Cost Optimisation with IaC in Multi-Cloud Setups

Want to cut cloud costs while managing multiple providers? Infrastructure as Code (IaC) can help you automate resource management, enforce policies, and reduce waste across multi-cloud environments. Here's how:

• Automated Resource Management: Rightsizing and dynamic scaling adjust resources based on demand, preventing over-provisioning and idle usage.
• Consistent Tagging: Embedding tags into IaC templates simplifies cost tracking and allocation across providers.
• Policy Enforcement: Automating cost controls ensures efficient resource use and prevents unexpected expenses.
• Tool Selection: Tools like Terraform and Pulumi work across multiple clouds, while CloudFormation and Azure Bicep excel in their specific ecosystems.
• Case Studies: Organisations report savings of 30–43% and improved efficiency through IaC adoption.

IaC turns cloud cost management into a proactive, automated process. With the right tools and practices, you can streamline operations and avoid unnecessary expenses.

IaC Cost Optimisation Methods

Automated Resource Provisioning and Rightsizing

A striking 69% of IT leaders exceeded their cloud budgets in 2023 [3]. This underscores the pressing need for smarter cost management strategies. Infrastructure as Code (IaC) offers a game-changing approach by automating resource provisioning and decommissioning based on actual usage. This eliminates the common pitfalls of over-provisioning and idle resources.

With automated scaling, resources adjust dynamically to match demand, ensuring efficiency during both peak and off-peak periods [2]. IaC also supports rightsizing, which tailors capacity to actual demand instead of overestimating for peak loads. Additionally, it enables the use of cost-effective resources like spot instances or preemptible VMs for workloads that aren’t critical [2].

Take Airbnb as an example. By leveraging AWS services to implement cost-saving measures like rightsizing and improving utilisation rates, they managed to cut storage costs by 27% [3].

Embedding tagging practices into IaC templates further enhances cost allocation, creating a seamless system for tracking and managing expenses.

Consistent Tagging and Cost Allocation

Accurate cost allocation hinges on consistent tagging, especially in multi-cloud environments where different providers have unique tagging rules. Understanding these differences is crucial for developing a tagging strategy that works across platforms.

Strategic tagging does more than just track costs. For example, Alchemy achieved 98% accuracy in cost allocation and reduced cloud expenses by 30% through tagging [5]. Similarly, Vibrent Health cut cloud costs by 43% using a strategic tagging approach [5]. These figures highlight how vital consistent tagging is for controlling expenses.

IaC simplifies this process by embedding tag policies directly into infrastructure templates. This automation ensures every resource is tagged with the necessary metadata, enabling precise cost tracking [4]. Beyond tracking, tagging provides granular data that helps identify inefficiencies and optimise resource usage. This is especially critical given that 54% of companies cite lack of visibility into usage as a major source of wasted cloud spending [6].

When combined with policy automation, tagging becomes a powerful tool for scalable cost management.

Scalability and Policy Enforcement

Building on the foundations of automated resource management and tagging, embedding cost policies directly into IaC workflows takes cost control to the next level. IaC allows organisations to enforce cost-saving measures through Policy as Code, shifting cost management from reactive to proactive [8].

Dynamic scaling policies ensure capacity adjusts in real time, reducing operational overhead [2]. Additionally, automating resource scheduling for non-production environments - like development and testing - can lead to immediate savings. For instance, these environments can be programmed to power down during off-hours and restart when needed, ensuring resources are only used when necessary [2].

With IaC, every line of code becomes a lever for both innovation and efficiency. - Naveen [8]

IaC also supports embedding security and compliance policies into pipelines, catching misconfigurations before deployment. This not only reduces remediation costs but also helps avoid security breaches [2].

A modular approach to IaC design further boosts cost efficiency. At FIS, reusable Terraform modules for components like VPCs, IAM roles, and EC2 instances reduced redundancy by half and improved infrastructure maintainability [7]. This approach saves development time and ensures consistent, cost-efficient configurations across various deployments.

