistent monitoring, accurate forecasting and endless adjustments—it’s enough work to make anyone’s head spin.

But the rewards make it worth the effort. If you manage your cloud correctly, it offers tremendous savings compared to on-premises environments. However, moving to the cloud without first putting a cost strategy in place can cost your organization millions as you scale in the long term.

So, what guidelines should you follow to ensure you’re maximizing your potential cloud savings? Here are some common do’s and don’ts you can start implementing—or stop doing—now.

Moving to the Cloud

Migrating to the cloud is the first, and the most complex step. So before you get started, bear in mind the following:

Do: Analyze Your Environment Prior to Migration

Let’s face it—if you have a disorganized and over-provisioned on-premises environment, you’ll have a disorganized and over-provisioned cloud environment. Unless, of course, you clean it up prior to the big move.

On the bright side, cleaning up your current, familiar environment is less daunting than doing the clean-up once you move to the new and unfamiliar cloud environment. Therefore, it’s critical to analyze your current environment prior to your cloud migration.

Start by decommissioning all assets that are not currently being used. For example, you may have a virtual machine (VM) that was provisioned for a particular project and not turned off once that project was finished. As a result, you’d have an application running that is no longer needed. Identifying and removing these resources now will lower your future cloud costs while relieving engineers of future headaches.

Do: Create a Blueprint for Your Cloud Architecture

Next, you need to re-architect your application stack. Don’t worry, this task isn’t as scary as it sounds. You’ll need to create a list of the infrastructure you’re using now and find its corresponding infrastructure in the cloud. Say, for example, you’re using multiple dedicated servers for message queuing. If you’re moving to AWS, you’ll need to identify similar instance types in AWS prior to your cloud migration.

Don’t: Follow the “Lift and Shift” Approach

It may be tempting, but whatever you do, avoid the “lift and shift” approach. There are certainly ways to optimize your current environment, so simply moving exactly what you have into the cloud is a missed opportunity to reorganize, restructure and optimize performance and costs.

For example, you may be running VMs that are not being used, backing up unused development servers, or storing data that can be allocated to a low-cost archival storage class. Make sure to readjust your architecture to fit the cloud, not the other way around.

Governance

The bottom line is, somebody needs to be responsible for managing cloud costs. Depending on your company size, it can be a team or an individual, but it must get done sooner rather than later.

Do: Ensure Cloud Spend is Managed by a Specific Individual or Team

Sticking to a cloud budget is easier said than done, but if you delegate this task to a team or specific individual, it will be their top priority to ensure your company stays on target. They will be responsible for handling cloud budgets, establishing who can and cannot provision resources and monitoring use.

If you fail to establish governance, you run the risk of having many individuals provisioning resources without any liability or accountability, which results in significant overspend and lots of chaos.

Don’t: Presume Governance Is Only for Large Organizations

Think your company’s too small for governance? Think again.

At least one individual should always be responsible for monitoring your cloud spend and ensuring it stays in line with the allocated budget. This person will work hand-in-hand with finance to create budgets, monitor use, create billing alerts and more.

Cloud Security

If you’re migrating to the cloud without thinking about security, you’re making a huge mistake. It is estimated that cybercrime will cost the world over $10.5 trillion by 2025. Even worse, according to Verizon’s recent study, cloud security breaches have surpassed their on-premises counterparts for the first time ever.

So, needless to say, security should be prioritized when moving to the cloud. Here are some tips to get started.

Do: Develop a Layered, Multi-Tiered Cloud Security Plan

Your cloud security strategy should safeguard both your data and IT assets in the event of a cyberattack, while being compliant with the standards and regulations specific to your industry.

Some cloud security strategies include:

• Building your solution with a well-architected framework
• Using solutions like threat detection, automated patching or security auditing
• Connecting your on-premises network to the cloud using a transit gateway or similar technologies
• Creating enough firewall rules for traditional systems and web applications

Don’t: Rely Exclusively on Your Cloud Provider’s Security Controls

While many cloud providers offer great security solutions, relying on them exclusively will not help you cover your bases. AWS regularly refers to the shared responsibility model, which states that AWS covers infrastructure, but the user must secure their own applications.

Scheduling Your instances

The longer you run your servers, the larger your bill will be. And, unfortunately for us, creating a new VM in the cloud has become so easy that many forget to turn them off when they are no longer in use. This results in cloud costs that are up to 66% higher than they need to be.

