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There are many challenges that you can face with migrating your business to the cloud, from potential issues with security to lack of control. Cost management is, perhaps, one of the biggest hurdles that you must overcome to maximize the benefits of your cloud computing solution.

This is a bigger challenge for organizations than you may think. According to the RightScale 2018 State of the Cloud Survey, more than a quarter of all enterprises have a cloud budget greater than $6 million each year. An additional 52 percent of organizations spend in excess of $1.2 million on their cloud services annually, with even more planning to increase their overall spending.

As spending continues to go up, however, the issue of wasted cloud spend is becoming more apparent. With waste as high as 35 percent among cloud users, the need to control and optimize cloud cost has become more vital than ever. Read on to explore a few of the best practices for managing cloud costs at your company:

Understand exactly where costs are coming from

You won’t be able to manage your cloud costs without first identifying the origin of each expense you find on your bill at the end of the month. This is particularly important if you employ cloud services across your entire organization. Are ongoing projects making your monthly cloud bill skyrocket? Are there specific users that are consuming too many resources on their own?

Or, perhaps there are certain departments that are incurring higher cloud costs than others. You should audit each area to determine how much each one is spending on cloud services. This information will better prepare you to designate your cloud budget to various departments and minimize costs where needed.

Agree to a long-term contract

The pay structure of the cloud is one of the biggest draws for businesses looking to save money on the services they need most. The cloud allows you to pay for your services each month, which can help you predict and manage costs in the short term, while some cloud models (namely, the public cloud) allow you to follow a “pay per use” structure. Essentially, your cloud bill will reflect the services you use each month. While this can be a beneficial agreement for many businesses, it’s less easy to anticipate what your cloud spending will be in any given billing period.

You can more easily manage your cloud costs by entering into a long-term agreement with your provider instead of a monthly one. If you already expect that you’ll be using cloud services for more than a year, then you could sign a yearly contract to secure lower prices. This could save you more money in the long run.

Look at less expensive alternatives for certain services

If you have certain cloud services you’re underutilizing, then why not see if you can move to an alternative setup that’s less expensive? For instance, you may be currently leveraging an expensive, high-end database to store data that could go into a regular server or another collaborative portal. Maybe you allot a good amount of your cloud budget toward paying for a sales service that only generates a single report. It would be far more cost-effective for your business to find an alternative way to create that same document.

Opt for serverless computing

One of the fastest-growing cloud computing trends, serverless computing is another way to manage cloud spending at your organization. This setup will eliminate your reliance on servers when you are developing and running applications. By opting for serverless computing, your organization won’t need to rely on internal developers and IT professionals to oversee your cloud instances. The management of these processes will instead go to your cloud vendor, saving you time—and more importantly, money—on operating costs.

Deploy multicloud services

Cost management has become one of the biggest motivators behind switching to a multicloud model. Similar to the hybrid cloud, this model involves the use of several different cloud services at once. Working with multiple cloud vendors has many different advantages, but cost-effectiveness is perhaps the most significant.

In a multicloud environment, you will have the freedom to work with the vendors who offer the most competitive prices for certain applications and services. This will prevent you from becoming locked in with a single provider. You can easily mix and match your cloud offerings to suit your budget, with no restrictions.

Get rid of cloud resources you aren’t using

Much of wasted cloud spend comes from exactly what the name suggests: spending money on wasted cloud services. Look at your cloud services and determine if you have any “unassigned costs” like idle virtual machines. During your audit, you may also find that you are paying for much more server space than you are actually using. If your organization doesn’t need these excess cloud resources, then you could save a large portion of your cloud budget by simply eliminating them.