Why Is Cloud Cost Optimization Important?

Jason Yaeger
October 31, 2022
5 min read
If you're running a business, keeping an eye on your expenses is essential. That's why optimizing costs is necessary, especially in cloud computing. This blog post will explore why cloud cost controls are important and how they can benefit your business. 

If you're running a business, keeping an eye on your expenses is essential. That's why optimizing costs is necessary, especially in cloud computing. This blog post will explore why cloud cost controls are important and how they can benefit your business. 

We'll also look at some tips on how to get started with optimizing your cloud technology costs. So whether you're new to the world of cloud computing or just looking for ways to save money, this post is for you. Let's dive in to answer the question, “Why is cloud cost optimization important?”

What Is Cloud Cost Optimization?

Cloud cost optimization is the process of reducing your monthly cloud bill without sacrificing workload performance or availability. 

There are several ways to lower costs, but the most common approach is to use reserved instances. As the name suggests, purchasing reserved instances means obtaining storage space that you will use in the future at a discount price. 

Another popular method is autoscaling, which allows you to dynamically scale resources up or down based on demand. Autoscaling can sometimes happen in tandem with the cloud infrastructure service. This capability analyzes your traffic and other parameters and automatically adjusts your cloud usage.

Regardless of your approach, cloud cost optimization can help you save money without compromising quality.

Why Should Businesses Care About Optimizing Cloud Costs?

For many companies, the cloud is often seen as a cost-saving measure. After all, opting for a cloud environment can positively affect business performance while avoiding big-ticket expenses like buying and maintaining hardware. 

However, optimizing cloud costs is only sometimes a straightforward task. Therefore, businesses must carefully consider how they use the cloud and how much they are willing to spend on a cloud service provider. 

It is essential to understand how to leverage the cloud and compute resources. Businesses that pay close attention to these variables and apply optimization methods often enjoy benefits such as the following: 

  • Companies can free up resources for other purposes.
  • It could improve business operations, boost efficiency, and reduce expenses.
  • Finally, it can help businesses achieve a competitive advantage.

Optimizing cloud costs requires a commitment, but it is an opportunity to refine and streamline usage while reducing costs across the organization. 

What Are the Main Benefits of Cloud Optimization?

So, why is cloud cost optimization important? First, let’s look at five of the most common benefits.  

1. Reduction of Wasted Spend

Any business that runs on the cloud knows cost management can be a bit of a balancing act. Of course, you want to ensure you use all the features and functionality you're paying for. But, equally, you need to be attentive to the risk of overspending, so you don’t get burdened with unnecessary, costly expenses.

That’s where cloud optimization comes in handy, enabling businesses to evaluate their cloud usage. Doing so allows companies to identify areas where Optimization could reduce expenditure without negatively impacting features, performance, and efficiency. 

2. Make Better Investments 

One of the benefits of optimization is that it can guide you to make better cloud investments. Understanding where your resources are used allows you to make informed decisions about which services to invest in and how to allocate your budget.

For example, if you notice that most of your traffic is going to one region, you could invest in cloud instances in that region to facilitate peak performance. Similarly, you could switch to a service offering less space if you're using a lot of your cloud storage capacity. 

3. Get Better Cloud Cost Visibility

Cloud optimization is a great way to get better visibility into your cloud spending. After all, idle resources have the potential to place strain on your monthly bill. These unused resources, like staging or QA, are often “parked” when they’re not utilized, such as on the weekend. 

However, you’re essentially paying a cloud provider for “on-demand” resources.

Optimization can enable you to pinpoint areas where you can improve cloud waste. That precise overview of your usage could guide your efforts to reduce the strain on your cloud budget. For instance, if you find that you are using more storage than you need in certain areas, you could adjust mismanaged resources to reduce costs.

4. Improved Efficiency and Innovation

Streamlining cloud costs can also reduce the time needed to provision resources, and it is an excellent strategy for minimizing cloud resource waste due to underutilization. In addition, it can ensure resources are close to where they are needed, further improving efficiency.

Innovation is another key benefit. When businesses maximize their use of resources, they free up more time and energy to focus on forward-thinking tasks, such as product development. In addition, they have the resources they need readily available, so they can do more and do so with ease.

In turn, cloud optimization enables businesses to be more agile and responsive to changes in the marketplace by making it easier to experiment with new ideas. As a result, companies become more efficient but also more innovative.

5. Improved Engineers' Productivity

Embracing the cloud optimization process can reduce workload congestion and boost performance by efficiently using resources. For example, knowing which cloud resources each team will use and when you can allocate those resources accordingly.

In particular, rebalancing how cloud resources are utilized and tasks allocated can mean your DevOps team has to deal with fewer issues. So, instead of being pulled in several directions, they could all work on the same page. 

Cost Cloud Optimization Strategies

There are many ways to optimize costs as part of your cloud deployments, but we'll discuss three.

1. Right Sizing

One of the best ways to address unnecessary cloud costs is to right-size your resources. Right-sizing means only using the help that you need and not over-provisioning. When you overprovision, you end up paying for resources you're not using. 

For example, you don’t want to pay for 50 GB for a department that only uses five or six GB. Analyzing each department or team’s usage over time can help organizations find the right size to meet their needs without over-provisioning.

2. Utilize Reserved Instances

If you know you will be using a specific resource for an extended period, it's a good idea to utilize reserved instances. These allow you to reserve capacity in advance, saving you a lot compared to on-demand cloud pricing. 

3. Use Discounts and Credits

Consider incorporating discount or credit programs into your cloud cost optimization strategy. Paying in advance and purchasing higher volumes typically receive discounts from most providers, but it helps to look for additional offers or credits.

Most cloud platforms offer some discount or credit programs that function like loyalty rewards. For example, the Google Cloud Platform provides sustained use discounts and committed use discounts. And Azure has reservation discounts and partner offers. 

Another option is to investigate cloud cost optimization tools. Companies like Tenacity enable companies to unlock hidden savings and harness discounts. 


Now you have the answer to the question: why is cloud cost optimization important? Cloud computing can save your business money, including reduced infrastructure costs, increased efficiency, and the use of discounts and credits. 

By taking advantage of these listed strategies, you can ensure that your cloud spending is as efficient as possible. So if you’re looking for industry-leading cloud optimization services, get visibility into your cloud costs with Tenacity and find hidden savings today. 

Sign up for Tenacity and start optimizing your cloud cost today!

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