An exploration of GCP cloud spend and effective ways to reduce it. Equipped with the right information, you can set the stage for your GCP cost optimization journey.
Google Cloud Platform (GCP) cost optimization is a strategic approach designed to manage and minimize the costs associated with using GCP's suite of cloud services. It involves the efficient allocation of resources, proper budgeting, and understanding the pricing models of various GCP services.
This approach includes using tools and best practices that allow businesses to leverage the robustness and flexibility of GCP services without incurring unnecessary costs. The focus is on maximizing the value from each dollar spent on the cloud.
This guide is designed to equip you with the necessary knowledge related to controlling GCP costs. We have compiled a list of industry best practices, leading cloud cost management tools, and how to pick the one that’s ideal for you.
To truly grasp the profound significance of Google Cloud Platform (GCP) cost optimization, let's delve into an actual case study. A thriving company heavily relied on cloud resources for data processing, content delivery, and various other operations.
Initially, they had a manageable cloud budget of $250,000 per month. However, as their business grew and customer demands escalated, their GCP usage grew exponentially. As a result, within a span of six months, their monthly cloud costs soared to a staggering $500,000.
Understanding the gravity of the situation, they sought the expertise of Economize. Our detailed examination of their cloud usage revealed some eye-opening facts.
We laid out a comprehensive FinOps roadmap for them, starting with gaining a holistic visibility into their cloud spending. Ingesting their billing data, we established benchmarks and compared them to the current usage and expenditure, leading to a gap analysis.
This in-depth analysis highlighted the necessary steps to bridge this gap and move towards their ideal state of performance and cost efficiency.
This case study underscores the critical importance of GCP cost optimization. It not only facilitates substantial cost savings but also enables a financially sustainable and efficient cloud environment.
To effectively manage GCP costs, it's important to first understand how GCP pricing works. Pricing is based on a consumption-based model, where businesses pay for the resources they use. The pricing structure can be complex, and it's essential to have a clear understanding of the key components to manage costs effectively.
The three primary components of GCP pricing are storage, network, and data.
By understanding these key components, you can identify areas where they may be overspending and optimize usage.
GCP offers three key pricing models to accommodate varying user requirements: Free Tier, On-Demand, and Long-Term.
The Free Tier allows users to explore GCP services without any upfront cost. It offers limited monthly usage for specific GCP services like Compute Engine, Cloud Storage, and others. Here are some key free tier limits:
Please note, exceeding these limits will incur charges per GCP's standard rates.
This flexible model lets users pay for resources as and when they use them. Users can scale up or down depending on their needs and only pay for the services consumed. This option is ideal for organizations with unpredictable workloads or who need to quickly adapt their resources.
For the General-Purpose Machine Types (C3):
For the C3 Standard Machine Types:
Also known as Committed Use (CUD) and Sustained Use Discounts (SUD), Long-Term Pricing is best suited for users with consistent, long-term resource needs. Users agree to use specific resources for a fixed period (e.g., one or three years) in return for reduced rates.
Committed Use Discounts (CUDs) allow you to commit to a set amount of resources for a specific period of time, in return for a discounted rate.
For example, if you need to run a virtual machine for a year, you can commit to a certain number of CPU and memory resources, and receive a discount for doing so. Discounts range from 20% to 77% for 1 and 3 year commitments respectively.
License pricing with CUDs:
Sustained Use Discounts (SUD) on the other hand, are automatically applied when you use a virtual machine for a certain amount of time each day, over a 30-day period.
The longer you use the machine, the more you save, with discounts ranging from 10% to 90%. This pricing model is ideal for businesses that have predictable resource requirements and need to run virtual machines for extended periods of time.
Understanding these pricing components and models allows businesses to spot areas of potential overspending and optimize their GCP usage
Forecasting GCP costs is a critical aspect of budgeting and resource planning. We've compiled a variety of resources that can assist you in understanding and predicting your GCP expenditure.
To effectively forecast your GCP costs, begin by identifying the most appropriate GCP regions and zones for your needs. Next, delve into our comprehensive pricing catalog and SKU list to find out the services you'll be using.
Finally, use the GCP pricing calculator to estimate your costs based on your chosen instance type, usage, time duration, and discount type. This will provide you with an accurate forecast of your expected GCP expenditure.
Tired of cloud costs that are sky-high? Economize to the rescue!
On average, users save 30% on their cloud bills and enjoy a reduction in engineering efforts. It's like finding money in your couch cushions, but better!
The process of pricing management and cost optimization is time-consuming and labor-intensive, even for experienced FinOps professionals. It can take several months to understand and adapt to a new cloud environment - a delay which might result in significant lost savings.
In response to this challenge, GCP Cost Optimization Tools have emerged as effective solutions, empowering organizations to manage their cloud costs with more efficiency and accuracy.
