How to Optimize Cloud Instance Pricing

5 Mins read
How to Optimize Cloud Instance Pricing

Have you recently moved to the cloud just to find your bill growing every month? You are not alone, as most companies spend more on cloud services than they need to. Understanding and estimating the costs of big vendors like Amazon Web Services, Google Cloud Platform, and Microsoft Azure can be overwhelming.

However, there are several tools and tips to help you optimize your cloud budget. In this article, we will provide you with tips and tools for managing your cloud costs effectively.

AWS, Azure and Google Cloud Overview

AWS, Microsoft Azure and Google Cloud compete for the leadership in the cloud service market. All three giants have advantages that make them suitable for a vast array of use cases. 

What Is AWS?

Amazon Web Services (AWS) offers a comprehensive, easy-to-use computing platform that provides Software-, Platform-, and Infrastructure-as-a-Service (SAPI) solutions, along with a set of tools to help you make the most of each service. AWS cloud-based offerings include computing, storage, database, migration and management tools, security and analytics.

AWS can be used for various use cases such as website, application, and Software-as-a-Service hosting, mobile and social applications, content delivery, academic computing, storage, backup and disaster recovery and even search engines. 


Advantages of AWS

Some of the advantages of using Amazon Web Services are:

  • Cost-Effectiveness—with a pay-as-you go pricing service, without any up-front or long-term commitments.
  • Data Center Management—you don’t need to run or maintain your data center as AWS does it for you.
  • Scalability—you can scale your database capacity up or down as needed with the Auto Scaling feature.
  • Fast Deployments—since it is cloud based, uploading or migrating data or apps takes hours if not minutes.

Multi-region deployment—using Amazon Availabiliy Zones, you can deploy your application in multiple regions around the world with just a few clicks. 

What Is Azure?

Microsoft Azure is a cloud computing service that competes with similar offers from Amazon and Google. It provides a comprehensive set of services, infrastructure and tools including virtual machines, databases, file storage, backups, security and mobile and web services apps.

Azure supports all the major platforms, which means, for example, that you can run Windows or Linux virtual machines. The platform focuses mainly on supporting hybrid environments, through a broad set of capabilities that help reduce network latency and automate configuration.

Advantages of Microsoft Azure

Microsoft Azure offers several advantages such as:

  • Services and Tools for Every Need—more than a hundred end-to-end services, including artificial intelligence, virtual machines, Kubernetes, and a Blockchain Service. Supports almost any language or framework, including Node.js, Java and .NET.
  • Hybrid Solutions—functions such as Azure Stack provide cloud capabilities to on-premises infrastructure, by running Azure services in your datacenter.
  • Intelligence—leverages built-in Artificial Intelligence (AI) services, such as Azure Databricks and Azure Bot Service to provide built-in monitoring, threat detection, automatic patching and backups. 

What Is Google Cloud Platform?

Google Cloud Platform is a public cloud offering, comprised of a comprehensive set of Google’s computing resources offered as services to users. The platform resources consist of globally distributed data centers, made available to customers in the form of Virtual Machines, as a cloud-based alternative to their own physical infrastructure.

GCP offers over 50 SAPI (Software, Platform, and Infrastructure as a Service) offerings, including compute, storage and databases, big data, machine learning, security and management and developer tools.

Advantages of Google Cloud

There are many advantages to usingGoogle Cloud, including:

  • Flexibility—you can combine the services to build your own cloud-based infrastructure.
  • Google Infrastructure—you share the underlying infrastructure that Google uses for Google Search and YouTube.
  • Cost-Effectiveness— since it can bill an activity per second, it results in better cost management.

Cost Optimization for GC, AWS, and Azure

There are several actions you can take to cut costs in your cloud service bill, some of them will require more effort than others. No matter which provider you choose, read on to take a look through several techniques and options to optimize your costs: 

AWS Cost Optimization Techniques

For AWS new users, it is not unusual to find their AWS bill continuing to grow each month. Understanding what you are actually using so you can adapt your capacity to it is the key to optimizing your costs. Some tips to optimize your costs include:

  • Use a Calculator—it is much easier to estimate how much you will pay with a calculator. There are several pricing calculators for AWS both native to AWS and third party.
  • Set up a “Storage Lifecycle”—you can use the Lifecycle Manager to get rid of old snapshots and instances, for example. You can also set a lifecycle policy that moves automatically old files to a cheaper category.
  • Go Serverless—using AWS Fargate, allowing functions to run on a need-to basis.
  • Reserve Instances—discounts for reserved instances vary according to the time of commitment but average around 50% discount for a contract longer than a year.
  • Use AWS Lambda—this function allows you to run functions in the cloud while paying only when they execute. 


There are many things you can do to optimize costs. Nevertheless, since compute costs are the largest part of the bill, it makes sense to start reducing costs for virtual machine usage. Some tips to reduce your Azure bill include:

  • Reserve Instances—VM workloads tend to be static and change little. Therefore, reserved instances can save upwards of 70% on the VM cost.
  • Use Incremental BackupAzure backup works by doing a full initial backup, and then performing incremental backups reducing the load. In addition, it compresses the data, reducing the backup size by 30-40%, helping you lower the costs.
  • Take Advantage of the Azure Hybrid Benefit—companies using Windows Server licenses can apply for this benefit, which gives customers usage rights for Azure VM. This means you don’t get charged for the Windows Server license.
  • Shut Down Non-Producing VMS—you can use Azure scheduling software to shut down VMs that are not currently in production. While it entails a subscription cost, it is usually a fixed cost.
  • Downsize—adapt the VMs to their workload to avoid over-provisioning. By downsizing a VM one size, you can save around 50% of the VM cost. 

Google Cloud Platform

GCP has several features to help you manage your costs, including:

  • Pricing calculator—you can plug the data about what resources you need for your application and get an estimate of costs.
  • Sustained Use Discounts—for Google Compute Engine. This lowers the price of the VM when using them to run a sustained workload.
  • Budget Alert—you can set an alert at a specific amount or when matches the previous month’s budget to keep expenses at bay.
  • Custom Machine Types—can give you the flexibility to pay for the resources your application actually uses instead of paying for excess virtual CPU.

Final Thoughts

Optimizing the costs for your cloud operation is always a concern, as it can make the difference between staying competitive or not. Customers are always looking for a way to cut costs across their IT environments.

Since there is no one-size-fits-all solution, you should start with evaluating your environment to see which are your critical areas, where you are overspending and if you can apply some of the tips mentioned above. While undoubtedly, some solutions are going to be a better fit than others, it is worth looking further into a range of options before you settle on one.

Leave a Reply

Your email address will not be published. Required fields are marked *