Looking ahead, machine learning is poised to revolutionise policy enforcement. At Woolworths, machine learning models were used to analyse infrastructure usage patterns, enabling predictive scaling and resource optimisation based on historical data [7]. This integration of AI into IaC workflows signals a new era of smarter, more efficient cloud management.

IaC Tools Comparison for Multi-Cloud Cost Optimisation

Leading IaC Tools Comparison

Managing cloud costs across multi-cloud environments requires the right Infrastructure as Code (IaC) tools. These tools not only simplify deployment but also help enforce cost controls. With the IaC market expected to hit US$3.3 billion by 2025 [15] and 89% of large companies adopting multi-cloud strategies [14], choosing the right tools is more important than ever. Below is a breakdown of popular IaC tools to help streamline cost optimisation in multi-cloud setups.

Terraform is a top choice for multi-cloud deployments. Its HashiCorp Configuration Language (HCL) supports all major cloud providers, making it ideal for organisations managing resources across AWS, Azure, and Google Cloud. Terraform uses state files to track infrastructure changes precisely and integrates with policy enforcement tools like Sentinel and Open Policy Agent (OPA), helping organisations control costs effectively [11].

Pulumi, on the other hand, stands out for supporting multiple programming languages such as Python, TypeScript, Go, C#, Java, and YAML. This flexibility allows development teams to use familiar coding skills while implementing cost-saving logic, including loops, conditions, and functions. Pulumi also offers built-in encryption for secrets and strong testing capabilities, including unit, property, and integration tests. This combination of features makes it particularly appealing for organisations focused on both security and cost management [11].

For AWS-centric environments, CloudFormation integrates deeply within the AWS ecosystem. Ori Yemini, CTO & Co-Founder at ControlMonkey, highlights its strengths:

AWS CloudFormation is a powerful tool for cost optimisation in cloud environments. Organisations can reduce unnecessary expenses, maintain governance, and ensure predictable cloud spending by automating resource lifecycle management, enforcing version control, utilising CloudFormation Hooks for cost tracking. [9]

CloudFormation automates resource lifecycle management, helping to prevent over-provisioning. For example, it can schedule resources to shut down during off-peak hours, reducing waste [9]. It also leverages AWS-specific cost-saving features like Graviton-powered instances, which deliver up to 40% better price performance [10], and EC2 Spot Instances, which provide up to 90% discounts for fault-tolerant workloads [10].

Azure Bicep is designed for Azure environments, offering a domain-specific language that simplifies Azure Resource Manager templates. While it lacks multi-cloud support, it excels at leveraging Azure-specific cost optimisation features and integrates seamlessly with Azure Key Vault for secret management [11][12]. These features make it a strong choice for organisations committed to Azure.

Selecting the right IaC tool is crucial for optimising costs in multi-cloud environments. Features like automated cost estimation provide much-needed financial clarity. Standardising on fewer tools simplifies management and reduces complexity [1]. For organisations needing multi-cloud flexibility, Terraform and Pulumi offer strong support across providers, while CloudFormation and Bicep are excellent within their respective ecosystems.

One real-world example is VARNER, a company striving to become a leading data- and tech-driven fashion enterprise. VARNER leverages Spacelift to deliver flexible IaC solutions that meet its goals while maintaining competitive costs [13].

Case Studies and Research Data

Documented Cost Savings with IaC

Implementing Infrastructure as Code (IaC) in multi-cloud setups has proven to drive significant cost savings for businesses across various industries.

