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Reduce TCO with Cloud Cost Optimization

Cloud optimization can help you maximize the value of your cloud investments by improving performance and efficiency while reducing the total cost of operations (TCO).

Cloud Cost Optimization

  • Organizations face rising cloud costs and other infrastructure challenges that can be mitigated through cloud optimization

  • Cloud optimization can help to reduce costs while improving workload performance

  • Cloud cost management can be achieved within a cross-disciplinary cloud FinOps framework

  • Intel can help organizations update their compute infrastructure with cloud optimization technologies and tools



Understand the Need for Cloud Optimization

Businesses are striving to remain competitive and meet rising customer expectations while pivoting to address new challenges, including worker shortages, supply chain interruptions, and increasingly sophisticated cyberthreats. As companies implement solutions to address these needs, it can put unprecedented demands on a business’s IT infrastructure, which may not be equipped to support new use cases and workloads at scale.

The burden on IT infrastructure will only continue to grow, with increased reliance on AI-enabled capabilities with ever-increasing dataset sizes, the need for more robust security features, overall application complexity, and burgeoning data density.

To achieve higher performance and greater flexibility, organizations worldwide have migrated complex workloads to the cloud.

However, a cloud-first strategy can pose its own challenges. Cloud migrations often lead to unexpected cost overruns, causing enormous frustration and potentially thwarting the goals of the entire organization. In fact, optimizing cloud costs post-migration was cited as a top cloud-related challenge by 39 percent of survey respondents in a 2024 State of the Cloud report by Flexera, and 59 percent of respondents reported that cloud cost optimization was a priority.1

Common causes of cloud cost overruns are associated with misallocation of resources, either through overprovisioning or underprovisioning.

  • With overprovisioning, an organization does not utilize all the compute power available in their cloud infrastructure. Money is wasted because the cloud contract includes unneeded cores or hardware features that are not being used or optimized.
  • Underprovisioning can lead to poor cloud performance, as workloads are assigned to hardware that doesn’t support their needs. Resource shortfalls can hamper productivity, damage customer relationships, weaken security protections, and jeopardize regulatory compliance. To prevent service failures, companies may need to pay a premium to bring supplementary resources online until the contract can be renegotiated.

It is possible to overcome many of these challenges through cloud optimization—the process of rightsizing an organization’s cloud infrastructure to run all workloads at peak performance and efficiency—and ongoing cloud cost management.

However, it is important to know that cloud optimization alone may not fully compensate for shortcomings caused by outdated technology in the data center or give you full flexibility to control workload placement over its life cycle. Optimization and modernization of your entire IT infrastructure can result in significant cost savings while helping to increase your organization’s efficiency and hone its competitive edge.

Design a Cloud Optimization Strategy

Several approaches to cloud optimization can be used independently or in combination at any time to achieve your specific goals and desired outcomes. Optimization is not a onetime effort and should be an integral part of a continuous improvement plan.

Boost ROI with Cloud Optimization Tools

Cloud optimization can yield tremendous cost savings, efficiencies, and performance improvements at any stage of the cloud journey, from premigration planning to maintenance and growth of mature cloud infrastructure. It can also help you assess workload placement and the effectiveness of your choices.

  1. To begin the optimization process: First, conduct a cloud technology audit that analyzes your key business objectives and matches them to applications and workloads. Examine the technology and capacity requirements to support today’s workloads and users and consider potential future needs.
  2. Next: Employ purpose-built cloud optimization tools to conduct a thorough evaluation and analysis of your cloud computing operations to inform your cloud cost management strategy or, in some cases, to automatically optimize your cloud deployments.

    Consider one or more of the following cloud tools based on your organization’s plans and progress in the cloud journey:

    • Premigration discovery and planning is a critical step that begins with an assessment of an organization’s objectives and the key requirements for all cloud deployments, workloads, and users.

      Dr Migrate by LAB3 provides an AI-enabled framework that helps to simplify cloud migrations with a comprehensive migration plan. The plan is based on an automated analysis of all requirements for applications, workloads, connections, and resources needed to support the organization’s goals.

    • Midmigration efficiency relies on infrastructure optimizations. Intel® Cloud Optimizer by Densify analyzes an organization’s range of cloud workloads automatically via machine learning to match workloads with platform and service combinations that provide the best fit.

      Intel® Cloud Optimizer supports cloud cost management with ongoing recommendations for the best fit between workloads and instance types to help improve the cost-effectiveness for each instance and vendor contracts overall.

