The 7 Pillars of Cloud Cost Optimization

August 12, 2019

7 Pillars of Cloud Cost Optimization – Cloud computing has transformed in recent years from being an option to a necessity for organizations, as the benefits it offers them from the perspective of the IT infrastructure and expenditure are massive. In fact, according to Frost & Sullivan, cloud IaaS revenue will reach approximately $150.7 billion by 2023. According to Gartner, the public cloud services market is expected to grow to about $206.2 billion by 2019. 

However, when it comes to cutting down costs spent on cloud operations, an organization should follow certain practices. 

Here are 7 pillars or best practices an organization should follow in order to optimize its cloud expenditure.

The 7 Pillars of Cloud Cost Optimization:

Measure, Monitor and Improve

To ensure that you extract the full economic potential of cloud service at any scale, you should:

  • Define and enforce cost allocation tagging
  • Define metrics, set targets, and review at a reasonable cadence
  • Enable teams to architect for cost via training, visualization of progress goals, and a balance of incentives
  • Assign optimization responsibility to an individual or to a team

Platforms like Azure Data Lake and AWS Cloudsearch and IBM Cognos Analytics are some of the platforms available in the industry that help companies to important data and create detailed reports. 

Furthermore, FinOps, a new operating model for the cloud is picking up steam in recent years. FinOps specifically increases an organization’s ability to understand its cloud costs and make informed tradeoffs. 


The key to obtaining the worth you are paying to access cloud services is to make a nearly accurate estimation of resource utilization and other performance metrics. A few examples of resources may include the number of cloud instances and virtual machines you are using. Make sure that these resources are neither under-utilized or over-utilized.

Purchasing options: On-Demand Instances, Spot Instances, and Reserved Instances

Evaluate and optimize your purchasing options. A few third-party optimization tools allow you to estimate upfront what you are going to use. This sort of planning will not only help you in saving on your cloud spend but may also help you in obtaining good discounts for certain services.

Moreover, in the cloud, you can pay only for what you need and for what you think you will use. If it is known in advance that you are going to need a certain amount of resources, you can get reserved resources (for computation) for a much lower price.

Managed services

It is always recommended to opt for third-party managed services especially when it comes to monitoring cloud infrastructure, application and cloud performance, and obtaining alerts and reports among others. These managed services are helpful in gaining a good idea about where you can improve your cloud performance and cut down costs.

Optimize data transfer and Storage

It has to be stressed to try and identify the precise size of the storage you are using in the cloud. Cloud utilization can increase at an exponential rate in a very short period of time, which also will increase your cloud spend. Therefore, it is important to keep track of the following parameters:

  • Size – Amount of storage space being consumed
  • Data Transfer (bandwidth) – How often your data need to move from one location to another
  • Retrieval Time – How quickly data is being retrieved
  • Retrieval Requests – How often do you need to access your data

Automatic Elastic Computing

Cloud offers you the option of scaling the capacity where you can request to increase or decrease it in minutes as per your needs. For example, you can scale up the instance capacity for a flash sale easily and scale it down once the sale is over. 

Furthermore, flexibility in how you manage your cloud environments can help you save a lot of money. For example, if you put your development, testing, and staging environments separate from production, then you can turn off the non-production environments when not needed. This will save money.

Obtain a combination of cloud services

One consideration while choosing a cloud solution is whether to go with a single vendor or a combination of clouds. Both have their own benefits and limitations. Having said that, choosing a combination of cloud services from different vendors is good in several instances. One benefit it offers is definitely avoiding vendor lock-in. However, the bigger advantage is that you get more features, agility, and competitive pricing which may not be available with a single vendor. A multi-cloud environment allows companies to employ the environments according to their project requirements. Ultimately, this helps a company also save on the long-term.


Cloud cost optimization can be achieved by planning your cloud resource utilization, smart selection of cloud features, optimizing cloud performance along with following the practices mentioned above. In addition to these, partnering with the right managed service provider can further contribute to significant cloud cost savings.