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April 14, 2022 | 5 min read
21 Ways to Cut Cloud Costs: The Ultimate Saver’s Guide
Kaveh Khorram

Kaveh Khorram

CEO, Usage AI

Kaveh is the Founder and CEO of

In order to stay competitive, businesses must keep a close eye on their spending – and that includes their cloud costs. With cloud costs ballooning out of proportion, and even putting companies at risk of bankruptcy, it’s important to have a plan to cut down on expenses.

Many companies are foregoing the cloud entirely, including even the cloud storage provider Dropbox. In fact, the majority of IT decision-makers are migrating applications out of the public cloud.

However, you don't need to give up on the cloud to save money. There are a number of ways to cut costs without sacrificing performance or reliability. After all, sticking with the cloud has many advantages, including reduced time to market, greater innovation and market share, and the ability to easily adopt new technologies like IoT and machine learning.

Here are 21 strategies, cost optimization tools, and specific steps businesses can take to start reducing their cloud costs.

1. Architect solutions with cloud savings in mind

When designing a new solution, think about how it will impact your company’s cloud bill. If possible, architect the solution in a way that will reduce costs. For example, if you’re building a new web application, consider using a serverless architecture.

Using automation and managed services can also help reduce costs. If you can offload some of the management tasks to a third-party provider, you’ll free up your team to focus on more important tasks.

2. Use a cloud cost optimization framework

There are a number of cloud cost optimization frameworks available, including the AWS Well-Architected Framework. These frameworks can help you assess your current architecture and identify areas where you can improve.

Businesses should balance the tradeoffs of cost versus performance, while considering visibility, governance, resource optimization, and cost allocation.

3. Create a cross-functional FinOps team

A FinOps team is responsible for monitoring and managing operations costs, including cloud costs. This team should include members from different departments, including IT, finance, and business.

The team should establish cost optimization goals and KPIs, and create policies and procedures for managing cloud costs. They should also schedule regular meetings to review current cloud spending and identify ways to save money.

4. Rightsize resources

One of the easiest ways to reduce cloud costs is to simply use less resources. If you have virtual machines that are underutilized, consider downsizing them. In addition, properly sized resources can help you avoid overspending on capacity that you don’t need.

This includes compute instances, databases, memory, storage capacity, hardware acceleration, and network bandwidth.

5. Make use of cloud pricing models

When you’re purchasing cloud services, be sure to take advantage of the various pricing models available. For example, AWS offers on-demand, reserved, and spot instances.

On-demand instances are ideal for short-term or unpredictable workloads. Reserved instances can save you a significant amount off the On-Demand price, but require a one-time upfront payment and a one- or three-year commitment. Spot instances are perfect for time-sensitive or flexible workloads.

6. Identify idle compute resources

Another way to reduce cloud costs is to identify and shut down unused resources. This includes resources that are no longer needed, as well as those that are underutilized.

To find idle resources, you can use a number of tools, including AWS Cost Explorer and AWS Cost Anomaly Detection. Once you’ve identified these resources, you can either shut them down or reserve them for future use.

7. Optimize purchasing strategies

When purchasing cloud services, be sure to compare prices and choose the option that offers the best value. In addition, consider using reserved instances or pre-paying for services to get discounts.

8. Release unneeded storage capacity

If you have storage volumes that are no longer needed, be sure to delete them to avoid paying for unnecessary storage capacity.

9. Leverage storage tiering

One way to save money on storage costs is to use lower-cost storage tiers for data that is not accessed frequently. This can help you free up space in more expensive storage tiers for data that is accessed more often.

10. Align storage redundancy with requirements

Redundancy is important for data protection, but it can also add unnecessary costs. Be sure to carefully consider your redundancy requirements and only pay for the level of protection that you need.

11. Reduce traffic across zones and regions

If you have data that needs to be accessed by users in different geographical regions, consider using a content delivery network (CDN) to reduce traffic costs.

12. Optimize network configurations

Configuring your network correctly can help you avoid costly data transfer fees. Be sure to choose the right connectivity options and use bandwidth aggressively to minimize costs.

13. Use cost-effective cloud providers

Not all cloud providers are created equal. Some providers offer more cost-effective services than others. Be sure to do your research and choose a provider that offers the best value for your needs.

14. Implement cloud management tools

There are many excellent cloud management tools available that can help you monitor and optimize your cloud usage. Be sure to choose a tool that fits your needs and budget.

15. Educate employees on cloud costs

Make sure everyone in your organization is aware of the company’s cloud spending. Educate employees on the importance of reducing costs and provide them with resources and tools to help them save money.

16. Conduct regular audits

Regularly auditing your cloud costs can help you identify areas where you may be able to make cuts. Be sure to review your cloud bill carefully and look for ways to reduce your spending.

By following these strategies, you can be sure to keep your cloud costs under control. Beyond the high-level strategies listed above, there are a number of cost optimization tools that can help you save money on your cloud bill.

17. AWS Cost Explorer

AWS Cost Explorer is a tool that helps you visualize, understand, and manage your AWS costs and usage. With Cost Explorer, you can see how much you’re spending on AWS, identify cost-saving opportunities, and track your savings over time.

18. AWS Cost Anomaly Detection

AWS Cost Anomaly Detection is a tool that uses machine learning to identify abnormal or unexpected increases in your AWS costs. This can help you avoid overspending on resources that you don’t need.

19. AWS Budgets

AWS Budgets allows you to set custom budgets for your AWS costs and usage. This can help you keep track of your spending and ensure that you don’t exceed your budget.

20. AWS Trusted Advisor

AWS Trusted Advisor is a tool that provides recommendations on how to improve your AWS environment. The recommendations can help you save money on your AWS costs, as well as improve performance and security.

21. Implement Usage.AI

Keeping track of the 20 aforementioned techniques, let alone implementing them, can be difficult and time-consuming. Thankfully, there is an AI-powered solution that can do all the hard work for you – Usage.AI.

Usage.AI is a cloud cost optimization tool that uses machine learning to identify cost-saving opportunities. The tool automatically buys and sells EC2 reservations in real-time as your needs change.

With Usage.AI, you can be sure that you’re always making the most of your cloud resources and spending. Try it today and see how much you can save on your cloud costs.

Kaveh Khorram

Kaveh Khorram

CEO, Usage AI

Kaveh is the Founder and CEO of
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