Cloud teams waste between 40% and 60% of their infrastructure budget on a false choice: committing to reserved capacity they won't fully use or chasing spot instance savings they can't.
Introduction: The Cloud Cost Optimization Dilemma
Cloud teams waste between 40% and 60% of their infrastructure budget on a false choice: committing to reserved capacity they won't fully use or chasing spot instance savings they can't operationalize. The decision between commitment discounts and spot instances is not a preference. It is a calculation with three variables: workload predictability, failure tolerance, and the operational cost of managing interruptions.
Commitment discounts lock you into capacity for one or three years. You pay upfront or monthly for compute resources whether you use them or not. The mechanism is simple: cloud providers offer 30% to 72% discounts because they can forecast their own capacity planning when customers commit. You save money when your actual usage matches your commitment.
You lose money when usage drops below the committed level because you still pay for idle capacity.