    • Ongoing optimization of cloud infrastructure can be achieved automatically with Intel® Granulate software, an AI-enabled, automated solution that helps to enhance performance and reduce latency in cloud deployments.

      For example, Coralogix, a SaaS log analytics company, optimized its cloud infrastructure with Granulate, resulting in a 30 percent reduction in processing time and overall savings of 45 percent on the company’s cloud computing costs.2

You can learn more about these and other Intel® cloud tools and technologies in our article, Cloud Computing Tools for Optimization and Management. Additionally, you can read more about the benefits of cloud optimization tools in our whitepaper, “How to Get the Most Out of Your Cloud Without the Expense.”

To build optimization directly into your cloud solutions, explore our Intel® Optimization Hub for workload-specific software builds, open source libraries and drivers, recipes, and benchmarks—all tuned for Intel® hardware and cloud accelerators. This valuable resource can help to match cloud instances or containers to current and future needs.

Choose Cloud Instances for the Best Fit

Major cloud service providers (CSPs) can have hundreds of instance types. While the instances may seem similar in their descriptions, the choice of underlying hardware can greatly impact the cloud infrastructure’s performance and cost-effectiveness. Careful research, supported by optimization tools, can help you choose the best instance for each workload.

For example, Gunpowder, a leading digital visual effects (VFX) service and technology provider, improved their cost per performance by up to 52 percent on rendering benchmarks in Google Cloud with cloud instances based on 4th Gen Intel® Xeon® Scalable processors, compared to instances that featured earlier generations.3

Support Strategic Goals with Cloud FinOps

Cloud operational management is often decentralized, with cloud service choices being made without higher-level coordination or oversight. This can result in over or underprovisioning, duplication of services, vendor conflicts, and significant cost overruns.

To optimize performance and cost across your entire organization’s cloud engagements, consider adopting an interdisciplinary cloud FinOps framework. FinOps teams include leaders from DevOps, IT, and finance who share goals and responsibilities for all aspects of cloud management, including cloud policies and standards, and consolidate decision-making across the entire organization.

Choose a Common Infrastructure Architecture to Enhance Flexibility

The cloud is prized for its flexibility, but it’s surprisingly easy to get locked into a restrictive vendor contract or proprietary cloud platform that can limit future portability and scalability.

For example, many organizations begin a cloud journey with the intention of moving the entire IT operation to the public cloud, only to discover that some workloads must remain in the on-premises data center or private cloud to comply with regulatory requirements, enhance data security, or to improve performance of key workloads. If the public cloud and private cloud platforms are not compatible, the migration or repatriation processes could be held up while business-critical applications are refactored or replaced.

Ensuring your cloud and data center infrastructure use a common architecture based on modern platforms and technologies can simplify the transition to hybrid cloud or multicloud models that are inherently flexible and highly scalable.

For example, on-premises data and applications can be combined more easily with optimized, leading-edge cloud implementations, simplifying governance and data analytics across an organization. Further, a modern, optimized infrastructure can be ready to scale when it’s time to add new data sources, applications, and users.

Achieve Greater Gains with Data Center Modernization

As you gain greater insight into the underlying hardware of your cloud instances and look to move to a common architecture, a similar optimization evaluation of your data center can help maximize the value of your investments from a cost, performance, and efficiency standpoint.

Data center modernization—specifically, updating or replacing outdated technologies—can improve the efficiency and cost-effectiveness of IT infrastructure, enable you to take advantage of the latest security and sustainability capabilities, and ready your organization to adopt increasingly advanced applications and use cases. These benefits and a flexible, modern infrastructure are critical for any business looking to adopt or integrate AI throughout their organization.

Partner with Intel

Cloud optimization can help organizations to succeed and grow efficiently while reducing operational costs and should be done on a recurring basis. Supported by a FinOps-inspired framework, ongoing optimizations enhance the flexibility and scalability of IT operations.

Optimization strategies should also extend to the data center to establish a common architecture across the entire IT infrastructure. Update data center hardware to support innovation and scalability and to enable a smooth transition to hybrid cloud environments.

Intel, together with our broad partner ecosystem, offers an unmatched array of technologies, tools, reference libraries, and market ready solutions to help you successfully address cloud optimization, cloud cost management, and data center modernization to reduce costs and achieve your strategic business objectives.

To get started, sign up for instant access to our Intel® Xeon® Processor Advisor Suite to find product and solution recommendations for specific workloads, use cases, and configurations and to access TCO and ROI calculators and the latest Intel® Xeon® processor specifications and benchmarks.