Cost Optimization on Cloud for Better ROI

The cloud provides many benefits to companies, such as lower costs and unlimited potential because of the pay-as-you-go model that charges for only the resources you use. This flexibility and ease of provisioning resources, although good, could rack up your cloud bill if you don’t take steps to reduce costs.

Cloud cost optimization ensures that you spend the lowest possible amount on cloud resources while getting maximum value. It’s the best way to earn maximum ROI from your business’ cloud-based products or services.

This article will explore all the best practices and strategies you can apply for effective cloud cost optimization.

12 Best Strategies For Cloud Cost Optimization

There are many cloud optimization strategies companies use to ensure maximum efficiency. We will be talking about the 12 best ways to do so below:

1. Make a Good Budget

You can control how much money is spent by letting everyone know the goals and budget available for each project in a particular period. Always be specific with your budgeting, and don’t pick just any number. Instead, speak with your different heads of departments and stakeholders to know the budget required for each product. It is possible to set budget alerts on AWS/Azure/GCP which will keep the admin informed of breaches

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2. Limit the Data Transfer Fees

All cloud providers charge egress fees for data transfer from their platforms and even within (between regions). You want to keep this minimal with proper planning and architecting. To get better pricing, you can check the fees the cloud providers such as AWS, GCP, and Azure charge for data transfer to pick the one that is most efficient while being the least expensive, especially if your operations are data transfer intensive.

3. Revisit Billing Information

AWS, Azure, and GCP have billing details on their respective portals that explain the cost details of each of their cloud services intricately. You can use these reports every quarter or monthly to review your cloud costs regularly and identify any redundant costs or services running.

4. Use Proper Sizing for Your Services

One of the most important processes before putting your workloads on the cloud is sizing them for the right services. You do not want to use larger specifications for workloads that require much smaller resources. This is an ongoing process that you can adapt to the growth of your business or needs. It can be extremely difficult to manually change the sizes of instances because many things are involved, such as the graphics, storage capacity, memory, database, combinations, etc.

5. Take Advantage of Spot Instances

On AWS, Spot instances are leftover resources at low prices, which customers typically bid for to run their jobs. You would typically use spot instances for short-term or batch jobs because they are unreliable. Azure and GCP also offer similar services on their cloud platforms: low-priority VMs and preemptive VMs. Using these resources can save you a lot of money, especially when used judiciously.

6. Do Routine Audits of Your Environment

Checking your cloud resources regularly can help you identify resources that are no longer in use but continue to cost you money. Idle resources are another thing cloud service providers like AWS, Azure, and GCP charge for even when you aren’t using them. By finding and merging the resources or dropping the ones that are not needed, you can optimize the cost of your cloud. You should be aware of your costs throughout the software development cycle below.

  • Planning: You should budget your spending and make forecasts.
  • Deployment and Operational Processes: Your team should look out for any spending changes and be ready to adjust accordingly.
  • Design and Build: When your team is developing the architecture, data is key and informs the decisions.
  • Monitoring: Once you have deployed your service, it is important to reassess by feature, product, or team and generate reports.

7. Architect According to Your Workload

AWS, Azure, and GCP have similar services, and depending on your systems, a multi-cloud approach may work for you. Multi-cloud deployment doesn’t limit you to being entirely dependent on one vendor; you can benefit from all their advantages. However, this may be expensive. With a single-cloud deployment, you can take advantage of discounts to make large purchases. Switching between cloud platforms is usually a problem and requires more training from the personnel. Examine both the single and multi-cloud environment by checking the following details across platforms:

  • Cost per cloud service: Check the costs associated with storage, computing, database, etc.
  • Time to Market: How long it takes you to deploy on each platform
  • Skills: Examine the skills of your staff and which cloud provider they are most skilled in
  • Available Regions: Do the cloud providers have regions close to you that could reduce latency

8. Be Attentive to Cost Irregularities.

When using AWS, you can use the cost management console to make budgets, optimize the cloud and predict the AWS cost without putting in more effort. Most cloud services, including Azure and GCP, now have a way to detect irregularities in your workloads. The system is customizable and allows you to set different thresholds for the notification warning. Finding the irregularity in question and stopping it from acquiring any extra cost is usually taken care of.

9. Use the Right Storage Options

The different cloud providers provide multiple storage options and picking the right one can help you save a lot of money. Amazon’s S3 storage system is one of the most used cloud storage platforms. Use the storage tiers depending on how frequently you access the data to get cost savings. You can use S3 with AWS or other services; it is incredibly user-friendly and has limitless storage.

10. Employ Reserved Instances

Reserved instances are computed instances you pay for on a 1-year or 3-year contract term. These instances can offer massive discounts on your cloud costs compared to on-demand instances. Azure and GCP have similar offerings where you can pick the instance you want, the region, and the specification. Reserved instances can offer discounts as high as 75%.

11. Find and Reduce Costs from Software Licenses

Software licenses are a very major and expensive part of cloud operations. Managing a manual license can be quite challenging and raises the risk of paying for software licenses that aren’t being used (CAPEX costs). This is why the cloud approach of operational costs (OPEX) is preferred because you only pay for what you use, and you do not have to tie your money down.

12. Leverage Cloud-Native Design

Optimize your workloads for the cloud to take full benefits and drive down your costs. The cloud has many efficient and low-cost tools across all the cloud providers. Leverage these tools with documentation to get the best recommendations for cloud architectures. AWS has extensive guides and professionals that can help you design the cloud system you need to help you reduce costs using the cloud’s basic principles.


If you follow all the practices above, you will see your cloud costs reduce in no time. It isn’t an easy transition as it involves every member of your team consciously considering and putting in efforts to reduce overall cost.

Indium Software help businesses save costs significantly with Cloud Optimization services. Our cloud optimization solutions deliver complete visibility across public cloud infrastructures and provide continuous optimization which is key to cost management.


Author: Sangeetha Govardhan
Sangeetha Govardhan is AVP- Cloud Services at Indium Software.