In this article, we'll dive into cloud cost optimization and show you 16 methods for saving money on your huge cloud bills - AWS, GCP, Azure, etc.

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Optimizing cloud costs has become the #1 priority for companies across the globe, especially now!

In this guide, we will talk about some common (and some not-so-common) ways of cloud cost optimization - from utilizing just the right resources to embracing serverless configurations, we have your back for maximizing your budget. 

Join us as we navigate cloud economics and assist you in establishing a more efficient and cost-effective infrastructure. 

Why does Cloud Cost Optimization Matter?

Cloud cost optimization is not just about saving dollars. It's about setting a culture where different teams, software development and business team alike, within your organization care about bills.

Financial Efficiency

Cloud Cost Optimisation is essential for several reasons, financial efficiency being the most important. Optimizing cloud costs in a constantly shifting business environment ensures that your financial resources are used wisely. 

You can reallocate funds to innovation and expansion initiatives by minimizing waste and unnecessary expenditure. 

This strategic approach enables you to strike a balance between operational requirements and fiscal responsibility. That further boosts your organization's bottom line and positions it for long-term success.

Also Read: AWS Cost Optimization Tools

Proper Budget Allocation

Cloud Cost Optimisation is equally important for effective budgeting. You obtain a comprehensive view of resource utilization by strategically managing your cloud expenditures. 

This will allow you to allocate your budget where it is most important. This strategy ensures that funds are allocated to initiatives that match your business's priorities. 

Ultimately promoting fiscal responsibility and maximizing the impact of your investments. 

Scalability with Control

As your business evolves, seamlessly scaling resources is crucial, but uncontrolled growth can cause financial chaos. By optimizing cloud costs, it is possible to establish a balance between growth and fiscal responsibility. 

This strategic approach enables your company to efficiently accommodate increased demands while maintaining a firm grip on expenditures. That ensures that scalability does not come at the expense of financial control.


The significance of Cloud Cost Optimisation is increased by its contribution to sustainability. 

In addition to financial considerations, optimizing cloud expenditures relates directly to reduced resource consumption, consistent with environmentally conscious practices. 

By managing cloud costs effectively, your organization can actively contribute to reducing its carbon footprint, demonstrating a commitment to budgeting and the environment. 

In essence, Cloud Cost Optimisation exceeds financial advantages while moving towards a more eco-friendly and sustainable operational landscape.

Improving Performance

Cloud Cost Optimisation serves a dual purpose, enhancing cloud performance as an added benefit. 

Beyond financial savings, it is the key to unleashing peak application and service efficiency. 

By optimizing your cloud resources, you pave the way for more efficient operations, faster response times, and an overall enhanced user experience. 

In essence, Cloud Cost Optimization isn't just about the budget; it's the secret ingredient that turbocharges your cloud setup, ensuring it performs at its most efficient, creating a win-win situation for your finances and digital endeavors.

Let's dive into top 16 cloud cost optimization best practices.

Also Read: Kubernetes Cost Optimization Tools

#1. Establish a Monitoring System for Your Account

Establishing a reliable account monitoring system is the first step toward effective cloud cost optimization. 

This involves putting in place tools to monitor how you use your resources, where you spend money, and how well things are functioning. 

This phase is similar to having a reliable guide showing where your cloud resources are being allocated and where you can save money.

By paying close attention to these specifics, you will be better equipped to manage your cloud costs by your budget and objectives.

#2. Set your budgets 

To effectively manage costs, ensure everyone understands the project's objectives and budget. 

Instead of picking random numbers, facilitate discussions between the engineering, product, and executive teams to determine the necessary budget.

Consider whether it's a free trial or a comprehensive business strategy when planning products and features. 

Consider these requirements, as well as quickness and dependability, during planning and development.

Create a monthly budget to guide your strategy for cloud computing. Your budget will depend on the requirements of your organization. 

A detailed budget is crucial for determining how much you'll spend overall and discovering ways to save money.

#3. Identify Underutilized Resources 

Identifying underutilized resources is an additional best practice for cloud cost optimization. 

This involves thoroughly evaluating your cloud infrastructure to identify instances, services, or resources that are not optimally utilized to meet operational demands. 

By identifying such inactive or underutilized components, you enable a more prudent allocation of resources. Thereby promoting a more cost-effective operational environment. 

This practice sticks to the fundamental tenets of efficient cloud expenditure management. It further contributes to the overarching objective of attaining optimal fiscal results.

#4. Idle Resource Management

This involves identifying and managing inactive or underutilized resources, such as virtual machines or storage, for specific periods.

You can effectively reduce unnecessary costs and optimize resource allocation by employing a prudent strategy to manage these idle resources. 

This practice corresponds with the overarching strategy of carefully controlling costs and improving the financial performance of your cloud infrastructure.

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#5. Right-Size Your Services

This requires aligning service specifications, such as compute resources and storage capacities, with the demands of your applications. 

By skillfully matching service levels to burden requirements, you foster an environment of optimal resource utilization. Thereby preventing either over-provisioning or under-provisioning. 

This practice is based on the idea of cautious cloud cost management. That further results in a carefully balanced allocation of resources that integrates performance and cost considerations.

#6. Implement Auto Scaling

This strategic approach includes deploying automated protocols that dynamically re-adjust resource allocation in response to real-time fluctuating workloads. 

This practice ensures an optimal balance between performance enhancement, efficient resource utilization, and prudent financial outlay. This is done by flexibly accommodating fluctuating demand.

Incorporating auto-scaling is an essential component of sophisticated cloud cost management. It allows synchronization of resource provisioning with the changing demands of application utilization.

