Cloud cost overruns are an unfortunate reality for many businesses, often sneaking up on organizations without warning. As cloud services grow in complexity and scale, manual tracking becomes increasingly unreliable, leaving room for inefficiencies and unexpected costs. Common causes of cloud cost overruns include idle resources, over-provisioning, and orphaned assets.
With the right solutions, like Firefly’s built-in cloud cost optimization policies, organizations can take proactive steps to enforce these guidelines. The result is significant savings, better visibility, and the confidence that your cloud spend is aligned with your business needs.
Here’s a look at 8 essential cloud cost optimization policies that can help your organization cut waste, maximize resource efficiency, and save significantly on your cloud spend — followed by a deep dive into each one.
- Enforce Maximum VM Size to Prevent Overprovisioning
- Detect and Prevent Orphaned Resources
- Enforce Auto-Shutdown or Scheduled Stop on Non-Production VMs
- Require Cost-Tracking Tags on All Resources
- Block Public IP Assignments on High-Cost Resources
- Restrict Provisioning to Approved Regions
- Encourage or Enforce Reserved Instance Usage
- Control Snapshot and Backup Storage Costs
Policy #1: Enforce Maximum VM Size to Prevent Over-provisioning and Optimize Costs
One of the most common and costly mistakes in cloud environments is over-provisioning. It's easy to allocate resources that exceed what's actually needed for a given workload. This often happens when developers select larger virtual machine (VM) sizes to be safe, without fully considering the actual resource requirements. But over time, this leads to wasted spend that can quickly add up.
Imagine a developer provisioning an Amazon EC2 instance for a new service. By default, they choose an m5.24xlarge instance, assuming it will provide sufficient capacity for the workload. However, the actual workload only requires the resources of an m5.large.
By implementing a policy to enforce size limits, the organization would have saved thousands of dollars per month on cloud resources, improving cost-efficiency and resource utilization.
How to Configure Maximum VM Size Limits in Firefly
Firefly allows you to customize and enforce maximum instance sizes for your cloud resources, ensuring that over-provisioning doesn't occur. Here’s how you can set up these size limits within Firefly’s platform.
Click on Custom Policy in the Governance section from the Firefly dashboard, which provides centralized policy management. You can select the cloud provider, severity level, and resource type of the policy and use Thinkerbell AI integrated with Firefly for automatic policy generation in Rego.
By implementing these configuration steps in Firefly, you automate the enforcement of VM size limits, reducing the risk of over-provisioning and optimizing cloud costs effectively.
Policy #2: Detect and Prevent Orphaned Resources to Cut Unnecessary Cloud Spend
Orphaned resources are a common yet often overlooked source of unnecessary cloud spending. These resources are still provisioned and running, but they’re not actually being used by any active service or application. Over time, these orphaned assets can accumulate, resulting in hidden waste that contributes significantly to inflated cloud bills.
Orphaned resources refer to cloud assets that are no longer associated with any active workloads but continue to incur costs. These can include Unattached Cloud Storage, Idle Load Balancers, Orphaned Network Interfaces, and Unused Reserved Instances.
For example, a single unattached Cloud Storage costs hundreds of dollars monthly. If you have multiple orphaned Cloud Storage Accounts across several accounts, the costs can easily accumulate into the thousands each month.
How Firefly Helps Detect and Prevent Orphaned Resources
With Firefly’s Governance Page, detecting and managing orphaned resources becomes straightforward. The platform actively scans your cloud environments and identifies these idle resources, providing an easy-to-read report that highlights where cost-saving opportunities exist.
By monitoring and managing orphaned resources, Firefly helps ensure that cloud spend is efficient and aligned with actual usage. This proactive approach not only reduces unnecessary costs but also ensures that your cloud environment remains clean, optimized, and cost-effective.
