Cloud cost optimization process is concerned with decreasing the overall expenses on cloud services by determining mismanaged resources, removing waste, reserving capacity for a larger discount and scaling computing services according to requirement.

The process of cloud cost optimization offers incredible scalability and decreases IT cost by charging only for the resources being used. Normally, clients using cloud computing and storage services are charged as per the resources ordered, despite having use of them or not. According to research, around 70% of cloud costs are wasted using this strategy. Hence, there is a vast scope to save money for business when using cloud-based IT services.

7 Tips for Cloud Cost Optimization Strategies

Here are the expert tips on ensuring cloud cost optimization in your business:

1 – Identify unused or unattached resources

Identifying unused or unattached resources is the easiest way towards cloud cost optimization. Very frequently, developers or administrators need to create an additional “server” for a specific function but forget to switch it off once its work is done. In addition, the administrator may also forget to remove storage which is attached to instances that are then closed. This is a frequent occurrence in IT departments of large business organizations. This prompts the cloud service provider to charge for resources that have been purchased but are no longer in use.

Identify unused or unattached resources

Cloud Cost Optimization Strategies – Identify unused or unattached resources

2 – Collect idle resources

Next, it is important to identify the idle resources. An idle computing instance may result in 15% CPU usage while the billing includes charges for 100% usage. This is a significant waste of resources and money. An essential way to cut down on cloud resource costs is to search for idle instances and consolidate them into a fewer number of instances.

In contrast to data centers, with the help of cloud computing, today administrators are able to auto-scale, load balance and request on-demand services that provide scalable computing power at any time.

3 – Use Heatmaps

Heatmaps are extremely useful for ensuring cloud cost optimization. Heatmaps are visual tools that help show peaks and lows in overall computing demand for a particular organization or department. This is valuable information when you want to create start and stop times to cut down costs.

A heatmap can show whether development servers are safe to shut down on weekends. Although this can be done manually, leveraging automation to schedule your instances’ start and stop is a better option for cutting costs.

4 – Right Size Computing Services

Right-sizing is the technique of analyzing computing services and altering them to their most optimal size. There are over 1.7 million possible combinations to choose from and hence it gets difficult for administrators to determine the size of instances. Also, for server sizes, administrators have a variety of choices with different databases, memory, computing, storage capacity, graphics and throughput, etc.


Right-sizing techniques help optimize the entire instance family if required. In addition to ensuring cloud cost optimization, right-sizing also helps with cloud optimization to ensure optimal use of available resources.

5 – Invest in Reserved Instances (RIs)

Business organizations that rely on cloud-computing extensively should invest in Reserved Instances (RIs). These are significant discounts offered by cloud service providers, such as Amazon Web Services (AWS) and are dependent on the upfront payment and time commitment. A business enterprise can save as much as 75% with RI-based cloud cost optimization offers.

Invest in reserved instances

Invest in reserved instances

As RIs need to be purchased for a long term period, it is highly recommended to analyze your past use and determine the future use accordingly.

6 – Get benefits of spot instances

Spot instances are quite different from Reserved Instances (RIs) and can help you cut down on your cloud service expenses significantly. Spot instances are sold by auction to the highest bidder and are ready for use immediately after purchase.

However, chances to bid for spot instances are far and few in between and hence are best-suited for computing jobs that can be terminated quickly, such as batch jobs. These temporary jobs are more frequently required in large business enterprises, thus spot instances are included in cloud cost optimization plans.

7 – Choosing multi-cloud vs. single cloud

Several business organizations tend to choose multi-cloud solutions to prevent lock-in with the vendor. Although this plan works to enhance uptime and availability, there is a risk of losing volume discounts that are provided by single cloud service providers.

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Steve is a product-marketer and Engineer at Cloudysave who works with Cloud Management and Adoption team. Over the past years, he has collaborated with multiple teams to provide a robust and cost-effective architecture patterns to influence business and engineering decisions. His key areas of interests include Cloud Costs Management, Security and DevOps Best-Practices.