Fortune 500 Energy Company
Cloud cost optimization program delivered $3.6M in annual savings without compromising performance
A Fortune 500 energy company had migrated to the cloud two years prior but was spending 40% more than projected. We conducted a comprehensive cloud optimization engagement that reduced costs by $3.6M annually while improving performance and reliability.
The Challenge
The energy company had completed a rapid cloud migration driven by a data center lease expiration. The migration was successful in that all workloads were running in AWS, but the rush had resulted in oversized instances, no reserved capacity commitments, minimal use of cloud-native services, and no cost governance framework. Monthly cloud spend was $1.2M and growing at 15% quarterly — a trajectory that would blow the IT budget within a year. Multiple teams had AWS accounts with no centralized visibility or control.
Our Approach
We started with a complete inventory and cost analysis across all 23 AWS accounts. We built a unified cost dashboard using AWS Cost Explorer and custom tagging that mapped every dollar to a business unit, application, and environment — providing visibility that had never existed.
The optimization program addressed four layers:
Right-sizing: We analyzed utilization data across 1,400+ instances and identified that 60% were significantly oversized. We right-sized in waves, starting with development and staging environments (lower risk) and moving to production after establishing confidence.
Commitment optimization: Based on stable baseline usage patterns, we purchased a mix of Reserved Instances and Savings Plans that covered 70% of compute costs, delivering immediate savings.
Architecture optimization: We identified workloads that could be migrated to more cost-effective services — moving batch processing to Spot Instances, transitioning several always-on workloads to Lambda, and replacing self-managed databases with RDS.
Governance: We implemented automated tagging enforcement, budget alerts, and a cloud cost review cadence. Every team now sees their cloud costs weekly and is accountable for optimizing their footprint.
We also established a FinOps practice within the IT organization — a dedicated function responsible for ongoing cost optimization with clear KPIs and executive reporting.
The Results
$3.6M annual savings — a 25% reduction in cloud spend, achieved within 4 months of engagement start.
Cost growth reversed — quarterly cloud cost growth went from +15% to -3%, stabilizing at the new baseline.
Zero performance degradation — right-sizing and architecture changes were validated against performance benchmarks before and after optimization.
Full cost visibility — every dollar of cloud spend is now tagged and attributed to a business unit, with weekly reporting and anomaly detection.
FinOps practice established — the internal team now manages ongoing optimization independently, maintaining savings and capturing new opportunities.
Governance framework — automated guardrails prevent the cost sprawl that caused the original problem from recurring.
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