La Cloud cost optimization It is the continuous process of reducing unnecessary spending without compromising performance. Did you know that organizations waste an average of 32% of their cloud budget on overused or inactive resources? With the right strategies (from rightsizing to adopting the FinOps framework), it is possible to recover that capital and reinvest it in innovation.
More and more companies in Chile and LATAM are migrating their operations to the cloud. They do it for valid reasons: agility, scalability, and access to cutting-edge technology. But there is a problem that almost always arises after the first few months: the cloud bill grows faster than the value it generates.
According to IBM, organizations waste approximately 32% of their spending on cloud services. For a company that invests $100,000 monthly in infrastructure, that amounts to $32,000 disappearing without generating a return. Annually, that number exceeds $380,000.
The good news is that this problem has a solution. Cloud cost optimization is not about cutting capacity or sacrificing performance. It’s about spending wisely: allocating resources where they are truly needed, eliminating silent waste, and building an organizational culture focused on financial efficiency in the cloud.
In this article, we will break down the main challenges that technical teams face when managing cloud costs, the most effective strategies to optimize them, and the tools available today to do so systematically.
What is cloud cost optimization?
Cloud cost optimization is the set of strategies, practices, and tools that allow an organization to reduce its cloud spending without compromising the performance, security, or availability of its applications and services.
It is a continuous process that requires visibility, governance and ongoing adjustments as the infrastructure evolves. Cloud cost optimization is about controlling cloud spending through smart decisions, not through restrictions that hinder operations.
Why is it so difficult to optimize cloud costs?
Before discussing solutions, it is important to understand why this problem persists even in organizations with strong technical teams. The main obstacles are:
Lack of visibility on actual spending
As cloud adoption grows, tracking spending becomes increasingly complex. Finance teams need to associate each cost with a specific project, team, or initiative, but vendor dashboards do not always provide that level of granularity.
Overprovisioning by engineers
It is common for technical teams to provide more resources than necessary to avoid performance issues. An extra here, another there. And before they realize it, the waste accumulates at scale.
Unexpected expenses due to lack of controls
Without clear governance policies, any team can provision resources without oversight. The result: cost anomalies that are difficult to explain and even harder to reverse.
Lack of cross-cutting responsibility
When finance, product, and engineering operate in silos, no one has a complete view of spending. Without that shared vision, it is almost impossible to make well-informed decisions.
Inaccurate projections for committed discounts
Options like Reserved Instances or Savings Plans offer significant discounts, but they require future commitments. Without reliable projections, companies often misallocate their resources and end up paying for capacity they do not use.
Key strategies for optimizing cloud costs
So, what can be done? We share some strategies to optimize cloud costs.
Resource optimization
Implement autoscaling based on real demand
Autoscaling automatically adjusts computing resources based on actual traffic and load. This eliminates the cost of maintaining idle capacity during low-activity hours. Northflank (2026) estimates that properly configuring autoscaling can significantly reduce waste in production environments.
Use ephemeral environments for temporary needs
The development and staging environments that run 24/7 can represent up to 70-80% of the development infrastructure cost.. Ephemeral environments are activated when needed and turn off by themselves when not. A simple solution with a direct impact on the bill.
Rightsizing: adjusting instances to actual usage patterns
Rightsizing involves analyzing the actual usage of CPU, memory, and network to adjust the size of instances. Many organizations run instances that are 50-100% larger than necessary. Reviewing the usage history from the past few months is the first step in identifying adjustment opportunities.
Spot Instances and preemptible VMs for non-critical workloads
Spot Instances offer discounts of up to 90% compared to on-demand pricing. They are ideal for interruption-tolerant workloads: CI/CD pipelines, batch processing, and especially, training AI/ML models. For GPU workloads, savings can reach 70-80% compared to on-demand pricing.
Monitor and shut down inactive resources
Between 15% and 25% of typical cloud resources are completely inactive: stopped instances that still incur charges, load balancers with no traffic, forgotten databases. Identifying and systematically eliminating them is one of the adjustments with the greatest impact and least complexity.
Optimization of data storage and transfer
Storage is a silent source of unnecessary spending. Three concrete actions:
- Choose the appropriate storage tier based on access frequency: Historical data does not need to reside in hot storage.
- Regularly clean up unused data and volumes: Accumulated snapshots of terminated instances can lead to ongoing charges.
- Minimize cross-region and egress transfers: Keeping related services in the same region significantly reduces these costs, which often come as a surprise on the monthly bill.
Financial and governance strategies
Understand the pricing models of each supplier
AWS, Azure, and GCP have different pricing structures, and within each, multiple options: on-demand, reserved, spot, savings plans. Understanding them in depth is essential for making efficient purchasing decisions.
