Cloud computing was supposed to reduce infrastructure costs. For many small businesses, the monthly Azure or AWS bill has grown well past what the on-premises equivalent would have cost. Cost overruns in the cloud have specific, identifiable causes. Here is how to find and fix them.
The Root Causes of Cloud Bill Shock
Cloud cost overruns almost always trace to one of four causes: over-provisioned compute (virtual machines larger than required), resources left running when not needed (development VMs that run 24/7), unoptimised storage (data retained indefinitely at premium tiers), and egress charges that were not anticipated during architecture planning.
Development and test environments are the biggest culprits. Engineers spin up resources to test something, forget to shut them down, and the billing clock runs continuously. A single forgotten Dev/Test VM can add $200 to $500 per month to your Azure bill.
Start with Cost Analysis Tools
Both Azure Cost Management and AWS Cost Explorer are included in your subscription at no extra charge. Use Azure Cost Management to set budgets and alerts - configure an alert when spend reaches 80 percent of budget so you are not surprised at month end. Enable detailed billing export so you can see cost by resource, resource group, and tag.
In AWS, activate Cost Explorer and set up AWS Budgets with email alerts. Use Cost Anomaly Detection to catch unexpected spend spikes automatically. These tools are free and take 30 minutes to configure properly.
Right-Sizing Compute
Over-provisioned VMs are the most common waste category. Azure Advisor and AWS Compute Optimizer analyse your actual CPU and memory utilisation and recommend smaller VM sizes. For most SMB workloads, Advisor will recommend downsizing at least 30 percent of virtual machines. Act on those recommendations.
Move non-production workloads to B-series (Azure) or T-series (AWS) burstable instance types, which cost 50 to 70 percent less than standard compute for workloads that do not need sustained CPU. Development and test environments almost always qualify.
Reserved Instances and Savings Plans
If you have stable, predictable workloads running continuously, Azure Reserved Instances and AWS Savings Plans can reduce your compute costs by 40 to 60 percent compared to on-demand pricing. The commitment is one or three years. Analyse your utilisation over the past 90 days before committing.
Do not over-commit. Reserved capacity you cannot use is wasted money. Start with reservations for your most stable production workloads and expand from there.
Storage and Data Transfer Costs
Storage costs accumulate quietly. Run an audit of your blob storage (Azure) or S3 buckets (AWS): how much data is stored, in what tier, and when was it last accessed. Enable lifecycle policies to automatically move infrequently accessed data to cheaper tiers (Azure Cool or Archive; AWS S3-IA or Glacier).
Data egress - data leaving the cloud to the internet or to your offices - is charged by volume on both platforms. Architectures that move data around frequently can generate substantial egress charges. Review your egress costs in the billing console and investigate any bucket consistently generating egress.