Cloud storage accounts for 30% of total cloud spending for enterprises, according to Gartner.
Many organizations overspend by as much as 40% due to mismanaged storage, unnecessary data transfers, and poor tiering strategies.
Cloud storage cost optimization strategic resource allocation, better data management, and automation.
Table of Contents
Why Cloud Storage Bills Keep Increasing
Cloud storage costs don’t just come from capacity; they stem from hidden inefficiencies that add up over time.
1. Unoptimized Storage Tiers
- Frequently accessed and rarely accessed data are often stored in the same high-cost tier.
- Failing to use automated tiering leads to unnecessary expenses.
2. Egress & Data Transfer Fees
- Cloud providers charge for moving data across regions.
- Cross-zone and multi-cloud storage often results in unpredictable transfer costs.
3. Duplicate & Unused Data
- As much as 20% of enterprise cloud storage is occupied by redundant or stale data.
- Unused snapshots, duplicate backups, and outdated logs increase costs.
4. Over-Provisioned Storage
- Many companies pay for unused capacity, provisioning more storage than necessary.
More than half (53%) of organizations exceeded their cloud storage budgets, with unanticipated egress fees being a significant contributing factor.
Computer Weekly
For better efficiency in Cloud Storage for AI Processing, see our article on Best Tips on Cloud Storage Optimization for AI Data Processing.
Best Techniques for Cloud Storage Cost Optimization Without Reducing Performance
1. Use Intelligent Tiered Storage
Most cloud providers offer automated lifecycle management policies that move data between storage tiers based on usage.
| Cloud Provider | Hot Storage(Frequent Access) | Cold Storage(Infrequent Access) | Archive Storage(Long-Term, Rarely Accessed) |
|---|---|---|---|
| AWS | S3 Standard | S3 Infrequent Access | S3 Glacier |
| Google Cloud | Standard Storage | Nearline Storage | Coldline/Archive Storage |
| Azure | Hot Blob Storage | Cool Blob Storage | Archive Blob Storage |
How it saves money:
A company storing 10 TB of AI training data could cut storage costs by 70% by moving unused datasets to lower-cost tiers while keeping frequently accessed data on high-performance storage.
AWS Storage Pricing
2. Minimize Egress & Data Transfer Costs
Cloud providers charge for data transfers between regions and availability zones.
How to Reduce These Costs:
- Store compute and data in the same region to avoid egress fees.
- Use caching solutions like AWS CloudFront and Google Cloud CDN to reduce repeated retrieval fees.
- Limit multi-cloud storage unless absolutely necessary—cross-cloud data transfers incur steep fees.
Example:
A mid-sized AI startup reduced its cloud bill by 35% after realizing that training datasets were stored in one AWS region while accessed from another.
Google Cloud Storage Best Practices
3. Optimize File Formats & Use Compression
The right file format and compression method can can help with cloud storage cost optimization without affecting performance.
| Use Case | Best Storage Format | Compression Method | Estimated Storage Savings |
|---|---|---|---|
| Structured Data | Parquet, ORC (Columnar) | Gzip, LZ4, Zstandard | Up to 50% |
| Logs & Backups | Avro, Binary Logs | Snappy, Brotli | Up to 40% |
| AI Training Data | TFRecord, NPZ(NumPy) | LZMA, Blosc | Up to 60% |
Real-World Example:
A machine learning team at a leading AI company cut storage costs by 40% by switching from JSON to Parquet for training datasets.
Google Cloud Cost Management
4. Automate Storage Cleanup & Deduplicate Data
Many organizations unknowingly store redundant datasets or outdated snapshots.
How to Fix It:
- Run automated storage audits to detect orphaned files and unused backups.
- Use deduplication tools to prevent multiple copies of the same dataset.
- Set deletion policies for temporary logs, old snapshots, and expired backups.
Real-World Savings:
A cloud analytics firm saved $500,000 per year by implementing automated deletion rules for expired datasets.
AWS Cost Optimization
Conclusion
Most cloud storage costs stem from inefficient data management, excessive transfers, and poor tiering strategies.
Companies that implement tiered storage, optimize transfer costs, compress datasets, and eliminate redundant data can reduce expenses by 30–50% while maintaining performance.
