5 Cloud Cost Saving Strategies : Do’s & Dont’s

how to reduce cloud costs

Cloud Spend

Cloud spend refers to the monthly amount spent on an organization’s cloud infrastructure. Digging into the cloud spend can enable organizations to gain valuable insights about the consumption of the resources and their optimization to keep the monthly cloud spend within their budget.

What is Cloud Cost Optimization

Cloud cost optimization involves adopting a set of strategies to reduce your cloud spending while at the same time ensuring that the performance is not compromised. It often involves identifying the resource utilization to check for possible discrepancies like over-utilized resources, excess storage, etc.

Many times the cloud spending exceeds the estimates and expectations of many clients. According to Gartner, cloud computing is forecast to constitute about 14 percent of enterprise IT spending in 2024. Cloud spending keeps on spiraling unless and until you don’t take concrete measures.

According to the State of the Cloud report by Flexera, most of the organizations, despite spending a lump sum amount on their cloud services, find it difficult to control their cloud spending.

The survey says that 30 percent of the cloud spend is being wasted. Though cloud adoption is on the rise most organizations are not exploiting the discounting options that are offered by the various cloud service providers.

Most of the end-users are also not taking advantage of the reserved instances and spot instances. More than half of the Azure users are not taking advantage of reserved instances with only 46 percent of the users reported to be leveraging the use of reserved instances. While it may not be possible to completely keep the cloud spend under your watch, you can follow a set of strategies that can enable you to save cloud costs. Let’s take a look at some of the cost-saving strategies for cloud spending.

5 Cost Saving Strategies For Cloud Cost Reduction

1) Use Automation

Enterprises often keep on running their computation capacities round the clock. Most of the cloud service providers provide automation services that enable you to scale up and scale down the services. Automation can help you to turn off the systems and other resources during non-business hours like weekends and off days. Thus cloud automation services enable you to bring down the active hours for which your infrastructure is running and thus reduce the cost.

2) Ensure That You Don’t Overprovision Cloud Resources

Overprovisioning refers to the process of piling up or stocking up of resources based on storage, computation, networking, etc as a precautionary measure to meet any unforeseen surge in demand so that day-to-day operations will not be interrupted. Many times these resources often go unutilized, thus you end up paying for these unused resources. Unlike an on-premise infrastructure, there is no need to make any upfront investment in resources. Cloud service providers can offer you the required resources based on your operational demands.

3) Software Licenses

The asset management team in an organization should track the license of software that is used in the cloud. Also running software that has license restrictions in the cloud can significantly enhance the cost. There may be some software that you might have migrated from the on-premise infrastructure to the cloud which might no longer be required.

But these applications can execute in the background and consume a significant amount of resources that result in increased cloud spending. After you make your way into the cloud from on-premise infrastructure, you should review the contract on the hardware that was based on the on-premise infrastructure. The contracts with all the retired hardware that were based on the on-premise infrastructure should be revoked to ensure that you do not keep paying for retired and redundant services.

4) Right-Sizing the Cloud Resources

Right-sizing involves identifying the most appropriate capacity for your storage and servers. It involves performance testing to analyze the capacity required and then right-sizing the servers according to the results. Right-sizing your storage enables you to optimize the storage that exactly suits your operational needs. Right-sizing can thus eliminate the need to reserve excess storage thus enabling you to save costs.

5) Monitoring the Cloud

Most of the cloud service providers offer remote monitoring capabilities that enable you to detect any anomalies concerning your cloud platforms and their resources based on over-provisioning, under provisioning, and applications that are taking a heavy toll on resources consumption. AWS offers tagging which enables the end-users to know every minute detail about the resource consumption. Cloud service providers offer billing tracking solutions based on automated alerts, budget services, etc that enable you to identify the cloud spend on each of the applications.

Dos and Don’ts of Cloud Cost Optimization


1) Automated Scheduling

Most cloud service providers enable end-users to leverage the advantages of automated scheduling of instances. AWS offers Amazon Instance Scheduler, GCP offers automatic start and stop virtual machine (VM) instances and Azure offers start-stop features. Automated scheduling enables users to ensure that the instances are turned off during non-business hours.

