Savings: 30-72% vs On-Demand

Term: 1 or 3 years

Payment: All/Partial/No upfront

Flexibility: Standard or Convertible

Savings Plans

Compute Savings Plans: 66% savings

EC2 Instance Savings Plans: 72% savings

Applies to: EC2, Fargate, Lambda

Flexible across: Instance families, regions, OS

Spot Instances

Savings: Up to 90% vs On-Demand

Best for: Batch jobs, CI/CD, stateless workloads

Risk: 2-minute interruption notice

Strategy: Mix with On-Demand for resilience

S3 Cost Optimization

resource "aws_s3_bucket_lifecycle_configuration" "example" {

bucket = aws_s3_bucket.example.id

rule {

id = "transition-to-ia"

status = "Enabled"

transition {

days = 30

storage_class = "STANDARD_IA"

}

transition {

days = 90

storage_class = "GLACIER"

}

expiration {

days = 365

}

}

}

Azure Cost Optimization

Reserved VM Instances

• 1 or 3 year terms
• Up to 72% savings
• Flexible sizing
• Exchangeable

Azure Hybrid Benefit

• Use existing Windows Server licenses
• Up to 80% savings with RI
• Available for Windows and SQL Server

Azure Advisor Recommendations

• Right-size VMs
• Delete unused resources
• Use reserved capacity
• Optimize storage

GCP Cost Optimization

Committed Use Discounts

• 1 or 3 year commitment
• Up to 57% savings
• Applies to vCPUs and memory
• Resource-based or spend-based

Sustained Use Discounts

• Automatic discounts
• Up to 30% for running instances
• No commitment required
• Applies to Compute Engine, GKE

Preemptible VMs

• Up to 80% savings
• 24-hour maximum runtime
• Best for batch workloads

Tagging Strategy

AWS Tagging

locals {

common_tags = {

Environment = "production"

Project = "my-project"

CostCenter = "engineering"

Owner = "team@example.com"

ManagedBy = "terraform"

}

}

resource "aws_instance" "example" {

ami = "ami-12345678"

instance_type = "t3.medium"

tags = merge(

local.common_tags,

{

Name = "web-server"

}

)

}

Cost Monitoring

Budget Alerts

AWS Budget

resource "aws_budgets_budget" "monthly" {

name = "monthly-budget"

budget_type = "COST"

limit_amount = "1000"

limit_unit = "USD"

time_period_start = "2024-01-01_00:00"

time_unit = "MONTHLY"

notification {

comparison_operator = "GREATER_THAN"

threshold = 80

threshold_type = "PERCENTAGE"

notification_type = "ACTUAL"

subscriber_email_addresses = ["team@example.com"]

}

}

Cost Anomaly Detection

• AWS Cost Anomaly Detection
• Azure Cost Management alerts
• GCP Budget alerts

Architecture Patterns

Pattern 1: Serverless First

• Use Lambda/Functions for event-driven
• Pay only for execution time
• Auto-scaling included
• No idle costs

Pattern 2: Right-Sized Databases

Development: t3.small RDS

Staging: t3.large RDS

Production: r6g.2xlarge RDS with read replicas

Pattern 3: Multi-Tier Storage

Hot data: S3 Standard

Warm data: S3 Standard-IA (30 days)

Cold data: S3 Glacier (90 days)

Archive: S3 Deep Archive (365 days)

Pattern 4: Auto-Scaling

resource "aws_autoscaling_policy" "scale_up" {

name = "scale-up"

scaling_adjustment = 2

adjustment_type = "ChangeInCapacity"

cooldown = 300

autoscaling_group_name = aws_autoscaling_group.main.name

}

resource "aws_cloudwatch_metric_alarm" "cpu_high" {

alarm_name = "cpu-high"

comparison_operator = "GreaterThanThreshold"

evaluation_periods = "2"

metric_name = "CPUUtilization"

namespace = "AWS/EC2"

period = "60"

statistic = "Average"

threshold = "80"

alarm_actions = [aws_autoscaling_policy.scale_up.arn]

}

Cost Optimization Checklist

• [ ] Implement cost allocation tags
• [ ] Delete unused resources (EBS, EIPs, snapshots)
• [ ] Right-size instances based on utilization
• [ ] Use reserved capacity for steady workloads
• [ ] Implement auto-scaling
• [ ] Optimize storage classes
• [ ] Use lifecycle policies
• [ ] Enable cost anomaly detection
• [ ] Set budget alerts
• [ ] Review costs weekly
• [ ] Use spot/preemptible instances
• [ ] Optimize data transfer costs
• [ ] Implement caching layers
• [ ] Use managed services
• [ ] Monitor and optimize continuously

Tools

• AWS: Cost Explorer, Cost Anomaly Detection, Compute Optimizer
• Azure: Cost Management, Advisor
• GCP: Cost Management, Recommender
• Multi-cloud: CloudHealth, Cloudability, Kubecost

Reference Files

Related Skills