Cloud Cost Optimization: The 6 Best Ways to Optimize Cloud Spend

Cloud Cost Optimization
Cloud Cost Optimization

What is Cloud Cost Optimization?

Cloud cost optimization is a service that analyzes your cloud usage and recommends a plan that will be the most cost-effective for you. Cloud providers offer different plans with various features and prices, so it can be difficult to find one that fits all your needs. Cloud Cost Optimization simplifies this process by analyzing your current cloud usage and recommending plans with the best fit for you. This article proposes several high-impact cloud cost optimization best practices and tips.

What Drives Cloud Costs?

Cloud services costs can be categorized into three main components:

  • Computing—The amount of CPU resources, memory and/or specialized hardware your cloud provider is offering will dramatically affect your costs.  You pay based on the number and types of resources used and the duration for which they are being used.
  • Networking—Typically, networking costs are driven by the volume of data coming into and out of the cloud service. However, network services such as static IPs, load balancers and gateways may influence costs significantly.  Monitoring the usage levels of each of these, and taking the appropriate measures can help optimize costs.  
  • Storage—Elastic storage services charge by storage actually utilized. Managed storage services charge for an entire block of storage, regardless of the amount of storage utilized.

Cloud Cost Optimization Best Practices

  1. Regularly Monitor Your Cloud Costs
  2. Identify Idle Resources and Consolidate
  3. “Right Size” Compute Resources
  4. Find Unused or Inactive Resources
  5. Optimize Data Storage
  6. Include DevOps Teams in Your Cost Analysis

1. Regularly Monitor Your Cloud Costs

To optimize costs, and prevent paying for under-utilized storage, you need to frequently monitor costs to observe cost inefficiencies. A robust cloud cost-monitoring strategy can identify opportunities for cost savings.  Daily monitoring and monthly analysis should be your minimum standard.

2. Identify Idle Resources and Consolidate

Most cloud systems have many resources that are “mostly idle”.  They simply do not require dedicated resources and also require the lowest levels of availability.  By consolidating resources for these idle systems and focusing resources on systems that require the highest levels of availability, your system resources can be greatly optimized. 

3. “Right Size” Compute Resources

AWS offers hundreds of different instance types.  Picking the right instance is half the battle.  All too often, we see well-intentioned cloud managers pick an instance that is not optimal for an organization’s cloud system. 

In addition, companies often spin up resources for a system, forget about them, and then these resources remain idle for months on end.  Be sure to audit these compute resources to detect idle systems that can be decommissioned or consolidated.  In this way, costly compute resources can be minimized.

Azure Advisor from Microsoft Azure and the AWS Cost Explorer are both right-sizing tools that can be used to optimize resource usage.

4. Find Unused or Inactive Resources

Find resources that have been deployed but are not being used.  Of particular interest are allocation-based resources, as these accrue charges regardless of their usage.  You might look at unused storage volumes or unassigned IP addresses for these cost-saving opportunities.

Unused resources accumulate over time, so after you find unused resources in your current system, set up processes to detect unused resources moving forward. 

5. Optimize Data Storage

All data is not equally critical.  And even data that was once critical becomes less so after time passes.  Social media data and CRM data are examples of data that become less important with time.  Store data deemed less important in less expensive services or tiers. 

6. Include DevOps Teams in Your Cost Analysis

DevOps teams are, by definition, the bridge between Ops and Development teams.   Any cost-reduction efforts must have the input from both Ops and Development.  In fact, you may find that your employees in the trenches may also have some input, so listen to them too when deciding where to deploy your spending.


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