Policy #3: Enforce Auto-Shutdown or Scheduled Stop on Non-Production VMs to Save on Idle Compute Costs
One of the easiest cloud cost optimization techniques is to cut down on unnecessary cloud spend is by addressing idle compute resources, particularly in non-production environments such as development and testing (dev/test). In many organizations, it’s common to leave virtual machines (VMs) running 24/7, regardless of whether they’re being used. While this may seem like a harmless oversight, the costs add up quickly.
For example, consider a scenario where a team has five development VMs running 24/7, each costing around $0.10/hour to operate (depending on the instance size). Over a month, those five VMs can end up costing thousands of dollars, even if they’re idle for long periods.
By enforcing auto-shutdown or scheduled stop policies, your organization could cut idle compute costs in half, just by ensuring that dev/test VMs are turned off when not in use.
How Firefly Helps Alert Idle Resources
Firefly provides built-in policies to ensure that non-production resources are notified during idle periods, helping you optimize compute costs efficiently.
Firefly helps you take control of your cloud spending, ensuring that idle resources don’t eat into your budget. The ability to set, monitor, and enforce these policies reduces manual oversight and ensures continuous optimization of your cloud infrastructure.
Policy #4: Require Cost-Tracking Tags on All Resources for Better Cloud Cost Visibility and Accountability
One of the most effective cloud cost optimization techniques is to maintain visibility and control over cloud spending is by implementing a comprehensive tagging strategy for all cloud resources. Tags are metadata that you can apply to cloud resources, such as virtual machines, storage volumes, and network components. These tags help categorize and identify resources for billing and cost-tracking purposes.
Imagine a scenario where a company is running multiple instances of Amazon EC2, AWS S3 buckets, and AWS RDS databases for different projects. However, the teams forgot to tag many of the resources with relevant project tags. At the end of the month, the cloud cost report showed a sudden spike in the bill. The finance team couldn’t determine which team or project was responsible for the increased spend because the resources lacked proper tags.
How Firefly Enforces Tagging for Better Cloud Cost Management
Firefly allows you to enforce tags by automatically checking for their presence when resources are provisioned. If a resource is created without the required tags, Firefly will flag it as non-compliant.
By enforcing tagging, Firefly helps ensure that all cloud resources are tracked, accounted for, and optimized for cost. This level of visibility is important for identifying cost-saving opportunities, allocating budgets effectively, and improving cloud cost management.
Policy #5: Block Public IP Assignments on High-Cost Resources to Avoid Unexpected Cost and Security Risks
Exposing resources to the public internet, especially high-cost ones like databases and storage, can lead to unexpected costs and serious security vulnerabilities. Blocking public IP assignments on high-cost resources is a proactive policy that helps safeguard both your budget and your environment.
Exposing cloud resources like databases, storage buckets, and compute instances, to the public internet can result in both unintended costs and security risks.
Imagine a scenario where a cloud database, such as an AWS RDS instance, is inadvertently assigned a public IP. The database starts receiving a large amount of external traffic, either through misconfigured external tools or malicious actors, which leads to unexpected data egress.
How Firefly Prevents Misconfigurations with Public IPs
Firefly’s built-in governance policies allow you to flag the assignment of public IPs on high-cost resources, thereby preventing inadvertent exposure and associated costs.
By configuring this policy, Firefly helps ensure that cloud resources are both secure and cost-effective. With automated monitoring and enforcement, you can reduce the risk of unexpected bills and prevent potential security vulnerabilities from being introduced into your environment.
Policy #6: Restrict Provisioning to Approved Regions to Optimize Cloud Spend Based on Pricing Differences
While it may seem convenient to deploy resources in regions that are geographically closer to your users or simply available, it's important to understand that cloud providers often charge significantly different rates depending on the region.
For example, AWS EC2 Instances in regions like US East (N. Virginia) might cost more than the same instance type in US West (Oregon). This is due to the higher demand and the cost of operating data centers in the East.
How Firefly Policy Enforces Regional Restrictions
Firefly helps organizations optimize cloud costs by ensuring that resources are only provisioned in approved regions. You can easily create a regional restriction policy in Firefly.
