10 Smart Cloud Cost Optimization Best Practices To Slash Your Cloud Spending Without Losing Value

10 Smart Cloud Cost Optimization Best Practices Featured img BDCC

Are you worried about where your cloud budget is disappearing? Well, you are not the only one overspending on cloud services! Gartner reports that end-user spending over Public Cloud Services will reach USD 724 billion worldwide. With cloud providers like Azure, GCP, and AWS, many global enterprises are adapting multi-cloud environments without checking their cloud bills.

So, before you struggle to control your cloud costs, focus on implementing Cloud Cost Optimization–A unique strategy-based approach that can make your cloud environments cost-efficient! So, how can you optimize your cloud expenses? What will be the expected outcomes? Let’s discuss them one by one!

Why Should You Prioritize Cloud Cost Optimization?

Before we discuss the importance of cost optimization, let’s take a quick look at the scenarios where your cloud budget might overrun without you even noticing:

  • Lack of cost management leads to untracked and unmanaged cloud expenses.
  • Unexpected cloud projects increase costs beyond original budget estimates.
  • Developers overprovision cloud resources that remain idle in Dev/Test environments.
  • Inadequate autoscaling results in excessive production headroom costs.
  • Overprovisioned production environments lead to higher monthly expenses.

Can you relate to any? If the answer is yes, that means you are already overspending! That’s why you must prioritize cost optimization with immediate effect!

What Results Can You Expect From Cloud Cost Optimization?

Listing here the top advantages of optimizing your cloud spending:

  • Significantly lower monthly cloud bills with strategic resource management.
  • Enhance operational efficiency by eliminating unnecessary cloud expenses.
  • Improve overall business agility with optimized resource allocation.
  • Increase return on investment by maximizing cloud resource utilization.
  • Focus more on innovation by redirecting savings towards strategic projects.

As you optimize cloud costs, you must know it is not a one-time event! Instead, it is an ongoing strategy that helps you maximize your cloud returns with efficient budget control and predictability.

But what’s the best approach to cost-optimize your multi-cloud environments? We’re about to discuss the most effective solutions you might use while strategizing Cloud Cost Optimization!

10 Most Effective Best Practices To Cost Optimize Your Cloud Environments

Just as you start feeling the burden of high cloud expenditures, these useful tactics and best practices will help you streamline your cloud spending in a promising manner!

Review SLAs and Vendor Agreements

When architecting your cloud transformation, thoroughly review the service-level agreements to align with your internal SLAs. If the service provider’s commitments don’t meet your operational needs, revisit vendor agreements to assess spending commitments and renegotiate terms. Don’t wait until contract expiration; initiate renegotiations earlier to maximize flexibility and cost savings.

Gain Visibility About Your Current Cloud Costs

How far have you been monitoring your cloud bills? First, begin by analyzing your current expenses before optimizing your cloud costs! You can’t modify the ongoing cycle until you know where your cloud budget is going! The main cost factors in any cloud setting are as follows:

  • Compute costs due to running Virtual Machines.
  • Managed services costs based on cloud usage rates.
  • Storage costs for implementing different data storage types.
  • Network bandwidth costs for data transfer and egress.
  • Administrative support costs, depending on the Cloud Service Provider.
  • Upkeeping costs of reserved instances for future usage.

You can easily track down these expenses using the cost management tools available from your Cloud Service Provider. For example, you can use AWS CloudWatch if you use Amazon Web Services and Microsoft Cost Management tools to analyze your Azure Cloud spending!

Adopt A Cloud Cost Optimization Framework

Once you know your current cloud estate, plan to implement a structured cloud cost management approach with a suitable cost optimization framework. Don’t forget to incorporate the following components in this framework:

  • Cost monitoring: Continuously track expenses using cloud provider tools.
  • Rightsizing: Adjust resource allocations to match actual usage.
  • Autoscaling: Implement autoscaling to optimize resource usage.
  • Cost allocation: Assign your cloud budget based on projects or departments.

Any cloud cost management framework needs a well-optimized architecture and feature trade-offs. By considering these components, you can quickly achieve your cost savings goals.

Identify and Eliminate Unutilized and Idle Resources

Have you checked for unused or idle cloud resources? Optimizing cloud costs starts with identifying and removing unattached and idle resources. When you start looking, you might find temporary servers and storage inflating your cloud bills unnecessarily.

Similarly, idle resources still incur charges, even when not in use. By consolidating these, you can reduce your cloud bills. So, use the available cloud provider tools to find and remove unused resources. Instead, auto-scaling and load balancing should be implemented to meet workload demands. Thus, you’ll only pay for the cloud resources you truly need.

Consider Serverless/Microservices-Based Environment

How far will you go with your legacy infrastructure? While these only increase infrastructure maintenance costs, you can transition to a serverless or microservices architecture to save loads!

