Why it matters
Cloud bills can be reduced by 30-60 percent without changing architecture, just by applying these levers. That's real money. Getting good at cost optimization is one of the highest-ROI engineering activities.
The architecture
Rightsizing: match instance size to actual usage. Data shows most cloud VMs are 50 percent oversized. Use cloud-native tools (Compute Optimizer, Rightsize Recommendations) or third-party (Densify, Spot).
Reserved capacity: commit to 1 or 3 years for 30-70 percent discounts on baseline capacity. Combine with on-demand for burst.
How it works end to end
Spot / preemptible: use for fault-tolerant workloads. 60-90 percent cheaper. Requires app-level retry logic.
Storage tiering: transition cold data to cheaper storage classes (S3 Glacier, GCS Coldline, OCI Archive) via lifecycle policies. Huge savings for long-tail data.
Idle resource cleanup: stopped VMs still cost for attached storage. Unattached IPs, unused snapshots, forgotten load balancers all accumulate. Automate cleanup.
Cross-region and cross-AZ traffic charges add up. Minimize by locating resources together.