Cloud cost optimization tools are engineered by FinOps experts to process your billing and usage data, presenting it through comprehensible visualizations and intuitive dashboards. These tools offer an array of benefits:
Taking the complexity out of cloud management, GCP Cost Optimization Tools offer organizations a streamlined and effective way to manage their cloud finances.
Instead of investing time and resources into developing an in-house cloud management team, these tools present an economical and efficient alternative.
Different organizations have varying requirements when it comes to cloud cost management, depending on their size, the complexity of their cloud environments, and the level of granularity and control desired. Recognizing this, a variety of tools have been developed to address diverse needs.
Google Cloud Platform itself offers several tools that can help with cost management. These tools are integrated into the GCP console and provide insights specific to GCP services. Here are some noteworthy ones:
Third-party tools have emerged in the competitive market to offer multi-cloud and hybrid-cloud cost management solutions with user-friendly interfaces.
These tools generally provide a more comprehensive set of features than the native GCP tools, including more advanced analytics, budgeting, and forecasting capabilities.
Open source tools provide a level of transparency and customizability that's unmatched by other types of tools. A list of industry-leading open source tools can be found here.
By understanding your specific requirements and conducting thorough research, you can find the right tool that fits your organization's cloud management needs.
When it comes to selecting a cloud management platform (CMP), it's crucial to align your choice with the unique needs and strategic direction of your organization's cloud journey. Here are some key factors to consider:
The CMP should provide robust cost tracking capabilities to properly attribute cloud expenses to the appropriate business units or departments. This granular cost insight facilitates efficient cost management and informs optimization strategies.
Your tool should seamlessly integrate with your current project management and IT tools, delivering real-time alerts, swift deployment capabilities, and increased cloud environment visibility. Ensure that the chosen tool caters specifically to your cloud platform.
The CMP should be capable of setting up automated alerts for rapid cost spikes, untagged infrastructure, permission failures, or exceeded budget limits. These alerts act as an early warning system to help mitigate unexpected cost overruns.
A top-tier CMP should provide tailored recommendations based on your unique cloud usage patterns. Suggestions regarding underutilized instances, storage inefficiencies, or compute optimizations can lead to significant cost savings over time.
By evaluating these critical factors, you can make an informed decision that will shape the effectiveness of your cloud cost management strategy.
Tired of cloud costs that are sky-high? Economize to the rescue!
On average, users save 30% on their cloud bills and enjoy a reduction in engineering efforts. It's like finding money in your couch cushions, but better!
When it comes to Google Cloud Platform (GCP), there are a myriad of tools and best practices designed to help users optimize their cloud expenditures. By putting these recommended practices into action, you can considerably cut down your cloud expenses, thereby making your resource allocation more efficient.
Bear in mind that achieving cost optimization on the cloud isn't a one-off task but an ongoing journey that demands regular monitoring and tweaking.
Google Cloud Platform Spot VMs are a cost-effective option for running workloads that can tolerate interruptions. They are pre-emptible virtual machines (VMs) that are made available at a discounted price compared to on-demand VMs, in exchange for the possibility of being terminated by GCP with a short notice (30 seconds) when the spot instances are needed by other customers with higher priority.
Some examples of workloads that can benefit from using GCP Spot VMs include:
GCP Active Assist provides real-time guidance and suggestions to help users troubleshoot and optimize their GCP resources. It can help users identify and resolve issues related to performance, cost, security, reliability, manageability and sustainability, GCP calls it “Recommenders”.
It also provides automated remediation actions to help users quickly resolve problems and improve the overall health of their GCP resources through Recommendations Hub. These Recommendations can also be consumed via Recommender API or exported to BigQuery on a scheduled manner.
VM Machine Type Recommender
The VM Machine Type Recommender is one of the most used features. It looks at how VMs have been used in the past to suggest the best machine type for your workload and usage.
Cloud Asset Inventory helps in optimizing resource allocation. It can provide detailed information about the resources in use, such as the resource type, location, and size.
This information can be used to optimize resource allocation by identifying resources that are over or under-allocated, and adjusting them accordingly.
While Cloud Asset Inventory can be a powerful tool for tracking resource changes, there are some limitations to be aware of:
Since GCP offers a large number of services, pricing models, and discount options, we have compiled a few resources to help you learn more about the cost optimization journey. Stay informed, and choose the best tools and services to help you manage your cloud.
Pricing Catalog
View the pricing details of the most commonly used GCP Services.
Pricing Calculator
Get accurate estimates and pricing predictions based on instances, utilization, and time period.
Blog
Learn about cost optimization, and the latest developments in the world of cloud.
Guides
Get an overview of the most used GCP services, their features, pricing, & helpful ways to reduce costs.
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