Move your old applications to a cloud-native setting where Kubernetes Clusters and Microservices-based architectures handle your application workloads. Utilizing these can significantly reduce your cloud spending and enhance operational agility in cloud environments.

Maintain Cloud Migration Momentum with Strategic Planning

Do not slow down migrations of your legacy systems and applications to maximize cost savings. Otherwise, you might have to pay additional maintenance costs. Instead, prioritize migrating workloads that add value faster. Move all your critical business initiatives to a modern cloud infrastructure! Thoughtful cloud migrations not only reduce costs but also position your business for faster growth in the future.

Right-Size Your Cloud Computing Services

Moving on, you must optimize your cloud computing and managed services! The method of Right-Sizing involves analyzing and adjusting instances to match workload requirements. You can do right-sizing following these methods:

  • Use automated sizing tools based on different instance types.
  • Monitor application performance to adjust resources accordingly.
  • Simulate peak loads to determine the required resources.

In addition to implementing right-sizing practices, you can use allocation-based services to maximize your cloud investments.

Choose Multi-Cloud or Single Cloud Environments

While multi-cloud can increase uptime and availability, it may lead to missed volume discounts from a single cloud provider. For example, a company spending $200k on AWS and $500k on Azure might need to reach higher volume discounts.

However, managing multiple clouds can introduce administrative complexities you might not like! So, evaluate the potential cloud cost optimization of a multi-cloud strategy compared to having a single cloud environment and then decide!

Implement No-Regret Actions for Quick Cost Savings

You should discover quick wins in your cloud management strategy as you release unused capacity and align service levels to application requirements. You can prioritize actions offering maximum benefit and scale successful strategies across teams. Also, consider adjusting instance sizes and implementing scheduling for non-peak hours.

Optimize Cost Monitoring and Anomaly Detection

Can resource tagging for cost allocation help you reduce your cloud consumption? That’s why you must implement a chargeback model that holds cloud consumers accountable for their consumption. You can also utilize the Cost Management console to set budgets and forecast future costs. It helps you identify spending anomalies and track key metrics like CPU and storage utilization and network traffic.

It’s Time To Save More With Minimal Cloud Spends!

The bottom line of Cloud Cost Optimization is in your own hands. From choosing the right cloud service provider to planning a cost-efficient cloud implementation strategy, you are the main hero in driving cloud transformation! No matter which stage you are currently in, immediately take action! Be the navigator to implement cloud cost management following the best practices we’ve just discussed; good luck!


What is a Cloud Cost Optimization strategy?

A cost optimization strategy is helpful for organizations struggling with their cloud spending. It is a systematic approach to minimizing cloud expenses. It involves analyzing usage patterns and optimizing resource allocation to maximize the value derived from your cloud investments.

How can I set budgets to control my cloud spending?

First, you must determine what cloud services you require before allocating the budget. Using the same billing subscription is best when using a public cloud provider. To check how resource consumption happens, consider utilizing the free credits first and then moving to a paid plan.

Can I optimize cloud costs at different software development stages?

Absolutely! You should embed cost-efficiency into your SDLC from the very beginning:

  • Planning: Predict resource needs using historical data for cost-effective planning.
  • Development: Use more minor instances and focus on lightweight, scalable apps.
  • Testing: Automate testing and use spot instances for non-critical environments.
  • Monitoring: Implement real-time tracking and alerts for unusual usage.

Also, remember to review and deprecate unused resources regularly. It will undoubtedly help you control your cloud expenses.

When should I consider a multi-cloud strategy?

If you require multiple cloud vendors to achieve maximum efficiency, consider the following scenarios that are perfect for having multi-cloud environments:

  • You want to avoid vendor lock-in and increase resilience.
  • Your application requirements can be filled by different cloud providers only.
  • You want to take advantage of pricing differences and negotiate better deals.
  • Your business requires geographic distribution across multiple regions.
  • You want to ensure business continuity with disaster recovery plans.

For all these situations, a multi-cloud setup is perfect to match the organizational requirements!

What challenges might I face while optimizing my cloud costs?

If optimizing cloud costs is your first time doing so, embrace yourself to face any of the following bottlenecks:

  • You might not have complete visibility on current cloud spending
  • Teams may lack the skills required for effective cloud management
  • Instances may be overprovisioned or left running behind
  • Fluctuations in workload demand can make it challenging
  • Managing costs and resources across different cloud platforms

However, you can hire a professional cloud consulting company to overcome these challenges. Let the professionals handle your current situation for the best!

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Co-Founder & Director, Business Management
BDCC Global is a leading DevOps research company. We believe in sharing knowledge and increasing awareness, and to contribute to this cause, we try to include all the latest changes, news, and fresh content from the DevOps world into our blogs.

About BDCC

BDCC Global is a leading DevOps research company. We believe in sharing knowledge and increasing awareness, and to contribute to this cause, we try to include all the latest changes, news, and fresh content from the DevOps world into our blogs.

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