September 4, 2023
Cloud FinOps
How to Reduce Your Company's Cloud Costs
Even though cloud investments are necessary, there are ways to significantly reduce cloud costs without compromising ongoing operations.

In today's challenging economic climate, companies are increasingly turning to cloud services as a means to ensure growth and streamline costs. However, it's important to note that even though cloud investments are necessary, there are ways to significantly reduce cloud costs without compromising ongoing operations.

Instilling a Responsible Cloud Spending Culture

One of the key factors contributing to unexpectedly high cloud bills is the lack of ongoing tracking and monitoring of cloud expenses. Many organizations operate on a "pay-as-you-go" basis without considering the costs incurred. To address this issue, it is essential to instill a culture of responsibility for cloud spending within the organization.

Training and Awareness

Providing training to technology teams on ways to reduce costs and encouraging them to actively monitor the cost of their operations in real-time can make a significant difference. By measuring the effectiveness and utilization of cloud services at the team, unit, and department levels, organizations can gain better visibility into their cloud spending.

Regular Reporting

Regularly sharing cost data with employees can help create awareness and accountability. By presenting cloud cost reports on a regular basis, organizations can encourage employees to make informed decisions and optimize their cloud usage.

Optimizing Cloud Resources

To maximize cost savings, it is essential to ensure that the cloud resources being paid for are fully utilized. Many organizations tend to overprovision resources, resulting in unnecessary expenses. By optimizing resource allocation, companies can save significant amounts of money.

Right-Sizing Instances

Virtual machines in a server farm often have more resources allocated than necessary. By accurately assessing the computing power required for each software solution, organizations can avoid overprovisioning and reduce costs. For example, if a software solution can function efficiently with 4 processors and 16 gigabytes of memory, there's no need to allocate double the resources just to be on the safe side.

Efficient Data Storage

Another area where cost optimization can be achieved is in data storage. Disks that are not connected to virtual machines or store rarely accessed information can be a source of unnecessary expenses. By regularly reviewing and optimizing data storage, companies can identify redundant or low-priority data and choose more cost-effective storage options, such as archiving.

Leveraging Off-Peak Times

Not all cloud services need to operate 24/7. By strategically disconnecting services during off-peak times, organizations can achieve significant cost savings. For example, development and testing environments often don't require continuous operation, making them ideal candidates for scheduled shutdowns during nights and weekends.

Storage Lifecycle Management

Not all information stored in the cloud needs to be readily accessible at all times. By categorizing data based on its frequency of use, importance, and urgency, organizations can optimize storage costs.

Tiered Storage

Dividing data into categories based on usage frequency allows organizations to allocate different storage levels. High-frequency data that requires immediate access can be stored in high-performance storage, while low-frequency data can be moved to lower-cost archival storage. By efficiently managing data storage tiers, companies can reduce costs while still ensuring data availability when needed.

Define Retention Periods

Organizations should establish clear retention periods for different types of data. By determining how long data needs to be stored without access, companies can avoid unnecessary storage costs. Compliance and regulatory requirements should be taken into account when defining retention periods.

Strategic Commitment Management

Proper management of commitments to purchase cloud services can result in significant cost reductions. Organizations can negotiate advantageous commitments with cloud service providers, such as committing to using specific services for a certain duration. This can lead to substantial discounts, ultimately lowering overall cloud expenses.

Architectural Optimization

Updating the architecture of cloud-based products can yield substantial cost savings without disrupting business operations. By reviewing and improving the utilization of cloud services, organizations can identify areas where more cost-effective alternatives or modern services can be employed.

Modernizing Services

Reviewing the architecture of various functions that rely on cloud services can uncover opportunities for optimization. For example, a marketing chain utilizing cloud services for stock management, employee management, online orders, and scheduling drivers may benefit from adopting more modern and cost-effective services. By embracing newer technologies, companies can reduce their reliance on expensive legacy systems.


As companies continue to invest in cloud services for growth and efficiency, it is crucial to optimize cloud costs to ensure long-term sustainability. By instilling a responsible cloud spending culture, optimizing cloud resources, leveraging off-peak times, implementing storage lifecycle management, managing commitments wisely, and updating product architectures, organizations can significantly reduce their cloud expenses. With careful planning and strategic implementation, companies can achieve cost savings while maintaining seamless operations in the cloud.

Remember, effective cost optimization requires ongoing monitoring, evaluation, and adaptation to the evolving needs of the organization. By continuously optimizing cloud costs, companies can unlock the full potential of cloud services while maximizing their return on investment.

Additional Information: It's essential to emphasize the importance of security, governance, and compliance when discussing cloud cost optimization. Organizations must prioritize these factors to ensure the safety and integrity of their data and operations. By implementing robust security measures and adhering to regulatory requirements, companies can instill trust and confidence in their cloud services, creating a solid foundation for cost optimization efforts.