Cloud spending grows faster than expected at most organizations. Resources proliferate, development environments linger, and optimization gets deferred. The good news: substantial savings are usually available without major architectural changes.
Start with Visibility
You cannot optimize what you cannot see. Before implementing changes, establish clear visibility into your cloud spending.
- Enable detailed billing and cost allocation tags across all resources
- Set up cost alerts at account, project, and team levels
- Create dashboards showing spending trends by service, team, and environment
- Identify your top 10 spending categories; this is where optimization matters most
Most organizations find that 80% of spending comes from 20% of services. Focus optimization efforts where they will have impact.
Quick Wins: Unused and Underutilized Resources
Every cloud environment has waste. Start by finding and eliminating it.
Unused Resources
- Unattached EBS volumes and persistent disks: storage costs continue after instance termination
- Old snapshots and backups: retention policies often keep backups longer than needed
- Idle load balancers: orphaned after application decommissioning
- Unused elastic IPs and static addresses: small but unnecessary costs
- Stopped instances with attached storage: may not need to exist at all
A typical cleanup finds 5-15% waste in unused resources. This is immediate savings with no risk.
Underutilized Resources
Resources sized for peak loads often run at low utilization. Check CPU, memory, and network metrics for your top-spending instances.
- Instances averaging under 20% CPU are candidates for downsizing
- Over-provisioned databases often have significant headroom
- Development and staging environments rarely need production-grade resources
- Batch workloads can use spot/preemptible instances at 60-90% discount
Commitment Discounts
All major cloud providers offer significant discounts for usage commitments. This is usually the largest single optimization.
Reserved Instances and Savings Plans
For predictable workloads, one-year or three-year commitments reduce costs 30-60%. Start with resources that will definitely run for the commitment period: production databases, core application servers, always-on services.
Savings Plans (AWS) and Committed Use Discounts (GCP) offer flexibility across instance types while still providing substantial discounts.
Spot and Preemptible Instances
For interruptible workloads, spot instances cost 60-90% less than on-demand. Good candidates include batch processing, CI/CD runners, development environments, and stateless web tiers with auto-scaling.
Architecture Optimizations
Some optimizations require architectural changes but deliver ongoing savings.
- Auto-scaling: match capacity to actual demand instead of provisioning for peak
- Serverless for variable workloads: pay only for actual execution time
- Data tiering: move infrequently accessed data to cheaper storage classes
- Region optimization: some regions are significantly cheaper than others
- Right-size databases: managed database services often over-provision
Governance and Sustainability
Optimization is not a one-time project. Build sustainable practices.
- Require cost tags on all resources for accountability
- Implement automatic shutdown for non-production environments outside business hours
- Set budget alerts that notify teams when spending exceeds thresholds
- Include cost review in deployment pipelines and architecture reviews
- Assign cost optimization ownership to specific individuals or teams
We help organizations implement comprehensive cloud cost optimization programs. Our assessments typically identify 30-50% savings opportunities. Contact us for a free cloud cost review.