Cost Optimization
Practices and strategies to minimize cloud spending without sacrificing performance, including right-sizing, reservations, spot instances, and eliminating idle resources.
seed#cost-optimization#finops#cloud#aws#savings#efficiency
What it is
Cloud cost optimization is the continuous process of reducing spending without negatively impacting performance or availability. It's one of the pillars of the AWS Well-Architected Framework and a discipline known as FinOps.
Main strategies
Right-sizing
Adjusting resource size to actual usage:
- Analyze CPU, memory, I/O metrics
- Reduce oversized instances
- AWS Compute Optimizer provides recommendations
Purchase models
| Model | Discount | Commitment |
|---|---|---|
| On-demand | 0% | None |
| Savings Plans | ~30-70% | 1-3 years |
| Reserved Instances | ~30-70% | 1-3 years |
| Spot Instances | ~60-90% | None (interruptible) |
Serverless
Serverless optimizes costs automatically:
- Pay for actual usage (not reserved capacity)
- Scales to zero when there's no traffic
- No idle infrastructure cost
Waste elimination
- Orphaned resources (EBS volumes, unassociated EIPs)
- Dev environments running 24/7
- Old snapshots and backups
AWS tools
- Cost Explorer: spending analysis
- Budgets: budget alerts
- Trusted Advisor: savings recommendations
Why it matters
In the cloud, cost is an engineering metric. Without active optimization, expenses grow faster than the value delivered. FinOps practices — right-sizing, reservations, tagging, idle resource elimination — are an engineering responsibility, not just a finance one.
References
- AWS Cost Optimization — Official tools.
- FinOps Foundation — Framework and community.
- FinOps Framework — FinOps Foundation, 2024. Reference framework for cloud financial management.