The Cost Optimization Hierarchy#
Cloud cost optimization follows a hierarchy of impact. Work from the top down – fixing the wrong tier of commitment discount matters far less than shutting down resources nobody uses.
- Eliminate waste – turn off unused resources, delete orphaned storage
- Right-size – match instance sizes to actual usage
- Use commitment discounts – reserved instances, savings plans, CUDs
- Shift to spot/preemptible – for fault-tolerant workloads
- Optimize storage and network – tiering, transfer patterns, caching
- Architect for cost – serverless, auto-scaling, multi-region strategy
Eliminating Waste#
The fastest cost reduction comes from finding resources that serve no purpose. Every cloud provider accumulates these: instances left running after a test, snapshots from decommissioned servers, load balancers with no backends, unattached disks.