Home Cloud Optimization Best Practices for Cloud Cost Optimization: Strategies and Techniques to Optimize Your Cloud Spending

Best Practices for Cloud Cost Optimization: Strategies and Techniques to Optimize Your Cloud Spending

Best Practices for Cloud Cost Optimization

Gartner’s experts predict that enterprise IT spending on public cloud computing will surpass the 50% mark by 2025. Picture this: more than half of IT budgets will be dedicated to the cloud. 

But here’s the challenge—do you really know how much of that cloud spending is on track? 

According to a recent survey by Cloud Zero, a whopping 30% of cloud expenses are going to waste. 

So, the question is: Is your organization beating this statistic? Are you managing your cloud finances wisely? 

In this article, we aim to provide you with valuable practices and tools to harness the power of the cloud without overspending.

Breaking down cloud costs

Cloud computing implies managing a complex system of networks, machines, and applications. However, the costs of cloud computing services can be boiled down to three major components:

1. Storage expenses

Pricing models for cloud data and file storage vary based on storage options, such as object, block, or file storage.

2. Computing expenses

These costs encompass instance types, CPU and memory resources, usage duration, licensing charges, as well as security and compliance expenditures.

3. Networking expenses

These include virtual networks, load balancers, public IP addresses, and other network-related resources. Costs depend on factors like connection counts, types of network resources, and data transfer volumes.

The best cloud cost optimization practices: a 10-step strategy

No matter which cloud services vendor you’ve chosen, these steps can help you cut expenses.

Step 1. Understand your unique cloud expenses

Start by gaining a comprehensive understanding of your cloud service costs. Knowing each fee in your bill empowers you to highlight high-cost areas and make informed decisions to reduce unnecessary expenses.

Step 2. Budget strategically

Effective cost control requires clear communication and alignment of goals and budgets among stakeholders. Engage in discussions to determine cost requirements tailored to your product’s packaging and delivery, and establish monthly budgets accordingly.

Step 3. Reveal unused resources

Analyze and identify unattached or unused resources. Detecting these resources reduces costs and streamlines cloud expenses.

Step 4. Identify idle resources

Alongside unused resources, detect and consolidate idle computing resources that cloud providers may charge for, even when not in use.

Step 5. Rightsize your services

Rightsizing tools helps analyze and optimize computing services for efficiency, providing recommendations for instance type and resource allocation.

Step 6. Leverage savings plans

Savings plans offer flexible pricing models that can reduce AWS expenses by up to 70%, with year-long commitments and consistent, economical prices.

Step 7. Maximize reserved instances

Reserved instances (RIs) provide substantial cost reductions for prepaid compute instances, requiring commitment and informed choices based on historical usage.

Step 8. Embrace spot instances

Spot instances can reduce cloud costs by up to 90% compared to on-demand instances.

Step 9. Mitigate data transfer costs

Reduce data transfer fees through cloud architecture optimization and consider dedicated network connections versus physical transfer devices.

Step 10. Decide on single or multi-cloud

Choose between single-cloud or multi-cloud deployment based on your organization’s requirements and weigh the complexity of managing multiple vendors.

5 essential cloud cost optimization tools

To maximize efficiency of the best cloud optimization practices listed above, combine them with some popular tools that can help you manage resources efficiently and improve performance. 

Visualizes and forecasts AWS spending, providing cost-saving recommendations.

The Azure Cost Management and Billing tool tracks and optimizes Azure spending, offering cost analysis, budgeting, and recommendations.

This tool helps to analyze spending, set budgets, and receive cost-saving recommendations.

A comprehensive cloud management platform supporting multiple providers, offering cost analysis, governance, and automation tools.

Tools like Kubecost and Lens help monitor and optimize the cost of containerized workloads.


The landscape of cloud computing is constantly shifting; hence, knowing how to optimize your resources is like having a map that keeps your cloud journey efficient, cost-friendly, and in alignment with your business goals.

Kanda specializes in renewing inefficient systems and developing applications for businesses of all sizes. Our proficiency in cloud engineering spans across private, hybrid, and public cloud realms, empowering our clients to construct robust, secure, and scalable solutions. These solutions not only maximize returns on cloud investments but also boost business agility, reduce expenses, and minimize potential risks.

Talk to our experts to optimize your cloud computing services today.

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