What is Cloud Cost Optimization?
Cloud cost optimization is the continuous process of reducing cloud infrastructure spend while maintaining performance and reliability.
Cloud cost optimization is the continuous process of reducing cloud infrastructure spend while maintaining performance and reliability. It addresses the most common sources of cloud waste:
Over-provisioning: Resources sized for peak load but running at 10-20% utilization Zombie resources: Instances, volumes, and load balancers no longer attached to active services Missing reservations: Paying on-demand prices for predictable workloads Data transfer costs: Unexpected cross-region or cross-AZ data transfer charges AI/ML compute waste: GPU instances left running after training completes
Why It Matters
Cloud waste directly reduces gross margins. Most organizations waste 30-40% of their cloud spend. For a company spending $100K/month on cloud, that's $360K-$480K/year in waste — enough to hire 2-3 additional engineers.
How to Measure
Track utilization rates across all resource types. Identify resources with <20% average utilization. Calculate savings from reserved instances vs. on-demand. Run weekly cost anomaly detection.
Frequently Asked Questions
What is the easiest win in cloud cost optimization?
Reserved instances or savings plans for predictable workloads. This alone typically saves 30-50% compared to on-demand pricing with zero performance impact.
Related Terms
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Richard Ewing is a Product Economist and AI Capital Auditor. He helps companies translate technical complexity into financial clarity.
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