Cloud Cost Optimization - Are You Overpaying for Cloud Services

  • March 27, 2025

Introduction

Cloud computing offers flexibility, scalability, and efficiency, but it also comes with hidden costs that many businesses overlook. While cloud providers like AWS, Azure, and GCP provide cost-saving options, improper configurations and lack of monitoring often lead to unnecessary expenses.

Without regular cost reviews, you could be paying for unused services, over-provisioned resources, or hidden fees buried in your cloud bill. Here’s where most companies unknowingly waste money and how you can identify these leaks before they impact your engineering and development budget.

1. Compute Services (VMs, Kubernetes, Serverless)

Unused or Idle Resources

  • Many virtual machines (VMs) run at low utilization but still cost full price.
  • Some workloads remain active when they should be shut down during non-business hours.
  • Fix: Use auto-scheduling tools to turn off non-essential workloads during off-hours.

Over-Provisioned Instances

  • Choosing high-performance VMs when a smaller instance could handle the workload.
  • Fix: Use built-in cloud tools like AWS Trusted Advisor or Azure Advisor to right-size your instances.

Inefficient Auto-Scaling

  • Scaling up resources automatically but not scaling them down when demand drops.
  • Fix: Adjust auto-scaling policies to ensure downscaling is enabled.

Kubernetes Cluster Sprawl

  • Running too many Kubernetes nodes without proper workload distribution.
  • Fix: Optimize pod scheduling and use cost monitoring tools like Kubecost.

2. Storage Costs (S3, Blob, Google Cloud Storage)

Unused Snapshots & Backups

  • Old backups and snapshots continue accruing costs even when no longer needed.
  • Fix: Set lifecycle policies to automatically delete outdated snapshots.

Expensive Storage Tiers

  • Storing infrequently accessed data in high-performance storage instead of archival options.
  • Fix: Use storage classes like AWS Glacier or Azure Archive Storage for rarely used data.

Data Retrieval Fees

  • Accessing archived data too frequently leads to unexpected retrieval costs.
  • Fix: Plan data access based on frequency and storage tier costs.

3. Networking & Data Transfer

High Egress Fees

  • Transferring data between cloud regions or out of the cloud can incur significant costs.
  • Fix: Consolidate resources within the same region and use CDNs for external traffic.

Unoptimized Load Balancers

  • Running too many load balancers or using premium-tier services unnecessarily.
  • Fix: Regularly audit load balancer usage and adjust to actual traffic needs.

Public vs. Private Networking

  • Using public IPs when private networking would be cheaper.
  • Fix: Optimize network topology to minimize unnecessary public IP use.

Interested in Cloud App Development ? View our Cloud Consulting and Development Services

4. Managed Services (RDS, DynamoDB, BigQuery, etc.)

Oversized Databases

  • Allocating more storage or compute than required.
  • Fix: Scale databases based on real workload demands.

Always-On Databases

  • Keeping database instances running 24/7, even when usage is minimal.
  • Fix: Use serverless or on-demand databases where applicable.

Premium Features That Go Unused

  • Paying for high-availability, multi-zone replication, or performance tiers when not needed.
  • Fix: Audit service configurations to match actual needs.

5. Licensing & SaaS Subscriptions

Underutilized Reserved Instances

  • Committing to reserved capacity but not fully utilizing it.
  • Fix: Track utilization rates and switch to savings plans if usage fluctuates.

Unused Enterprise Support Plans

  • Paying for premium cloud support tiers but barely using them.
  • Fix: Downgrade to standard support if advanced services are not needed.

Conclusion

Cloud services make scaling easier, but they also make overspending easier. Without regular cost reviews, businesses often pay for unused resources, unnecessary premium features, and hidden data transfer fees.Optimizing cloud costs is not about cutting corners—it is about spending smarter. By auditing your compute, storage, networking, managed services, and subscriptions, you can ensure you are only paying for what truly adds value to your business.How often do you review your cloud expenses? If you have not checked in a while, now is the time!

Have Something on Your Mind? Contact Us : info@corefragment.com or +91 79 4007 1108