January 28, 2021


Leena Sanap


In the past few years, Cloud computing has gained significant popularity. Cloud computing is the on-demand availability of computer system resources, especially data storage (cloud storage) and computing power, without direct active management by the user. The term is generally used to describe data centers available to many users over the Internet.

Cloud technology and Cloud platforms enable applications and web services to run seamlessly on many platforms and have maintained an upward trajectory in recent years.

Cloud computing has changed the entire web and app development and deploying process, and more business is moving its workload on this.

However, the constant development of cloud computing has made it crucial for technical leaders to determine the best cloud platforms, services, and result-oriented modules. Most cloud service providers come with the promise to provide less of its costs with a maximum storage capacity. However, the loophole has started becoming more apparent as the system matured. The promise that business would only be charged for the resources they will use has started falling apart, as customers are being charged for the resources they order on the Amazon Web Services (AWS) pricing and Microsoft Azure pricing, whether they are using them or not.

The concept of cloud cost optimization seems like a possibility to free up more working capital.

So, what exactly is cloud cost optimization and how it works?

Cloud cost optimization is an entire process of reducing an overall cloud cost by eliminating waste, identifying mismanaged resources, computing right-sizing services to scale.

Fortunately, there are a few actionable practices for cloud cost optimization -

  • Identifying reasonable, unused resources is one of the easiest ways to optimize Cloud computing costs effectively. An idle computing instance might have a CPU utilization level of 1-5%, and when for this, an enterprise gets charged 100%, it would be such a significant waste. Turning up a temporary server for a single-use operation or not removing storage associated with terminated instances, or forgetting to turn it off later, are a few everyday exceptions cases that contribute to an increase in cloud costs. A key of cloud cost optimization strategy would help to identify and remove them and allow you to scale up your computing power at any time, and your organization can benefit from it.
  • Use discounts and free storage whenever possible, as it could help you to save a lot of money and time. Bulk buying lowers the cost rather than opting bits and pieces. Be on the lookout for potential discounts and price reductions & grab the opportunity before it ceases to exist.
  • Heatmaps are important mechanisms for cloud cost optimization. It is a visual tool that shows the high and lows in computing demand. The offers heatmap insights can work as a valuable asset in putting in place – start and stop cut-offs for different resources to reduce cloud costs. It helps to determine when actually specific resources are lying unused with the time duration. It helps to eliminate the error associated with it and optimize cloud cost to the maximum.
  • As the costs on Cloud are not only due to the servers provisioned, data transfer has also associated with cost. Try grouping resources within the same region to avoid any unnecessary costing.
  • Stop running instances which are not in use, as not closing not working instances is equal to turning on the lights when no one is in the room, when not in use and actually using them can add up to your bill.
  • Analysis of the computing services to identify the most efficient size for any operational requirement, as the correct Right-Sizing tools are not just the size of the server, it includes servers, database, memory, graphics, storage capacity and many others. Optimizing them properly not only lowers your bill, but it also facilitates peak performance for the resources you pay for.
  • Use Centralized storage management as it makes it much easier to manage and monitor cloud usage using a central server and reduce the risks that inevitably come from the decentralized acquisition of cloud services.
  • Many of the enterprises engaged with the Cloud for the long-term investment in AWS Reserved Instances(RIs). RIs are lucrative discounts, which get offered based on time commitment and upfront payment. Though managing the cost variables such as Reserved Instances (RIs), upfront payment, and storage types can be critical for successful IT, Security, DevOps and Finance teams. However, saving through the right AWS cost optimization or Azure cost optimization tactics can help you to reach up to 75%, that makes it an important cloud cost optimization strategy. .However, analysis of your past uses as RIs can be purchased for 1-3 years.
  • Now containers such as Kubernetes and Docker have become an integral part of the deployment and testing process due to its simplicity, efficiency, and maintainability on multi-cloud platforms. These containers are often used by IT teams, and together with all the dependencies containers package applications making them easier to deploy, manage and/or migrate from one environment to another.
  • Generally, people get confused between RIs and spot instances. Though they both help to save on AWS or Azure spend, Spot instances can be purchased for immediate uses and are available for auction, when the price is right. However, as a window for making the bid is usually small, you need to check prices constantly.
  • Always remain vigilant and ensure that all resources that are not being used are brought down, and give appropriate access to create resources only as required.
  • Google Cloud's cost optimization strategy provides a complete, robust set of cost management tools and no-cost billing that give a business the visibility and insights they need to keep up with their cloud deployment.


Common challenges need to be addressed while doing cloud cost optimization -

  • Lack of visibility can be a big reason for masking security threats and leads to several applications and network performance issues, which has direct cost implications. The lack of an administrative dashboard proffers organizations with no way to optimize or organize any of the cloud activities and hence, increase the costs.
  • The proper cloud allocation and management resources by the cloud provider to its customers is called provisioning, that anticipate the requirements of the resources. Failing in proper provisioning leads to unnecessary cloud costs and inefficiencies—that result in low performance and high latency of jobs, and poor user experience.
  • Software architects should have a precise knowledge of designing and building a cloud application architecture, as lacking in this can fail you to deliver the right message and the value of the cloud platform.
  • Keeping track for the cost wastage due to over-configuration, non-usage, or idle assets can be an arduous task.
  • AWS cost optimization provides an auto-scaling feature to control cloud cost by adjusting capacity. However, it may be difficult to forecast cloud costs when they have new plans to introduce new services/apps.
  • Budget forecasting can be complicated as it needs a setting for processes and workflows with deep expertise and correct data.


Cloud cost optimization is achievable for all companies in their cloud journey. Adopting cloud cost optimization with agility, right planning, and proper cloud resource utilization helps businesses to get maximum return on investment (ROI).

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