How to Reduce Cloud Infrastructure Costs: A Practical Guide for Startups

You know the problem well: as you scale operations (yay!), your cloud costs keep rising (nay!). Since time is money for startup CEOs and CTOs, we won’t waste yours and will get straight to the point: in this article, you will learn how to optimize the costs of your cloud infrastructure and its maintenance. 

Where does the bulk of your cloud budget go?

Cloud utilization costs can be divided into two categories.

Cloud Infrastructure

• Compute:
  Virtual machines, containers, and serverless functions.
• Security:
  Firewall devices, DDoS and malware protection, encryption, and traffic inspection.
• Networking:
  VPCs, DNS, load balancers, traffic routing and rules, internet gateways, NAT, data transfer, hosting.
• Monitoring and Logging:
  Logs, metrics, alerts, observability tools, event analysis.
• Storage: 
  Databases, caching layers, object storage (e.g., S3), block storage, file systems

Management and Maintenance Costs

DevOps/Platform Engineering:

• Patching OS and applications on VMs and containers
• Automating scaling, deployment, and rollback
• Managing CI/CD pipelines
• Managing IaC templates (Terraform, CloudFormation)
• Managing resources: start/stop, resize, redeploy
• Backup and restore procedures

Site Reliability Engineering (SRE):

• Monitoring and alert tuning
• SLO/SLI/SLA monitoring and adjustments
• Disaster recovery testing
• Failover simulations and validation
• Incident response
• Observability stack (Prometheus, Grafana, ELK, etc.)

Security/Compliance:

• IAM rights and access policy reviews
• Password, key, and certificate rotation
• Vulnerability scanning and patching
• Firewall and security group rule checks and updates
• Compliance with standards (CIS, ISO 27001, GDPR, etc.)

Data and Database Management:

• Performance optimization (indexes, query tuning)
• Backup validation and monitoring
• Replication and failover management
• Data management (retention, archiving, cleaning)

Networking Operations:

• DNS and load balancer configurations
• Validation of network routes, peering, and ACL rules
• Traffic flow validation and optimization
• Encryption in transit validation (TLS certificates, HTTPS)

Cost Management:

• Cost review and rightsizing
• Reserved resources and savings plans
• Detection of unused resources
• Tagging and budget models by teams/projects

---

When it comes to optimization, startups (and companies in general) may think they need to focus solely on infrastructure costs. In reality, high costs often result from inefficient management.

Manual management processes not only consume time and are prone to errors but also require expensive expertise. Fully or partially automating these processes with proven tools can lead to significant financial savings, naturally accompanied by cloud consumption optimization.

Reducing Cloud Costs: Where to Start?

Depending on your startup’s maturity level, the first step towards reducing cloud costs is leveraging free credits. These credits, offered by leading hyperscalers like Microsoft Azure, AWS, and Google Cloud, unlock access to numerous services and products, from computing and storage to artificial intelligence and machine learning. For example:

• AWS: Through the AWS Activate program, startups can receive up to $100,000 in credits
• Azure: Microsoft offers up to $150,000 in credits to registered startups
• GCP: Early-stage startups can apply for up to $350,000 in credits through the Google Cloud for Startups program.

If you need assistance securing free cloud credits, authorized cloud provider partners like Mainstream can guide you through each step.

Better Cost Management: Tools Give You an Edge

Mature startups often face transparency issues alongside high bills – teams are unclear on where the most money is spent, which resources can be decommissioned, and how consumption changes in real time.
With specialized tools like CloudChecker, you gain detailed insights into your complete cloud consumption, including all resources and services, potential savings projections, and concrete recommendations. These tasks typically fall to DevOps engineers, whose workload is significantly reduced with such tools.

For maximum efficiency, you can entrust the use of CloudChecker and other tools on your infrastructure to a FinOps-specialized partner, ensuring proper implementation while supporting cloud modernization and optimization.

Infrastructure Optimization: Well-Architected Framework

The key focus for startups in the cloud is maintaining and improving application availability. Availability issues often result from poorly designed solutions, leading to… you guessed it… excessive costs.
Infrastructure optimization is an important step towards better performance and cost savings and should be prioritized, especially if you have been using the cloud for a while. Read on to see how an AI startup reduced its AWS cloud infrastructure costs by 30% through optimization.

When optimizing, it is advisable to follow the Well-Architected Framework, based on the following principles: 

• Aligning cloud spending with the value it brings to the business
• Developing cost awareness within the company and teams
• Using only necessary resources
• Continuous optimization

If you need support implementing the Well-Architected Framework, our cloud experts are here to advise you.

To Summarize

When it comes to cloud cost optimization, there are two cost centers to address – infrastructure costs themselves and management efficiency. The first aspect directly depends on the second, making cloud management crucial. It ensures optimal spending and introduces financial discipline in the cloud.
Using tools that handle part of the manual workload of your DevOps engineers, applying proven methodologies, and continuously optimizing infrastructure are the pillars of effective management.

Finally, we would like to emphasize: cloud cost optimization requires ongoing commitment. Only through regular monitoring and timely decisions can you ensure you are getting maximum value for your money – and if you lack the resources to ensure this, we can support you.