How to Reduce Cloud Costs

Introduction: The Cost Optimisation Challenge

Cloud platforms like AWS, Google Cloud and Azure are powerful infrastructure solutions, but without proper cost management, monthly bills can spiral quickly. Many organisations overspend on cloud infrastructure due to unoptimised resources, unused services, inefficient configurations or poor commitment planning.

The good news: most organisations can achieve 20-40% cost savings through strategic optimisation. In this guide, we'll share practical strategies you can implement immediately.

1. Optimise Compute Resources

Right-size Your Instances

Many organisations run instances that are too large for their actual workload. Use your cloud platform's monitoring tools to analyse CPU, memory and disk utilisation, then resize instances to match actual demand.

• Review metrics: Check CPU utilisation, memory usage and network traffic
• Identify oversized instances: Look for instances with consistently low utilisation
• Resize: Move to appropriate machine types based on actual requirements
• Test thoroughly: Ensure application performance after resizing

Use Spot/Preemptible Instances

Spot instances and preemptible VMs cost 60-90% less than standard on-demand instances. They're ideal for:

• Batch processing jobs
• Data analysis workloads
• Non-critical background tasks
• Development and testing environments

Key consideration: These instances can be terminated with short notice, so use them for fault-tolerant workloads only.

Implement Autoscaling

Configure autoscaling policies to automatically adjust capacity based on demand:

• Scale up during peak traffic periods
• Scale down during low-demand periods
• Set aggressive scale-down policies to avoid idle capacity
• Use predictive scaling to anticipate demand patterns

2. Optimise Storage Costs

Implement Storage Lifecycle Policies

Move data to cheaper storage tiers as it ages:

• Frequent access: Hot storage (standard tier)
• Occasional access: Warm storage (infrequent access tier)
• Archival: Cold storage (glacier/archive tier)
• Automatic transitions: Set policies to automatically migrate data

Clean Up Unused Storage

Regularly audit and delete:

• Unattached volumes and disks
• Old database snapshots
• Unused backups
• Duplicate or obsolete data

Data Transfer Optimisation

Data transfer costs can be significant. Reduce egress charges by:

• Using content delivery networks (CDNs)
• Caching data closer to users
• Keeping data within the same region
• Using direct connectivity instead of internet transit

3. Commitment Planning & Discounts

Reserved Instances / Committed Use Discounts

Cloud providers offer significant discounts for long-term commitments:

• 1-year commitments: 20-30% discount
• 3-year commitments: 40-60% discount
• Analysis first: Only commit to resources you're certain about
• Flexibility: Many providers offer flexible commitment plans

Savings Plans

Savings plans offer flexibility across resource types and regions:

• Compute savings plans
• Provider-specific savings plans
• Greater flexibility than reserved instances

4. Database Cost Optimisation

Choose Appropriate Database Types

• Relational databases for structured data
• NoSQL for high-scale, flexible schemas
• Time-series databases for metrics/telemetry
• Managed vs. self-hosted trade-offs

Query Optimisation

• Add indexes to frequently queried columns
• Partition large tables for faster queries
• Use query analysis tools to identify slow queries
• Cache query results where appropriate

5. Monitoring & Governance

Implement Cost Visibility

• Enable detailed cost tracking and allocation
• Tag resources by team, project, or cost center
• Set up automated cost alerts
• Review costs weekly, not just monthly

Establish Governance Policies

• Define approval processes for new resources
• Set budget limits by team or project
• Require tagging for all resources
• Regular cost reviews and optimization meetings

Quick Wins Checklist

Start with these quick wins that typically deliver immediate savings:

• ☐ Remove unused resources (old instances, volumes, snapshots)
• ☐ Right-size oversized instances
• ☐ Enable storage lifecycle policies
• ☐ Implement reserved instance/commitment discounts
• ☐ Set up cost alerts and monitoring
• ☐ Review and optimize data transfer

Getting Help

Cloud cost optimisation requires ongoing attention. If you'd like expert help analysing your cloud costs and developing an optimisation strategy, we're here to help.

Learn more about our cloud cost optimisation services or book a free 30-minute assessment with our team.