Use Reserved Instances strategically
For predictable and stable workloads, Reserved Instances offer discounts of between 30% and 75% compared to the on-demand price. The key is to purchase only what will actually be used: overcommitting generates the same waste as not committing at all.
Establish cost governance with budgets and alerts
Defining budgets by team, project, and environment (with automatic alerts when thresholds are exceeded) turns cost management into an operational practice rather than a quarterly emergency review.
Implement consistent resource tagging
Tagging resources by team, project, and environment is the foundation of any cost attribution strategy. Without tags, it is impossible to know who generates what expense. With well-implemented tags, accountability becomes visible and actionable.
Develop cost plans at the application level
Measuring the specific cost of each application or workload allows for the calculation of the total cost of ownership (TCO) of the cloud infrastructure and enables more accurate decisions about where to invest and where to cut back.
Adoption of the FinOps framework
FinOps is the practice of cloud financial management that enables organizations to maximize business value in hybrid and multicloud environments. Its essence: bringing financial accountability to the cloud through cross-functional teams that integrate IT, finance, and engineering.
The FinOps framework operates in three phases:
- Inform: Generate accurate and up-to-date visibility on spending. Without correct allocation data, benchmarking and projections are useless.
- Optimize: Act on the data. This includes the use of reserved capacity, automated rightsizing, and the removal of unused resources.
- Operate: Continuously measure speed, quality, and cost against business objectives. In this phase, the FinOps culture is established, and optimization is part of the daily workflow.
According to the FinOps Foundation, a mature FinOps practice manages to allocate more than 90% of cloud spending and reduces the variance between projected and actual spending to approximately 12%.
Tools for Cloud Cost Optimization
What tools are the most commonly used for cloud cost optimization?
IBM Turbonomic
IBM Turbonomic is a hybrid infrastructure optimization platform that automates critical actions in real-time to ensure the most efficient use of computing, storage, and network resources. Unlike tools that only generate recommendations, IBM Turbonomic can autonomously execute adjustments, eliminating the need for constant manual intervention.
AWS Cost Optimization Hub and the Cost Efficiency metric
AWS recently introduced the Cost Efficiency metric within the Cost Optimization Hub, designed to answer a fundamental question that many teams struggle to clarify: how efficient are we with our cloud spending?
The formula is straightforward:
Cost efficiency = [1 - (Potential Savings / Total Optimizable Expenditure)] × 100%
This metric consolidates rightsizing, cleaning of inactive resources, savings from commitments, migration opportunities, and storage optimization into a single indicator. It is updated daily, maintains up to 90 days of history, and can be analyzed by AWS account or region. According to AWS (2025), organizations that improved their efficiency score from 60% to 82% in six months achieved annual savings of $4.6 million.
Wiz Cloud Cost
Wiz Cloud Cost unifies the visibility of cloud and AI costs in a single dashboard for AWS, Azure, and GCP environments. Its differentiator lies in the context: by integrating cost data with the Wiz Graph —a comprehensive map of the cloud infrastructure— it allows users to identify not only which resources are expensive, but also why, and what impact removing or modifying them would have.
Its key capabilities include:
- Waste identification: inactive VMs, unattached volumes, overprovisioned resources.
- Cost allocation to teams and projects through projects and RBAC.
- Granular recommendations based on relationships between resources and levels of actual utilization.
- Cost Monitors for automatic alerts for spending anomalies.
- Agentless deployment that provides visibility in minutes without changes to the existing infrastructure.
The real value of optimizing costs in the cloud
Reducing cloud waste is not just an operational improvement. Its benefits are strategic:
- More efficient infrastructure: Resources are scaled according to real needs, not perceptions. The result is a lower likelihood of bottlenecks and better overall performance.
- Greater clarity on spending: Knowing which projects and equipment generate what costs allows for more informed investment decisions.
- Stronger competitive position: Operating with lower infrastructure costs frees up capital to innovate or improve pricing against the competition.
- More predictable budgeting: With visibility and governance, unexpected cost overruns cease to be a constant threat.
The time to act is now
Cloud spending doesn't stabilize on its own. As teams grow, projects multiply, and AI workloads increase, the bill scales with them, and so does the waste, unless there is an active optimization practice in place.
The organizations that establish their foundations of visibility, governance, and continuous optimization today will be better positioned to scale with control, invest intelligently, and compete with a real advantage.
At Acid Labs, we support companies in Chile and LATAM on their journey towards an efficient and scalable cloud infrastructure. From the initial cost audit to the implementation of FinOps frameworks and optimization tools, our team works alongside yours to transform cloud spending into a competitive advantage.
Do you want to know how much you could be saving? Talk to our team.
