Cloud Computing
Cost Optimization
Definition
Cloud cost optimization is the process of reducing your overall cloud spending by identifying mismanaged resources, eliminating waste, reserving capacity for higher discounts, and right-sizing computing services to scale.
Why It Matters
Cost optimization is a continuous process that is crucial for maximizing the value of the cloud. Without it, cloud bills can easily become bloated with spending on unused or oversized resources.
Contextual Example
A common cost optimization technique is "right-sizing." An analysis might show that a virtual server is consistently using only 10% of its CPU. The server can be "right-sized" to a smaller, cheaper instance type without affecting performance.
Common Misunderstandings
- It is a key part of the FinOps framework.
- Other techniques include using Spot Instances for fault-tolerant workloads and leveraging Reserved Instances for predictable workloads.