To gain back control, companies are now applying cost management tactics that we can roughly divide into three parts:

Cost visibility – Knowing where the costs come from thanks to a plethora of cost allocation, monitoring, and reporting tools. Real-time cost monitoring is particularly valuable since it notifies you when your cloud starts spiraling out of control. One of Adobe’s teams once generated an unplanned cloud bill of over 500k because of a computing job left running on Azure. One alert could have prevented this.

Cost forecasting – Once you have enough historical data to crunch and an idea of your future requirements, you can estimate how many cloud resources you’ll need and plan your budget. Sounds easy, right? Trust me, it’s a bit of guesswork – even for cloud-native tech giants. Pinterest’s bill exceeded the initial estimates during one holiday seasonbecause people used the platform so much. By then, Pinterest had already committed to paying $170 million to AWS – and then had to get extra capacity at a much higher pricing tier.

Legacy cost optimization is when you bring all your findings from previous steps together to create a detailed snapshot of your cloud spending and identify potential candidates for optimization. Plenty of tools out there help with this, like Cloudability or CloudHeath by VMware, but most of the time, they only give static recommendations for engineers to implement.

Cloud-native cost optimization – Optimizing cloud costs is often a point-in-time activity that requires a lot of time and expertise to balance cost vs. performance. Tools like CAST AI can react to changes in resource demands or provider pricing immediately, opening the doors to more significant savings. 

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