More than 3 in 4 companies estimate that 21-50% of their cloud spend is wasted, according to the State of Cloud Usage Optimisation 2024 report by Stacklet. This is costing businesses billions of pounds in monthly expenses for services they’re not using.
The report further stated that the causes behind this wastage were most commonly manual processes, inadequate policy enforcement, and the growing influence of AI. Despite these challenges, cloud hosting service providers from all cloud segments are looking at double-digit growth in 2025, according to Gartner. To put it simply, as cloud costs are rising, preventable mistakes are leading to waste and are hurting organisational budgets.
This urgently calls for optimising cloud costs to reduce wastage and prevent losses. In this blog, we’ll help you understand the cloud cost challenges and learn how you can optimise your cloud costs with BlackBox Hosting.
Understanding Cloud Cost Challenges
Before taking the next step to lower and manage your cloud costs, you need to first understand the challenges organisations face with cloud costs.
Complex Billing
Some cloud hosting service providers have complex billing, which you might just leave to your finance team to interpret. But your cloud bills need to be simple to understand, with terms that are flexible enough to incorporate scaling up of resources.
The best cloud hosting platform is one that follows fixed and transparent billing practices, without any hidden costs. You also want to ensure you’re only paying for what you’re using.
Limited Visibility into Cloud Spends
Limited visibility into spending is another key challenge that organisations face in managing cloud costs. This could be due to:
- A lack of the right tools to manage cloud spending.
- Finding hidden costs, like costs related to data transfer, API calls, or extended storage that catch your business off guard.
- Being unable to interpret costs the right way, and end up spending more than they need.
Inaccurate Budget Forecasts
Forecasting cloud expenses can be tricky, with many cloud hosts in the market promising to optimise cloud costs.
Inaccurate budget forecasts can harm your cloud cost management. If you’re under budget, you may jeopardise an active application, while being over budget means you might be paying for what you may not use.
Inefficient Resource Storage
Idle and underutilised resources and the lack of auto-scaling mechanisms can inflate your expenses without delivering tangible value. Your organisation needs to optimise the use of resources and keep them in line with the actual demand to lower your cloud spend.
Don’t let these cloud cost challenges hamper your business operations. Once you have a clearer idea of what cloud cost optimisation is, you’ll be able to turn the tide in your favour and save more money.
What is Cloud Cost Optimisation?
In simple terms, cloud cost optimisation is a process that aims to make cloud infrastructure and management more efficient, less complex, and, in turn, less expensive. With this process, you reduce the overall costs of cloud computing services while maintaining performance.
Some of the best practices include:
Setting Budgets
Collaborate with your IT and finance departments to fully understand your cloud billing and usage patterns while setting cloud budgets.
Reviewing Pricing and Billing Information
Fully understand the charges for storage, computing, and value-added services like database services, which usually take up the bulk of the costs. Use cost management and heat-mapping tools to understand demand and usage trends better.
Opting for Savings Plans
Opt for plans that benefit your organisation in the long term and come without any hidden surprises. You can also make the most of discount programmes like reserved instances, spot instances, and volume discounts offered by some cloud hosts to optimise cloud costs.
Limiting Data Transfer Fees
Many cloud hosting service providers charge businesses to migrate data through data transfer fees. They may also charge them for data ingress (data coming into the cloud) and data egress (data moving out of the cloud), with data egress typically incurring higher costs. Avoid these costs, as they can quickly add up.
As cloud computing costs soar, businesses need to get more value from their cloud investments than ever. This is where BlackBox Hosting comes in, offering an effective solution to optimise your cloud costs without compromising on performance, scalability, and usage.
How BlackBox Hosting Can Optimise Your Cloud Costs
Knowing what you’re paying for holds the key to optimising cloud costs. So when you partner with BlackBox Hosting, you’re signing up for predictable costs and a fixed, straightforward, and transparent billing process, without any hidden expenses.
Here are two key illustrations that explain why we’re among the best cloud hosting platforms to optimise your cloud costs:
Cost and Performance Benchmarking with Popular Public Clouds
BlackBox Hosting vs AWS
We used the publicly available TPROC-C HammerDB benchmark tool for a performance analysis of Microsoft SQL workloads on a c5.xlarge AWS EC2 instance against a comparable BlackBox Hosting Standard Single Server.
AWS cost for a year: £2,806.44, with standard support and additional charges for bandwidth and storage transaction data.
BlackBox Hosting cost for a year: £1392.24 with support, unlimited bandwidth, and storage for transaction data.
Your gains with BlackBox: 50% savings in costs and almost 47% increased performance.
BlackBox Hosting vs Azure
We used the publicly available TPROC-C HammerDB benchmark tool to conduct performance analysis for Microsoft SQL workloads on a Microsoft Azure Standard F4s v2 VM against a comparable BlackBox Hosting Standard Single Server.
Azure cost for a year: £2,462.64 with standard support, with additional charges for bandwidth and storage transaction data.
BlackBox Hosting cost for a year: £1392.24 with support, unlimited bandwidth, and storage transaction data.
Your gains with BlackBox: 43% savings in costs and over 75% increased performance.
Our Client Success Story: Gemstone
Gemstone, a SaaS specialising in mobile apps and data engineering, was struggling with scaling up its resources amid high public cloud costs. On partnering with us, they received easily scalable servers, without data migration hassles, at fixed, predictable costs.
The result? Not only did Gemstone gain a significant rise in performance, but they also greatly reduced their cloud spend and kept their cloud budget under control.
Read the complete case study here.
Partner with BlackBox Hosting Today
BlackBox Hosting is a cloud infrastructure service provider offering private cloud hosting, remote desktop services, application publishing, co-location services, and DRaaS and BaaS. We don’t just offer rack space; we help businesses streamline their cloud investment and optimise cloud costs.
Call us on +44(0)203 740 7840 or contact us to partner with a leading managed cloud provider and save more on your cloud costs.