2) Auto Scaling and Load Balancing
Use auto-scaling features provided by the service providers to scale your environment and thus eliminate cost overheads. Users can add extra nodes as the requirements increase rather than make a lump sum investment on the resources. Most of the cloud platforms offer load balancing capabilities, like the Azure load balancer offered by Azure and AWS Elastic load balancer offered by AWS. Load balancing enables users to distribute the traffic across multiple instances thus enabling users to scale their applications, route the traffic to appropriate instances without having to bother about the intensity of the traffic.


1) Keep the Capacities Running Throughout

Most of the companies often do not turn off their capacities, thus running them round-the-clock and resulting in burgeoning cloud bills. Turning them off during non-business hours makes sense as you need to pay only for your usage.

2) Overlook Planning

Many enterprises often conclude that everything can be managed by themselves. Such a complacent approach can often boomerang back onto themselves. Proper planning helps you to tag the resources and reserve the exact capacities that can address your needs.

Cost Optimization: How Do the Major Cloud Platforms Fare

According to a survey by ITWeb and AWS, cost savings, efficiency, and innovation are the top priorities for businesses. According to Flexera’s 2020 State of the Cloud Report, companies estimate that about 30 percent of their cloud spending goes wasted.

Most of the statistics say that among the top three cloud providers; AWS, Azure, and Google Cloud, the Google cloud services are comparatively cheaper as compared to an equivalent level of services offered by AWS and Azure.

Google Cloud Platform

The Google Cloud Platform (GCP) pay-as-you-go pricing scheme ensures that you need to pay only for the resources that you use without any long-term commitments.
GCP also enables users to save their cloud spending based on monthly usage by paying for the resources in advance at discount rates.


AWS also offers the users the pay-as-you-go services that ensure users pay for only what they use.
The pay less by using more policy offered by AWS enables users to avail discounts based on the volume. Higher the volume a user employs, the higher will be the discount he/she avails. This ensures that the price per unit or GB is smaller.

Microsoft Azure

Microsoft Azure also offers a flexible payment scheme based on resource consumption just like GCP and AWS.

The Azure Spot Virtual Machine enables users to leverage the unused compute resources capacity at discounts of about 90 percent as compared with the pay-as-you-go pricing model.

Azure offers a third pricing policy based on an advanced commitment for the resources for a period of one to three years on some Azure services that lets you pay less.


Not only is cloud adoption on the rise but more and more enterprises are expanding and upgrading their cloud infrastructure. This has emphasized the need to keep the cloud costs under check. Adopting the appropriate strategies ensures that you not only optimize the cost but also the performance and efficiency.

Activelobby is a company that primarily deals with cloud and other allied services. As part of our cloud services, we offer cloud-managed and migration services. We manage cloud platforms and offer monitoring and troubleshooting services. As part of migration services, we transfer the workloads based on local storage or a cloud platform to another cloud. We also provide product support and assistance services to our clients and customers.


Rohith Krishnan

Rohith SK is an MSC computer science graduate living in Cochin, Kerala. As a technology enthusiast, he is always on the lookout for the latest trends and developments in the field, with a particular interest in cloud computing and DevOps updates. Apart from his passion for technology, Rohith SK is an avid reader and enjoys spending his free time exploring different genres of literature. He believes that reading is one of the best ways to expand one's knowledge and understanding of the world. With his expertise in computer science and a passion for technology, Rohith SK regularly contributes articles and blog posts on the latest trends and updates in the industry. His articles offer insights and valuable perspectives on the various aspects of cloud computing and DevOps, and are widely read and appreciated by readers all over the world. As an experienced technology writer and researcher, Rohith SK's articles are well-researched, informative, and easy to understand, making them accessible to readers of all levels of technical knowledge. Whether you're a beginner looking to learn more about the latest trends in technology, or an experienced professional seeking insights and updates, Rohith's articles are sure to provide valuable information and insights.

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