By using Firefly’s regional restriction custom policies, organizations can automatically enforce cost-saving strategies across their cloud environments, preventing deployments to high-cost regions.
Policy #7: Encourage or Enforce Reserved Instance Usage to Maximize Cost Savings on Steady Workloads
For workloads that are predictable and stable over time, reserved instances (RIs) or committed use discounts present an excellent opportunity to reduce cloud costs significantly. By committing to a specific resource for a longer term, organizations can benefit from substantial discounts compared to on-demand pricing, making it a highly effective strategy for optimizing cloud spend.
When a company is running an EC2 instance on-demand 24/7 in for a typical workload like a development server or test environment, switching to Reserved Instances would save hundreds of bucks for a single instance. This saving becomes even more significant when applied to multiple instances or larger workloads.
How Firefly Policy Nudges On-Demand Provisioning When Reserved Instances Are Preferred
To ensure your organization maximizes savings through Reserved Instances, Firefly provides the ability to nudge the use of Reserved Instances for certain workloads. Firefly can helps optimize cloud spending by encouraging Reserved Instance usage with custom policies.
By implementing this policy with Firefly, your team can ensure that the majority of steady-state workloads are always provisioned with Reserved Instances, drastically reducing cloud costs and improving overall resource management.
Policy #8: Control Snapshot and Backup Storage Costs by Managing Retention and Lifecycle Policies
While snapshots are essential for protecting your data and ensuring business continuity, uncontrolled snapshot retention can lead to ballooning storage costs over time. Without proper management, you could end up storing redundant or outdated snapshots that are no longer needed, leading to unnecessary expenses.
Snapshots are a point-in-time copy of your resources, such as EC2 instances, disks, or databases. Cloud providers typically charge based on the amount of storage used, so snapshots can accumulate significant costs if not carefully managed.
Setting Retention Windows and Lifecycle Management Policies in Firefly
Firefly helps organizations manage snapshot and backup storage costs by enforcing retention windows and lifecycle policies. You can create more granular policies, such as daily snapshots are retained for 7 days, weekly snapshots are retained for 30 days and monthly snapshots are retained for 90 days.
This ensures that older snapshots do not continue to consume valuable storage space, keeping costs in check.
How Firefly’s Built-in Policies Drive Continuous Cloud Cost Optimization and Governance
As organizations scale their cloud environments, managing costs and ensuring governance becomes increasingly complex. Firefly’s built-in policies offer a comprehensive, automated solution for tackling cloud cost optimization and maintaining governance, reducing waste, and improving visibility across your cloud resources. These policies work together seamlessly to ensure that your cloud environments operate efficiently, securely, and within budget, all while adhering to cloud cost optimization best practices.
How Firefly Automates Cost Governance and Reduce Cloud Costs
One of the key challenges in cloud cost optimization is maintaining consistent cost governance. Firefly’s policies automate this process by continuously monitoring your cloud resources, enforcing governance rules, and proactively preventing waste. Here’s how Firefly’s policies drive continuous cost optimization:
- Policy Enforcement: Firefly's policies automatically enforce best practices, such as restricting overprovisioning, preventing orphaned resources, and blocking high-cost deployments in premium regions. With these policies in place, your cloud spend is kept in check without requiring constant manual oversight.
For example, Firefly’s policy that restricts the maximum size of VMs ensures that developers cannot provision oversized instances by mistake, saving costs that would otherwise accrue from underutilized resources. - Proactive Alerts and Notifications: Firefly’s proactive alerting system notifies you of potential cost violations, such as resources running 24/7 without auto-shutdown schedules or snapshots that haven’t been managed according to retention policies.
This immediate visibility into misconfigurations and policy violations allows teams to act swiftly, preventing waste before it becomes a bigger financial issue.
By using Firefly’s built-in policies, you can confidently manage your cloud resources and ensure that you’re only paying for what you truly need, while adhering to industry standards for security, compliance, and governance.