Take Teradata, for example. By leveraging Cisco Multicloud Defense, the company managed to cut infrastructure costs by 35% while slashing provisioning time by half. Dr. Stacy Lanier, Director of Cloud Engineering at Teradata, highlighted the transformative impact of this approach:

Cisco enables us to do in minutes what previously took hours. When you multiply the many tasks to update gateways, change rules, and support new customers, Cisco Multicloud Defense has the potential to save Teradata in terms of both dollars and hours. [16]

Other industries showcase similar success stories. A healthcare provider in the United States reduced cloud expenses by 27% and cut manual cost management time by 70%, leading to potential monthly savings exceeding £30,000 [17]. A SaaS provider based in Ontario, Canada, reported monthly cloud savings of 32% alongside a 50% improvement in forecasting accuracy [17]. Meanwhile, a US defence organisation in Virginia saw a 22% immediate reduction in cloud costs and a 65% decrease in manual compliance reporting efforts [17].

Energy companies are also reaping the rewards of IaC. A renewable energy provider in the UK reduced cloud costs by 27% and minimised manual tasks by 55% [17]. Similarly, a global energy firm reported monthly savings exceeding €50,000 through automation initiatives [17][20]. Government agencies are no exception; a US federal agency achieved a 24% reduction in annual cloud expenditure, cut manual reporting time by 60%, and improved compliance via automated monitoring [17].

These examples highlight the real-world financial advantages of IaC adoption. Beyond saving money, these strategies lay the groundwork for enhanced automation, driving even greater efficiency in multi-cloud environments.

Automation Impact on Multi-Cloud Efficiency

The benefits of automation extend beyond cost savings, delivering remarkable improvements in operational efficiency within multi-cloud ecosystems. Organisations that embrace IaC automation report significant gains in deployment speed, resource utilisation, and cost management.

For instance, automated deployments are 31 times faster, reducing deployment times by an impressive 92% [18]. Provisioning times have also plummeted, dropping from an average of 45 hours to just 1.8 hours - a 96% reduction [18].

Resource utilisation has seen a dramatic boost as well. Standardised provisioning through IaC has improved resource utilisation by 73% [18]. Automated cleanup processes recover an average of 34% of unused resources daily, translating to annual savings of around £1.6 million for large enterprises. These measures have led to a 68% reduction in cloud waste and a 42% drop in overprovisioning incidents [18].

Reliability has also improved significantly. Companies using DevOps infrastructure automation achieve a deployment success rate of 98.5%, compared to just 68% with traditional methods. Configuration errors have decreased by 94%, and environment-related deployment failures are down by 92% [18].

Specific examples further illustrate these gains. A leading automotive manufacturer reduced cloud spending by 30% through better resource allocation based on usage data. Meanwhile, Company X enhanced operational efficiency by 35% after adopting a multi-vendor cloud approach with AWS and Azure, saving approximately £150,000 annually [19].

The cumulative impact of these advancements is substantial. Organisations that implement automated resource management strategies report a 57% reduction in infrastructure costs by optimising capacity planning and enabling dynamic scaling. Incident resolution times have dropped dramatically from 6.2 hours to under one hour, improving both cost efficiency and operational resilience [18].

Shifting Infrastructure Cost Left with Hassan Khajeh-Hosseini

Multi-Cloud IaC Cost Optimisation Best Practices

Using Infrastructure as Code (IaC) effectively can significantly improve cost management in multi-cloud setups.

Continuous Monitoring and Regular Audits

To keep cloud expenses under control, continuous monitoring and regular audits are essential. Studies show that up to 30% of cloud spending is wasted on idle or underused resources [24], while 69% of IT leaders exceeded their cloud budgets in 2023 [3]. Setting a consistent audit schedule - whether monthly or biweekly - and integrating the results into dashboards can help organisations maintain visibility over their spending.

Tools like AWS Cost Explorer and SolarWinds® Observability SaaS can automate much of this monitoring process. By setting budgets (monthly or quarterly) for specific projects, environments, or business units, and configuring alerts for anomalies - such as unexpected spikes in data transfer or compute usage - you can quickly address inefficiencies.

Real-world examples show the value of such practices. For instance, Salesforce used CloudHealth by VMware to gain detailed insights into its multi-cloud expenses, leading to better cost management and operational improvements [3].

