Cloud computing was supposed to reduce infrastructure costs. For many BC small businesses, the monthly Azure or AWS bill has quietly grown past what equivalent on-premises hardware would have cost, and nobody can quite explain why. Cloud cost overruns have specific, identifiable causes. Here's how to find them and what to do about each one.
The Root Causes of Cloud Bill Shock
Cloud overruns almost always trace to one of four causes:
1. Over-provisioned compute. Virtual machines sized for peak load that never materialises. A VM configured with 16 cores and 64 GB of RAM running at 10% average utilisation is a common find. You're paying for 90% of that capacity to sit idle.
2. Resources running when they shouldn't be. Development and test environments that run 24/7 when they're only needed during business hours. A single forgotten Dev/Test VM in Azure can add $200 - $500 per month. Two forgotten Dev/Test VMs is a bad quarter.
3. Unoptimised storage. Data retained indefinitely at premium tiers (Azure Premium SSD, AWS GP3) when it should age into cool or archive storage. Log files, old database backups, and obsolete snapshots accumulate silently.
4. Data egress charges. Moving data out of the cloud costs money. Architectures that weren't designed with egress in mind can generate substantial surprise charges, particularly when data moves between regions or between cloud and on-premises.
Start with the Free Cost Analysis Tools
Both Azure and AWS include cost management tools at no extra charge. Use them before doing anything else.
Azure Cost Management:
- Set a budget for each subscription and configure email alerts at 80% and 100% of budget. You should not discover overspend at month-end.
- Enable cost allocation tags so you can see spend by project, department, or environment.
- Review the Azure Advisor recommendations, it specifically flags over-provisioned VMs and underused resources.
- Set up a Cost Anomaly Alert to catch unexpected spikes automatically.
AWS Cost Explorer:
- Enable it in your billing console (free, but not on by default for all accounts).
- Use the Resource Optimisation tab to find EC2 instances with low utilisation.
- Set up AWS Budgets with SNS alerts.
- Enable Cost Anomaly Detection, it uses ML to flag unusual spend patterns before they become large bills.
Budget alerts should go to whoever approves IT spending, not just to the engineer who manages the cloud environment.
Right-Sizing Compute
Over-provisioned VMs are the highest-impact cost fix in most environments. The process:
- Pull 30-day CPU and memory utilisation data for every VM from Azure Monitor or AWS CloudWatch.
- Identify VMs with average CPU below 20% and peak CPU below 60%.
- Right-size them to the next smaller tier. For Azure, use the Azure Advisor right-size recommendations as a starting point.
- Schedule dev/test VMs to shut down outside business hours using Azure Automation or AWS Instance Scheduler.
A scheduled shutdown for a Dev VM that runs 8 hours/day instead of 24 hours/day reduces that VM's cost by 67% immediately.
Storage and Data Transfer Cost Reduction
- Lifecycle policies, configure automated tiering for blob/object storage. Data not accessed in 30 days moves to cool; not accessed in 90 days moves to archive. This requires one configuration change and runs automatically.
- Delete old snapshots, VM snapshots accumulate. Set a snapshot retention policy and delete everything older than your retention window.
- Review egress architecture, if you're paying significant egress costs, the architecture may need adjustment. Moving data processing into the same region as the data, or using cloud-native data transfer services, reduces egress charges.
Frequently Asked Questions
How much can a typical 10 - 20 person BC business save with a cloud cost review? The range is wide, but 15 - 30% savings on the existing bill is common after right-sizing and lifecycle policies. Development environment scheduling alone can reduce VM spend by 50 - 70% on affected instances.
Should we move back to on-premises to save money? Rarely. On-premises has hidden costs (hardware refresh, power, cooling, maintenance, risk) that don't appear on the monthly bill. The right answer is usually optimise the cloud spend rather than repatriate workloads.
Talk to a Prince George-based IT team about a cloud cost review, call 672-983-1174 or book a free assessment at northstarit.ca.
Cloud bill higher than it should be?
North Star does cloud cost reviews for BC SMBs on Azure and AWS. We typically find 20 to 35 percent in recoverable waste on the first audit. Get a free assessment.
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Frequently asked questions
How to reduce aws/azure cloud costs for a small business?
Small businesses can reduce costs by first identifying unused resources. Start by shutting down development environments outside of business hours and right sizing instances that are running at low capacity. Utilising tools like AWS Cost Explorer or Azure Advisor provides specific recommendations for cost saving opportunities. Northstar IT also recommends using reserved instances for predictable workloads to secure significant discounts compared to standard on demand pricing.
What are the primary triggers for aws cost overruns?
Overruns typically occur due to a lack of visibility and automated scaling. Forgetting to delete snapshots after terminating instances or leaving high performance databases running during idle periods can cause costs to skyrocket. Implementing strict tagging policies helps teams track exactly which department or project is driving expenses, allowing for better accountability and immediate intervention when spending exceeds the established monthly budget.
Can Northstar IT help audit our current cloud spend?
Yes, our team specialises in cloud cost optimisation for businesses across British Columbia and Alberta. We perform a deep dive into your current AWS or Azure environment to find inefficiencies and misconfigurations. By aligning your cloud infrastructure with your actual business needs, we help you eliminate waste and ensure you only pay for the resources you actively use, keeping your IT budget on track.