Cloud Cost Analysis

Cloud cost analysis is the process of examining and understanding the costs associated with your cloud infrastructure. It includes monitoring things like how much you are spending on specific services or resources, areas where you're overspending, and finding opportunities for cost control.

Why is cloud cost analysis important?

Cloud cost analysis is a crucial aspect of any business that uses cloud infrastructure. Here are a few pointers that would help you understand the importance of the same;

  1. Clarity: Cloud cost analysis provides visibility into the costs associated with cloud services, which can help your business better understand resources and manage cloud expenditures.
  2. Cost cutting: By identifying areas of high cost, businesses can take active steps to optimize cloud usage and reduce costs. It could include things like consolidating resources, using reserved instances, or removing unused resources.
  3. Budgeting and forecasting: Businesses can also budget for future cloud expenses and forecast costs based on current usage patterns. We will be seeing more on this in further sections.
  4. Identifying areas of waste: Cloud cost analysis also helps businesses recognize and eliminate areas of waste, such as idle, misconfigured, or over-allocated resources.
  5. Take better control: With an understanding of the costs and usage of cloud services, you can make more informed decisions about where to allocate resources and invest in new technologies.

How can businesses use different tools and services to monitor cloud costs?

Businesses can use several cloud management tools to monitor and save their cloud expenses. Based on the solution you use, here are a few tools that you can use.

  1. Native cost management tools: The majority of cloud service providers like AWS, Azure, and Google Cloud, offer their own cost management features that allow businesses to monitor and manage their cloud expenses. These tools provide detailed reports related to usage and expenses and allow for cost allocation.
  2. Third-party cost management tools: Also several third-party tools out there provide state-of-the-art cost management solutions, such as detailed cost reporting, cost optimization guidance, and multi-cloud cost management.

Native tools that you can use:

  1. AWS Cost Explorer: It helps business owners or cloud architects to visualize, understand, and manage their costs of AWS cloud. It provides a detailed view of usage and cost data as well as the ability to create custom reports and alerts to optimize cost management. It also enables users to identify and eliminate unnecessary or underutilized resources, resulting in cost savings.
  2. Azure Cost Management: It helps businesses optimize and manage their Azure spending. The tool provides several features such as cost analysis, budgeting, and spending alerts to help people stay within their budget and identify cost-saving opportunities.
  3. Google Cloud's Cost Management: It is a set of tools provided by Google that allows users to monitor, forecast, and control their costs associated with the use of Google Cloud resources.

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How to conduct cloud cost analysis?

Conducting a cloud cost analysis can be a complex process, but it is an essential step in ensuring that your organization is using cloud resources efficiently and effectively.

Here are the steps that you can follow to get started:

✅ Gather necessary cloud data

✅ Analyzing the data gathered

✅ Identifying areas of waste

✅ Finding opportunities to optimize

✅ Reporting the findings

The first step in doing cost analysis is collecting the right set of information on your business's cloud usage. It includes details about the types of resources, the quantity of those resources, and how much they cost. You can gather this information from your cloud provider's dashboard as well as from third-party tools and services that can help you track and analyze cloud usage.

Once you have the data, you can start analyzing it to identify patterns and trends in your cloud resource usage. You can break down that by department or team, look at usage over time, or by resource type. You can also visualize the data using various tools to make it easier for everyone to understand.

Then, find resources that are not being used to their full potential, used for non-business purposes, or that are no longer required. By identifying these kinds of resources, you can take steps to optimize your usage and reduce costs.

You can also identify ways to scale resources up or down as needed, automate resource allocation and management, or take advantage of specific features and services to manage your cloud the right way.

Once you are done with your analysis, it is important to share the findings with the key stakeholders within your company, like the IT department, board members, or the finance department. By sharing your findings with them, you can ask for support to take necessary action to optimize your resources accordingly.

It is important to keep in mind that this is an ongoing process, not a one-time event. As your business scales over time, you will need to continue monitoring and analyzing your usage data to ensure that you are making the most efficient use of cloud resources.

How does tagging and labeling help analyze cloud cost?

Tagging and labeling are great ways for an organization to analyze and optimize its cloud spending. It helps categorize and organize cloud resources and helps businesses understand how resources are being used, and areas where costs can be reduced.

So what is tagging?

Tagging works by adding metadata to cloud resources, such as virtual machines, storage accounts, and databases. These tags are used to categorize the resources by type, department, project, or any other attribute relevant to your organization.

Similar to tagging, labeling is used to group resources together based on common traits between them. For example, you can use labels to group all resources that are associated with a specific application or project, or a specific team or department.

Once you have tagged and labeled your cloud resources, you can use that information to analyze your cloud costs.

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Importance of forecasting and budgeting to manage cloud costs

Forecasting and budgeting are important tools for managing cloud costs because they allow you to plan and make informed decisions about how to best use your resources.

Forecasting involves looking at past usage patterns and trends to predict future usage and costs. This can help you identify potential cost spikes before they happen, so you can take steps to prevent them. For example, if you notice that your costs tend to go up during certain times of the year, you can include that in your plan and allocate more resources to meet that demand.

Budgeting, on the other hand, is the process of setting financial limits and allocating funds for different expenses. It helps you stay within your budget and avoid overspending on cloud costs. For example, you can set a monthly or yearly budget for your cloud costs and monitor the usage.

How frequently a business should monitor their cloud costs and usage?

It's better if businesses monitor their cloud costs and usage regularly, ideally at least once a month. Practicing this will allow them to find any unexpected spikes in spending early and take necessary steps to address them before they become a big issue.

Why should a business analyze their cloud costs and how to do it?

Cloud computing has become an integral part of modern business operations, but it also comes with costs. As businesses continue to rely on cloud services to store and process data, it's important to have a clear understanding of these costs in order to make smart financial decisions.

Few ways you can visualize the cost associated with your cloud services, so that as a business you can better understand your expenditure.

Cost center or business unit: Categorizing cloud costs by the specific business unit or department that incurs them.

Application, system, or service: By going granular, you can map the cloud costs by specific application or system using them. You can get an overview of whether to run the specific system or not.

Product or engineering team: This will tell you which team owns a particular service and how much cloud costs each incur. With this, you can have an idea of how cloud usage is spread across teams.

Environment: Dividing cloud costs based on the environment in which resources are being used (e.g. development, staging, production).

Region or location: You can also go further by segmenting cloud costs by the geographical region or location where resources are being used. And cut down where it’s not providing any returns for your business.

You can also go further by analyzing costs by project, team member, resource type, and more.


Get a clear, comprehensive view of your cloud costs with our detailed reports. You can drill down into specific areas of spending, and see how your costs are changing over time.


Stay on top of your cloud costs by getting notifications when unexpected spikes in spending occur. You can quickly identify and investigate any unusual activity, so you can take action to keep your costs under control.


Get a comprehensive view of your cloud assets and usage. With this feature, you can easily navigate and understand your cloud environment, identify underutilized resources, and make informed decisions about scaling and optimization.

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