Optimization Tips

What Are Cloud Policies?

Cloud policies are the guidelines under which companies operate in the cloud. Often implemented in order to ensure the integrity and privacy of company-owned information, cloud policies can also be used for financial management, cost optimization, performance management, and network security.

Cloud computing offers companies a number of advantages including low costs, high performance, and the quick delivery of services. However, without the implementation and enforcement of cloud policies, companies can be exposed to the risks of data loss, spiraling costs, and underperforming assets.

The cloud is not inherently insecure

With regard to the risk of data loss, the cloud is not inherently insecure. Cloud service providers build their platforms focusing more on security and governance than companies who build on-premises IT infrastructures that are protected by a firewall. It is the way the cloud is used that often creates an issue, with developers sometimes failing to take the appropriate precautions when deploying resources.

Company’s should take advantage of cloud service providers´ tools to encrypt data and control who has access to it, and to implement cloud policies that address the issue of inappropriately-protected deployments. To ensure these policies are enforced, companies can use cloud management platforms that collect and analyze logs and create audit trails in order to identify and correct policy violations.

Cloud policies for financial management

Cloud policies for financial management not only help control operational budgets and monitor cost trends, but can be useful in identifying sudden increases in cloud spend that could be indicators of a bigger security problem—for example hackers obtaining login credentials and launching Virtual Machines on the company’s cloud account that are then used for cryptocurrency mining.

Several security reports have claimed “crypto-jacking” is catching up with ransomware as a preferred attack vector. Although the consequences of cryptocurrency mining malware are not as instantly devastating as ransomware, the long term costs can be far greater. Cloud policies for financial management can identify unexpected increases in costs due to unauthorized CPU or bandwidth usage.

Additionally, establishing a Cloud Financial Management practice can also help cost optimization process. Cloud Financial Management (CFM), also known as FinOps or Cloud Cost Management, is a function that helps align and develop financial goals, drive a cost-conscious culture, establish guardrails to meet financial targets, and gain greater business efficiencies. Learn more about establishing a Cloud Financial Management practice here.

Cost optimization cloud policies

In recent years there has been a growth in software solutions for optimizing cloud costs. These are available from cloud service providers or—if your business operates in a multi-cloud or hybrid cloud environment—third party software solutions are available from multiple vendors. These solutions often have the capability to apply cost optimization cloud policies to assets across multiple platforms.

What some software solutions lack is the capability to manage Reserved Instances, Reserved VM Instances and Committed Use discounts. The benefit of being able to apply cloud policies to Reserved Instances is that you will be able to identify when cost savings can be made by purchasing more Reserved Instances, or when your existing Reserved Instance purchases are not being fully utilized.

Cloud policies for performance management

Cloud policies for performance management enable you to specify performance thresholds for Virtual Machines and storage volumes so you can monitor for underutilized and overutilized assets. Underutilized Virtual Machines and storage volumes should be downgraded for cost efficiency, while overutilized assets should be upgraded to avoid performance headaches.

It is important to remember the application of cloud policies for performance management will affect the policies put in place for financial management and cost optimization. For example, if you upgrade assets to increase their performance, this will have an impact on operational budgets and cost optimization. If you downgrade assets, the reverse will apply.

Network security cloud policies

Maintaining a secure perimeter to allow only legitimate traffic onto your network is critical in the cloud and the leading cloud service providers acknowledge this by supplying tools to determine which users or group identities should have access to hosted services and applications. Amazon and Microsoft both call their tools “Security Groups”, Google offers the “Identity-Aware Service”.

Within each of these tools, the capability exists to apply network security cloud policies that define what inbound traffic is allowed. As well as using cloud policies for access control, best practice is to apply policies to alert you to Security Group misconfigurations, when new Security Groups are created, when Security Groups exist that are not being used, and when assets have too many rules applied to them.

Automating the enforcement of cloud policies

Prior to creating cloud policies, it is essential to have total visibility over your cloud environment in order to fully understand what assets your company has deployed in the cloud and how they are being used. CloudHealth gives you the total visibility required and tools to analyze costs, usage, performance, and security to enable you to make informed choices when applying cloud policies.

CloudHealth then automates governance of your cloud policies to provide continuous monitoring – alerting you to events that require your attention or that may require you to revisit your policies as your presence in the cloud evolves and grows.