#7. Embrace Serverless Computing

This means moving to a model where cloud providers care for the underlying infrastructure, and developers only have to worry about code and functions. 

By using serverless design, companies can use an event-driven method that only costs money. This allows for the best use of resources and a direct link between usage and costs. 

This practice is a good example of an advanced part of cloud cost optimization & management. It focuses on using resources well, streamlining processes, and spending money wisely in the ever-changing world of cloud computing.

#8. Use Reserved Instances 

Reserved instances (for instance, AWS Reserved EC2 Instances) are a choice in cloud computing that can save you a lot of money because they are cheaper than other options.

In this process, you choose an instance type and an area or availability zone, then agree to use the instance for 1 to 3 years. This advance agreement lets cloud companies offer discounts of up to 75%. 

Given that you must pay upfront, you must do a lot of research. You need to look at how you used the instance in the past if you want to make the best decisions and save the most money.

Also Read: How to Delete AWS EC2 Instances?

#9. Use Spot Instances 

Spot Instances differ from Reserved Instances in that they can be bought anytime. But they are less reliable because they might not be available and they run out quickly. 

Spot Instances work best for big tasks or jobs that can be stopped immediately. They may not be good for important operations or take time.

#10. Adopt Multi-Cloud Strategy

Adopting multi-cloud strategy means that you need to use more than one cloud service company. It's like not putting all of your eggs in one basket. 

By doing this, you won't be stuck with just one provider and can choose the best deal from several choices. 

This plan helps you stay open, get better deals, and use your resources better. It's like having multiple ways to meet your goal, ensuring you get the most for your money in the cloud, which is always changing.

#11. Limitation of Data Transfer Fees

Moving files to and from a public cloud can be expensive. Cloud providers often charge for moving data into and out of their systems or between different areas. But you can smartly cut cloud costs by limiting data exchanges that aren't necessary.

Check out your cloud provider's transfer fees and make changes to your cloud setup to reduce the amount of data transfers you need to do. 

One way is to move widely used on-premises apps that interact with cloud data to the cloud itself. 

Also, look into the costs of the different ways to move data between the cloud and private data centers that are meant to make it safer and faster. 

By keeping a close eye on these costs, you can ensure that your cloud costs stay under control and that you don't exceed your budget.

#12. Vigilantly Monitor Cost Anomalies 

When using the cloud, watching for sudden jumps or strange trends in your spending is important. Several things, like sudden jumps in resource use or bad setups, can cause these irregularities.

To avoid these shocks, set up a strong monitoring system that lets you know when costs change in ways that aren't normal. 

Doing this gives your team the power to quickly investigate and fix any oddities, which can avoid possible financial setbacks. 

Think of it as a financial tracking system that helps avoid cost storms and keep your cloud cost optimization journey going smoothly.

Also Read: How to Use Just One Load Balancer for Multiple Apps in Kubernetes?

#13. Implement a Cloud Native Design

This means building systems for the cloud setting and taking advantage of its unique features to save money. 

One example is designing a setup with auto-scaling, ensuring that costs are only paid for servers being used.

The Well-Architected Tool is a useful guide for building effective cloud systems. 

However, a cloud-native design requires specialized skills, so it might be smart to get help. Organizations often use current cloud infrastructure instead of starting from scratch.

Your design should balance application's performance, cost optimization, and other factors aligning with your organization's aims and goals. 

For example, a faster DevOps pipeline might not necessarily mean lower prices in the cloud landscape. 

This practice shows how important it is to balance technical excellence with financial wisdom.

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#14. Optimize Cost Management Through Real-Time Analytics

Giving team members access to relevant data at the right times makes it easier to make quick changes. This can affect both the bottom line and the quality of the product. The goal is to keep from finding ways to save money before it's time.

Instead, the attention is on keeping a close eye on cost indicators to see how they change over time. This practice makes it possible to see how normal costs change over time and to spot any unusual activities that could lead to spending too much. 

If bad patterns show up, you can take action right away to stop further cash losses. 

On the other hand, it becomes possible to use more resources to handle the extra work that comes with higher earnings.

For this method to work, you need a strong cloud cost optimization tool with real-time reporting and the ability to spot unusual behavior. 

This integration improves the organization's ability to create a cost-optimization strategy that is both flexible and responsive. 

This helps align financial choices with real-time insights for continued efficiency and sound financial management.

Also Read: Top DevOps Automation Tools

#15. Use Automation for Optimizing Your Spending

This means using tools and processes that naturally change how you use resources based on real-time information and changes in your workload. 

By automating this, you don't have to do everything by hand and can keep your costs as low as possible. It's like having a smart assistant who makes changes behind the scenes. 

This saves you money and time and makes sure that your cloud resources are used in the best way possible.

Also Read: EFS vs EBS vs S3

#16. Use Appropriate Storage Options

It's like putting your things in the right-sized box. Put something in a fast store if you use it a lot. 

If not, use one that costs less. This lets you use the right kind of storage for the job at hand. This saves you money because you won't be paying for a room you don't need. 

It's all about getting the right tool for the job and keeping costs down.

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TL;DR - Cloud Cost Optimization Best Practices

Simple practices can do wonders for efficient cloud cost optimization and best practices.

Identify anamolies, setup policies for alerting, and automatically scale down cloud resources whenever possible. Right-sizing goes a long way. Use Reserved Instances wherever you can.

Above all, it's important to have the right cloud cost optimization tools & best practices in place to make sure real-time insights into your cloud. This will help you plan, react, and keep control of your cloud costs.