A multi-cloud approach requires deep collaboration. Technologists should work with their business counterparts to design and implement effective cloud strategies, with business needs dictating the architecture and capabilities. – Arvind Joshi, CFO and COO at JP Morgan Chase [3]

Monitoring efforts should focus on identifying idle or orphaned resources, which are often overlooked but can significantly drive up costs. These findings can help address misconfigurations, unnecessary spending, or wasteful practices, creating a feedback loop that informs better architecture, rightsizing, and governance decisions [24].

Cloud-Native Architecture Adoption

Beyond monitoring, adopting a cloud-native architecture can take cost efficiency to the next level. Cloud-native applications, often built using microservices and following the twelve-factor application methodology [23], are designed to scale efficiently and adapt to changing demands. By prioritising an API-driven design, these applications enable better resource utilisation through decoupled services.

Providing teams with self-service agile infrastructure ensures resources can be scaled up or down as needed, avoiding waste associated with static provisioning [23]. When paired with fault-tolerant applications and automated recovery systems, this approach maximises the benefits of auto-scaling. Multi-cloud auto-scalers can dynamically adjust resources without compromising performance, ensuring demand is met without overspending [22]. Heat maps can also be used to visualise demand patterns, making it easier to identify and shut down underused resources during low-demand periods [23].

Cross-Provider Instance Usage Planning

Once monitoring and architecture are optimised, planning across cloud providers can further reduce costs. This starts with understanding the unique pricing models and discount options offered by each platform. For example, Reserved Instances can reduce EC2 costs by around 30%, while Spot Instances can deliver savings of up to 90% compared to On-Demand pricing [25]. In one test by CAST AI, applying their Spot Instance policy reduced the compute cost of running a demo app to just £65.01, a 90% saving compared to an unoptimised setup [21].

To maximise savings, organisations should regularly assess usage patterns to identify instances that are consistently in use and suitable for reserved pricing. Selecting the right instance sizes and types for specific workloads and committing to appropriate reservation plans can yield substantial savings [22].

Reducing data transfer costs is another key area for savings. This involves comparing vendor fees and evaluating charges across providers [22]. Similarly, optimising storage by removing unused resources and deactivating unnecessary assets during low-demand periods can lead to substantial reductions. For example, Lucidity’s block storage auto-scaler has achieved storage savings of up to 70% [22].

Handling interruptions with Spot Instances requires automation [21]. Building systems that can gracefully manage instance terminations ensures organisations can fully leverage cost-saving opportunities without compromising reliability.

Hokstad Consulting provides expert cloud cost engineering services, helping organisations reduce expenses by 30–50% through effective IaC practices.

Conclusion: IaC Cost Savings in Multi-Cloud Setups

Infrastructure as Code (IaC) offers a practical way to manage multi-cloud environments while keeping costs under control and enhancing overall performance.

With automated resource management, IaC helps eliminate waste by ensuring resources are appropriately sized and offering detailed cost insights through tagging systems [2]. These benefits are further validated by real-world examples.

Case studies reveal organisations achieving cost reductions of 30–43%, along with better resource allocation. This aligns with a growing trend as businesses turn to IaC to tackle rising cloud expenses, especially with predictions that cloud spending could exceed £1 trillion by the end of the decade [26].

Beyond immediate savings, IaC’s version control and auditing features bring long-term value. By documenting every change, organisations can track inefficiencies, spot recurring issues, and promote team accountability. This approach supports ongoing improvements and delivers cumulative savings over time [2]. When combined with effective version control, these practices pave the way for strategic enhancements.

Expertise from firms like Hokstad Consulting can amplify these benefits. Their support has helped clients achieve savings of 30–50%, cut deployment times from 6 hours to just 20 minutes, and reduce annual costs by £120,000 [27].

Techniques such as automated scheduling, rightsizing, and using cost-efficient options like spot instances turn cloud spending into a manageable, scalable investment that aligns with business growth.

As multi-cloud adoption becomes the norm, organisations that embrace IaC for cost optimisation will gain a clear edge, benefiting from efficient resource use and predictable infrastructure costs.

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