Definition

There are five focus areas for cost optimization in the cloud:

• Practice Cloud Financial Management

• Expenditure and usage awareness

• Cost-effective resources

• Manage demand and supplying resources

• Optimize over time

Similar to the other pillars within the Well-Architected Framework, there are trade-offs to consider for cost optimization. For example, whether to optimize for speed-to-market, or for cost. In some cases, it’s best to optimize for speed—going to market quickly, shipping new features, or meeting a deadline—rather than investing in upfront cost optimization.

Design decisions are sometimes directed by haste rather than data, and the temptation always exists to overcompensate, rather than spend time benchmarking for the most cost-optimal deployment. Overcompensation can lead to over-provisioned and under-optimized deployments. However, it may be a reasonable choice if you must “lift and shift” resources from your on-premises environment to the cloud and then optimize afterwards.

Investing the right amount of effort in a cost optimization strategy up front allows you to realize the economic benefits of the cloud more readily by ensuring a consistent adherence to best practices and avoiding unnecessary over provisioning. The following sections provide techniques and best practices for the initial and ongoing implementation of Cloud Financial Management and cost optimization for your workloads.