Cost Considerations

In the previous chapter, you learned about operational excellence and the use of automation to optimize post-production operations, resulting in reduced human error, increased efficiency, and, ultimately, cost savings. Optimizing the cost of your architecture is a vital aspect of maintaining an efficient and sustainable IT environment. This involves understanding and managing the resources that your applications consume and ensuring that you’re only paying for what you need. In this chapter, we’ll explore various strategies for cost optimization, including right-sizing resources, selecting appropriate pricing models, and utilizing budgeting and cost management tools.

One of the primary goals of any business is to increase profitability while serving customers. Cost is a crucial topic of discussion when a project is initiated. Application upgrades and the addition of new product features heavily depend on the funding available. The product’...

Design principles for cost optimization

Cost optimization includes increasing business value and minimizing risk while reducing business costs. It would be best if you planned your application costs by estimating the budget and forecasting expenditure. To realize cost savings, you need to implement a cost optimization plan and closely monitor your expenditures.

There are several principles that can help you achieve cost optimization; common design principles for this are covered in the following sections. You will find that all cost optimization design principles are closely related and complement each other. Let’s have a look at these.

Calculating the total cost of ownership

Often, organizations tend to overlook the total cost of ownership (TCO) and decide based on the upfront cost to acquire software and services, known as capital expenditure (CapEx). While the upfront cost determination is essential, the TCO matters the most in the long run. The TCO includes...

Understanding techniques for cost optimization

Enterprises are investing more in technology to gain a competitive edge and keep up with rapid growth. With economic instability, cost optimization becomes an essential but challenging task. Companies spend a lot of time researching and reducing costs in procurement, operations, and vendors. Many companies even share data centers, call centers, and workspaces as a cost-saving method. Sometimes, organizations need more time to upgrade to avoid buying new, expensive hardware.

An organization can save more by looking into its IT architecture across the organization. Improving existing architecture can open doors to bring more opportunities and business to the company, even if it requires a bit of adjustment to the budget. Let’s identify focus areas where companies can save money and gain more revenue with techniques such as moving to the cloud, simplified architecture, virtualization, and shared resources.

Reducing architectural...

Driving cost optimization in the public cloud

Public clouds, such as AWS, Microsoft Azure, and GCP, provide excellent cost optimization with a pay-as-you-go model. This model allows customers to trade CapEx for variable expenses, paying for IT resources as they consume them. OpEx is usually lower due to economies of scale. It can be cost-effective to be in the cloud and benefit from continued price reductions that occur over time. The other advantage is that you get additional tools and functionality out of the box with a cloud provider such as AWS, which helps you achieve better agility.

You need a different mindset when defining the cloud cost structure model, as it differs from traditional cost models, which most enterprises have been following for decades. You have all the infrastructure available at your fingertips in the cloud, which requires greater control and regulation. Clouds provide several tools for cost governance and regularization. For example, in AWS, you can...

Green IT and its influence on cost considerations

Green IT, also known as green computing, refers to environmentally sustainable computing or IT. It is the study and practice of using computers and IT resources in a more efficient and environmentally sustainable way. Green IT practices can significantly influence cost considerations in several ways:

• Energy efficiency: Utilizing energy-efficient hardware and practices can reduce the power consumption of data centers and IT infrastructure, leading to substantial savings in electricity costs. For example, using Energy Star-rated equipment or optimizing data center layouts for cooling can lower energy bills.
• Virtualization: Virtualizing servers and storage can lead to a reduction in physical hardware needs. This reduces energy consumption and costs associated with cooling and minimizes the space required for data centers.
• Cloud computing: Moving to cloud services can be more energy-efficient than maintaining on...

Summary

Cost optimization is a continuous effort from application inception (from proof of concept to implementation and post-production). You need to review architecture and cost-saving efforts continuously.

In this chapter, you learned about the various design principles to optimize costs. Before making any purchase decision, you should consider the total cost of ownership for the entire software or hardware life cycle. Budget planning and tracking forecasts help you to stay on the cost optimization path. Always keep track of your expenditures and look for possible opportunities for continuous cost optimization by managing demand without affecting the user experience or business value.

You learned about various cost optimization techniques, including reducing architectural complexity by simplifying enterprise architecture and setting a standard that everyone can follow. It’s recommended to avoid duplication by identifying and consolidating idle and repeated resources...