3 Emerging Cloud Cost Optimization Trends Among MSPs

Finding ways to save money − for both themselves and their customers − has always been a priority for managed service providers. But as 2024 gets underway, I'm noticing some new cost-savings trends on the part of MSPs — particularly, ones related to cloud services and infrastructure. Smart MSPs would do well to follow these trends as a means of bolstering their own businesses.

Ecosystem Developments

Here's a look at three of the major developments I'm observing at the intersection of the MSP ecosystem and cloud cost control.

Doubling-down on serverless computing to save money. Serverless computing, which makes it possible to run workloads without having to provision or manage the cloud infrastructure that hosts them, has long been available from all the major public cloud vendors via services such as AWS Lambda and Azure Functions.

Serverless has become especially attractive lately thanks to the unveiling of new types of serverless cloud services, such as OpenSearch Serverless and ElastiCache Serverless, which Amazon debuted over the past year.

By taking advantage of serverless options such as these, MSPs who use cloud services to deliver their offerings to clients are saving money. First, they avoid having to pay for infrastructure they don't need. With serverless, cloud customers pay only for the infrastructure their workloads consume, and there is virtually no risk of resources sitting idle during quiet periods.

Second, serverless can help reduce cloud costs for MSPs because it's easier to administer. It eliminates the need for MSPs to provision, patch or back-up infrastructure. This advantage translates to less staff time spent managing serverless environments. 

Going all-in on multicloud and hybrid cloud. Like serverless, multicloud (which means using more than one cloud platform at once) and hybrid cloud (the use of public cloud resources alongside private infrastructure) have been common practices for years. But MSPs looking to save money on cloud costs are embracing them in new ways that unlock greater value.

For one, they're building tighter integrations between clouds. Whereas in the past multicloud often simply meant hosting some workloads in, say, AWS, and others in Azure without any real connection between them, I'm increasingly seeing MSPs who link workloads in one cloud to those in another. They might host applications on AWS and connect them to data stored in Azure Blob Storage, for instance.

This approach makes it possible to approach multicloud in a more flexible way, which can help to maximize cost savings. Rather than having to run redundant types of resources in each cloud, MSPs are interlinking their clouds to optimize efficiency.

Another trending strategy that can help MSPs save money is licensing reuse or consolidation. Consider, for instance, an MSP that owns Windows licenses for on-prem servers, but that wants to move to a hybrid cloud model by expanding its footprint in Azure. It's possible (albeit not simple) to repurpose the licenses for use with Azure-based VMs instead of on-prem servers — a move that, in most cases, would prove much more cost-effective than purchasing brand-new licenses for cloud servers. 

GreenOps as a way to increase MSP revenue. GreenOps is a practice that helps businesses enhance the environmental sustainability of their cloud infrastructure. In an environment where businesses face increased pressure to be good stewards of the environment, GreenOps is a compelling proposition for many of the clients MSPs serve.

However, determining which cloud infrastructure will yield the greatest sustainability outcomes can be a tough task. Cloud providers aren't especially transparent about where the energy for particular data centers comes from. Nor do they directly report metrics such as how much carbon is emitted by a workload hosted on their platforms.

This opaqueness surrounding GreenOps and cloud sustainability creates an opportunity for MSPs. MSPs can do the hard work of determining which cloud architectures and data centers will deliver the best trade-off between sustainability and performance for a particular customer, while also generating sustainability metrics that the customer can use to prove its commitment to environmental stewardship.

The result is a sort of GreenOps-as-a-service solution, which MSPs can deliver to help their clients meet sustainability goals in a simplified way. In turn, MSPs can grow their revenue by offering a new type of solution that sets them apart from competitors. This approach to GreenOps doesn't directly reduce MSPs' cloud bills in a financial sense, but it does grow their revenue, while also reducing the "carbon cost" of their clients' cloud infrastructure.

Conclusion

Admittedly, the cloud cost saving trends I've described above reflect my anecdotal experiences. I don't have data to prove that these are the most popular strategies MSPs are adopting to reduce cloud spending.

But since helping MSPs with their cloud cost strategies is what I focus on day in and day out, I like to think I have a pretty good sense of which practices are most effective in cutting cloud costs — and right now, those seem to be serverless, new approaches to multi- and hybrid cloud and GreenOps.