What Is Cloud Cost Optimisation?
Cloud cost optimisation is the continuous process of aligning your cloud spending with actual business needs by eliminating waste, right-sizing resources, and using cost-effective pricing models. Industry research shows organisations waste 25-35% of cloud budget on over-provisioned, idle, or poorly priced resources.
The Optimisation Lifecycle
Optimisation follows a four-phase cycle: analyse, optimise, govern, and iterate.
| Phase | Activities | Frequency |
|---|---|---|
| Analyse | Cost visibility, waste identification, utilisation review | Monthly |
| Optimise | Right-size, reserve, schedule, eliminate | Quarterly |
| Govern | Budgets, policies, accountability | Continuous |
| Iterate | Review results, adjust approach | Monthly |
Top Optimisation Strategies
These five strategies address the largest sources of cloud waste.
Right-Sizing
Downsizing over-provisioned instances typically reduces compute costs by 15-25%. Analyse CPU, memory, and storage utilisation over 30 days. Target 40-70% average utilisation.
Reserved Capacity
Reserved instances and savings plans offer 30-60% discounts for predictable workloads. Start with 1-year commitments. Target 70-80% reserved coverage for production.
Spot Instances
Spot instances offer up to 90% savings for fault-tolerant workloads. Use for batch processing, CI/CD, and testing with graceful interruption handling.
Storage Optimisation
Moving infrequently accessed data to lower tiers reduces storage costs 60-80%. Implement lifecycle policies for automatic tier transitions.
Architecture Optimisation
Serverless and containerised architectures reduce costs by consuming resources only during actual processing. Evaluate Lambda/Functions, containers, and managed services.
Provider Comparison
Each cloud provider offers different optimisation tools and pricing programmes.
| Capability | AWS | Azure | Google Cloud |
|---|---|---|---|
| Right-Sizing | Compute Optimizer | Azure Advisor | Recommender |
| Savings | Savings Plans, RIs | Reserved VMs | Committed Use |
| Spot | Up to 90% off | Up to 90% off | Up to 80% off |
| Storage Tiers | S3 IA, Glacier | Cool, Archive | Nearline, Coldline |
Measuring Success
Track these metrics to ensure sustained optimisation results.
- Unit cost efficiency: Cost per transaction, user, or revenue dollar
- Utilisation rates: Average CPU/memory across compute fleet
- Waste percentage: Spending on idle resources (target under 10%)
- Reserved coverage: Eligible spend covered by commitments
For deeper analysis, see our cloud cost analysis guide.
How Opsio Delivers Optimisation
Opsio's managed optimisation implements continuous cost improvements across AWS, Azure, and Google Cloud.
We start with a comprehensive cost assessment, then implement right-sizing, reserved capacity, and governance. Ongoing monitoring prevents regression and identifies new savings monthly.
Learn about cost governance or contact us for a free assessment.
Frequently Asked Questions
What is cloud cost optimisation?
The ongoing process of reducing spending while maintaining performance through right-sizing, reserved pricing, waste elimination, and governance.
How much can optimisation save?
Typically 20-35%. New-to-optimisation organisations often find 25-30% immediately.
How often should I optimise?
Continuous monitoring with monthly reviews, quarterly right-sizing, annual reserved planning.
What tools help?
AWS Cost Explorer, Azure Cost Management, Google Cloud Cost Management, CloudHealth, Spot.io, Kubecost.
What is the difference between optimisation and management?
Optimisation reduces costs. Management covers visibility, allocation, budgeting, and governance broadly.