So, if you’re looking to cut cloud costs, keep the following in mind when scheduling your instances:

Do: Automatically Schedule Instances

Let’s face it, it’s easy to forget about shutting down instances after hours. In fact, it’s so easy, it can happen to even the best of us. Automatically scheduling instances, on the other hand, avoids human error while simplifying the shutdown process.

AWS’s Amazon Instance Scheduler or Azure’s Start/Stop feature makes it easy to shut down instances from non-production environments during “off hours” and spin them back up once they’re needed. In addition to these tools, you should consider implementing alerting so you can be notified if anything goes wrong in the scheduling process.

Do: Take Advantage of AWS Auto-Scaling

AWS auto scaling enables you to take full advantage of the cloud’s elasticity. The technology continuously monitors your application’s capacity needs and automatically adjusts resources to fit its current use. As a result, you don’t have to spin out a large VM for your workload. Instead, you can begin with a low-spec server and add it to an auto scaling group. When demand increases, more nodes will be added to your fleet to accommodate scale. Likewise, when the demand decreases, the extra nodes will be spun down.

This helps optimize both performance and costs so you’re never paying for resources you’re not using and you always have the right number of instances to run your applications.

Don’t: Allow Your VMs to Run Continuously

This may seem obvious, but as we mentioned earlier, many forget to shut down VMs when they are not needed. For example, 9 AM to 5 PM on weekdays may be your peak hours. This means you probably won’t need certain VMs to run on Saturdays or at 3 AM—so why pay for them? Instead, shut down VMs during “off hours” to ensure your savings are maximized.

Tagging Your Assets

There’s no getting around it—tagging assets is an essential part of understanding your usage patterns and optimizing cloud costs. Asset tags are metadata labels which can be attributed to individual resources in your cloud fleet to track which application it belongs to. Usually, you can assign up to 50 tags per resource, and they can be organized and named according to your needs.

When tagging assets, make sure to keep in mind the following:

Do: Implement a Tagging Strategy Early in your Cloud Journey

It’s never too early to start tagging assets. In fact, the longer you postpone it, the harder it will become. Once your spend and usage increases, which it inevitably will, you will need to have a tagging system in place in order to determine which team is responsible for each asset (so you can have them evaluate resources and costs), deactivate unneeded resources and more.

Tags are extremely useful in many real-world scenarios. For example, if you’re not using a specific application, you can search for the tag “application” with a value of the application’s name. You will then see all resources related to that application, so you can easily delete them.

Additionally, tags can be used to enforce budgets and prevent overspending. Simply set a budget threshold on your tag and set up alerts to notify you when you’re getting close to that threshold.

Don’t: Embark on Cloud Migration Before Tagging Assets

Tagging is simple if you do it in the beginning when your environment isn’t so complex. But it’s excruciatingly difficult once your environment is more mature. So, if you’re moving to the cloud, make sure to start tagging beforehand so you don’t have any regrets.

Do: Use Reserved Instances and Savings Plans

If you’re on AWS, using reserved instances (RIs) and savings plans can save you up to 72% over the cloud giant’s on-demand pricing. The catch is you have to commit to purchasing RIs one to three years in advance, which means you’ll need to predict your usage needs ahead of time. Despite this challenge, RIs offer tremendous savings for those that use them wisely.

Don’t: Purchase Reserved Instances or Savings Plans Without Building a Strategy

When using RIs, it’s crucial to develop a strategy to ensure your savings are maximized. Often, people make the mistake of purchasing many RIs, which are not used. This results in upfront savings, but no return. Make sure to come up with a plan for how you handle reserved capacity. Selling them on the AWS marketplace is a good place to start.

We move to the cloud for the promise of more flexibility and lower costs. But to actualize that promise, we can’t expect the cloud or our cloud provider to do all of the work for us. Unfortunately, cloud savings are not automatic.

That’s why creating a strategy that covers costs, security, and other critical aspects of cloud migration should be your No. 1 priority. Even if you’ve been using the cloud for years, you should continue to reassess your cloud cost strategy to ensure it is optimized fully. Start by pinpointing practices that result in cloud waste and creating a game plan to prevent it from happening.

Keep in mind that new technologies are always emerging, so make sure you are aware of any industry changes which could impact your cloud cost strategy.