Cost savings is among the main reasons many businesses are migrating to the cloud. But it’s not just saving on infrastructure that these businesses are dealing with. There is another realm of cost saving opportunities even after migrating.
Cloud computing services are provided primarily in the forms of IaaS (Infrastructure as a Service), PaaS (Platform as a Service), and SaaS (Software as a Service). Additional cloud services that are growing in popularity include FaaS (Function as a Service), STaaS (STorage as a Service), and MLaaS (Machine Learning as a Service).
This blog post will break down exactly where the focus on cloud cost optimization is for each type of cloud computing service.
IaaS (Infrastructure as a Service) Cost Optimization
You might be familiar with or even already utilizing IaaS in the form of Amazon EC2, Microsoft Azure, or Google Compute Engine. In cloud computing, services stack or build upon one another, so IaaS is the most basic service you start off with.
With IaaS, you are “renting” your essential IT resources — servers, virtual machines, storage, network, and more — on a monthly basis.

Image: Gartner
With IaaS, you avoid paying for the cost of buying and managing your own physical servers. You also only pay for what you use, and your cloud provider manages the infrastructure.
However, you and your IT team are in charge of managing your own software (operating systems, applications, and other middleware), so that means you must be precisely aware of your cloud usage as you are paying for what you use.
Idle resources are a huge concern for businesses who are unhappy with their cloud spending. It is important to pay attention to these resources.
Where is cloud cost optimization focused on with IaaS? Typically, virtual machines (VM( and reserved cloud instances.
PaaS (Platform as a Service) Cost Optimization
PaaS, as the name implies, is designed to allow developers to build cloud-based applications with ease. It eliminates the need to manage anything else besides the applications and services that developers create.
Like with IaaS, you don’t need to worry about setting up the servers or managing the storage needed for development. This is great for DevOps teams who are strictly focused on building applications.
With PaaS, your business avoids the expenses and complexities associated with managing software licenses and other development tools. Optimizing IaaS resources is important, but in instances where you don’t have or want virtual machines (VM), cost optimization is diverted elsewhere.
Where is cloud cost optimization focused on with PaaS? Storage, business intelligence (BI) services, database management systems.
Consider, for example, Amazon S3 (Simple Storage Services), which is one of the biggest sources of spending among all AWS offerings and is affected by factors such as API usage and data transfer outside of the AWS region. With an effective cost optimization strategy, you can cut AWS storage costs by 40-60%.
SaaS (Software as a Service) Cost Optimization
Cloud cost optimization for SaaS works a bit differently. For manual optimization, you’d first have to understand what software your company uses and why. If you don’t know what kind of software you’re dealing with, it becomes difficult to manage it along with the associated costs.
It is vital to have complete insight into your cloud environment by monitoring usage and being aware of unused licenses. By having comprehensive knowledge of the cloud environment, you can ensure that your cloud-based subscriptions and services are not going to waste.
Cloud cost optimization for SaaS should also involve deactivating unused accounts, analyzing any inactivity “hotspots,” and checking for cost anomalies. It’s also important to know exactly who has access to your cloud apps as eliminating unauthorized access also keeps your costs low.
Where is cloud cost optimization focused on with SaaS? Subscriptions and services, which must be cost optimized based on status (active, idle) and usage activity.
FaaS (Function as a Service) Cost Optimization
FaaS or serverless computing is seeing growth in both popularity and adoption. By definition, FaaS is quite similar to IaaS and PaaS. In fact, there is some overlapping since the infrastructure part is managed by the cloud provider.
The main advantage of serverless computing is that software development is made easier, typically with reduced time-to-market. Furthermore, when you’re building applications in a serverless environment, your cloud provider handles scaling, compliance, and security.
Your developers and team only use and pay for resources when they need them, all without worrying about infrastructure maintenance and configuration.
Where is cloud cost optimization focused on with FaaS? Resources involved for data processing (e.g. CPU and RAM), IoT services, and mobile or web apps.
Optimizing fully-managed applications in a serverless environment can go further than simply setting budget alerts. Ways to reduce your cloud bills can include optimizing CPU usage, local caching, and improving cold-start times (i.e. executing code after prolonged rest).
STaaS (STorage as a Service) & AI/MLaaS (AI/Machine Learning as a Service) Cost Optimization
STaaS and MLaaS are two additional cloud computing services that can be utilized on a subscription basis. With STaaS, you rent out storage from your cloud provider, and with MLaaS, you pay for machine learning services. This may include the popular DeepMind, Amazing ML, SageMaker, and Azure Machine Learning Studio.
Cloud cost optimization for STaaS would evidently focus on the traffic costs of moving data in and out of the cloud. For MLaaS, optimization would largely depend on the service.
Final Thoughts
Cloud cost optimization should never be an afterthought. Whichever cloud computing service model fits your business, visibility is key. You should be able to explore and take actions on areas that would have the biggest impact on cloud cost savings.
Cloud cost optimization tools like Grumatic give you immediate access to actionable insights and recommendations to optimize your cloud spending. Learn more at grumatic.com!