Understanding and optimizing cloud costs
Cloud platforms such as AWS have been the standard for hosting and running workloads for a long time now. But as usage grows, so does uncertainty: Why are costs rising even though usage seems to remain stable? Many teams eventually face this question.
This article shows how cloud costs arise, where they can get out of hand, and when it makes sense to reevaluate your own cloud strategy or even your provider.
Cloud services are successful because they solve real problems. You no longer need to buy servers, maintain data centers, or keep an IT team on call 24/7. The cloud is fast, flexible, and ready to use for almost any project. This dynamic is particularly valuable for startups or growing teams: resources can be scaled up and down, and new markets can be tapped into without additional hardware.
But the very thing that makes the cloud so powerful also makes it expensive. Because flexibility means ongoing billing. Every gigabyte, every API request, every file transferred has its price. And if we're honest, we know that in everyday life, we often don't have the time to check all this regularly. So we often end up paying for resources that no longer provide real value.
Cost structure in the cloud
Many cloud bills seem harmless at first glance. But when you unpack them, you see that their pricing consists of dozens of individual items - many of which few people truly understand.
- Computing power is the backbone of every application and usually the largest cost factor. Constantly running instances drive up the price.
- Storage space is cheap until you start hoarding large amounts of data. Old backups, log files, and historical data cause hidden costs.
- Data transfer is one of the biggest but least visible factors. While data transfer to the cloud is usually free, outgoing transfers incur traffic fees. Data exchange between different regions of a cloud provider can also incur additional costs.
- Managed services save time, but they also increase dependence on the provider and often come with premium prices.
The cloud isn’t a fixed-price model. It’s a system of countless microtransactions. Every decision in the architecture affects the bill.
Common causes of high cloud costs
Hardly anyone intentionally exceed their cloud budgets. Most additional costs arise gradually, as a result of small decisions that accumulate over time.
- Overprovisioning: Resources are generously dimensioned "to ensure smooth operation."
- Forgotten instances: Test systems or proof-of-concepts remain active.
- Data transfers: Data traffic between cloud regions or frequent transfers between individual cloud services.
- Lack of lifecycle strategies: Old files are never deleted or transferred to more cost-effective storage types.
- Automatic scaling: Well-intentioned, but potentially expensive without limits.
Cloud cost optimization
In many cases, expenses can be reduced by using existing resources more efficiently.
- Right-sizing
Instances and containers should be regularly checked for utilization. Less powerful instances are often sufficient, especially for stable applications. - Commitment-based pricing options
Those who plan workloads for the long term can save significantly with fixed terms. The discount for predictable usage is considerable. - Lifecycle policies
Old or infrequently accessed data can be automatically moved to cheaper storage classes. - Monitoring & Alerts
Targeted monitoring can help make costs visible before they skyrocket. And let's be honest: nothing is more reassuring than a cloud whose expenses you understand.
AWS cost optimization
For FMA, we reviewed existing AWS resources, analyzed cost structures, and optimized the architecture. The result: lower expenses, greater stability, and a clear view of actual resource requirements.
When migration is worthwhile
Sometimes, optimization alone isn’t enough. Especially with stable workloads, high storage costs, or clearly defined performance requirements, a change can be worthwhile. Not because cloud technologies such as AWS are bad, but because they are too big for certain requirements.
Here's what a sensible migration process might look like:
- Analysis: Which services incur the highest costs?
- Provider comparison: It’s not just about price, the provider’s stability, speed, and responsiveness also matter.
- Prioritization: What can be easily migrated, what is critical?
- Pilot project: Test the migration with a non-business-critical part.
- Step-by-step implementation: The migration should be carried out in clearly defined stages with a focus on stability and control.
Conclusion
Cloud technologies such as AWS offer major advantages, from flexibility to scalability. At the same time, it is worth taking a conscious approach to structures and costs.
Regularly reviewing cloud expenses can lead to significant savings, whether through optimization or migration.
