Oracle cloud

Mastering Oracle OCI Cost Optimization – Top 32 Strategies

To optimize Oracle OCI (Oracle Cloud Infrastructure) costs:

  • Right-Size Resources: Regularly review and adjust compute, storage, and database resources to match actual usage needs.
  • Use Auto Scaling: Implement auto-scaling to adjust resources automatically, ensuring cost efficiency.
  • Opt for Reserved Instances: Reserve instances for long-term, predictable workloads for cost savings.
  • Monitor and Analyze Usage: Utilize OCI’s cost management tools to track and analyze resource usage.
  • Clean Up Unused Resources: Regularly identify and terminate unused or underutilized resources.
  • Optimize Storage: Implement data storage lifecycle policies to manage data storage costs effectively.

Introduction to Oracle OCI Cost Optimization

Oracle OCI Cost Optimization

Cost optimization is a cornerstone for operational efficiency and strategic financial management in the cloud computing landscape, particularly in Oracle Cloud Infrastructure (OCI).

Effective cost optimization strategies help organizations maximize the value of their cloud investments while maintaining the desired performance and scalability.

  • Importance of Cost Optimization: In OCI, cost optimization is crucial for aligning cloud spending with business objectives and ensuring that resources are used efficiently.
  • Challenges in Cost Management: Navigating the complexities of OCI, including its diverse services and pricing models, presents challenges in maintaining cost-effective operations.
  • The Role of Cost Optimization: Proper cost management in OCI reduces expenses and enhances performance and strategic resource allocation.

Oracle OCI Cost Challenges

As organizations embrace public cloud solutions for their agility, scalability, and innovation capabilities, managing cloud costs effectively has become a significant challenge.

Here are the fundamental difficulties that organizations often encounter:

  1. Complex Pricing Models: Public cloud providers offer complex and varied pricing models, making it challenging for organizations to understand and predict costs. These models may be based on different metrics, such as data storage, data transfer, or computing power used, and can change depending on the region or specific cloud service.
  2. Lack of Visibility and Governance: Organizations often struggle with visibility into their cloud spending. Without a centralized, holistic view of their cloud usage, it’s challenging to identify where spending is occurring and where it might be excessive. Moreover, without robust governance policies, businesses can find it hard to enforce cost controls and prevent unauthorized or wasteful resource usage.
  3. Overprovisioning of Resources: It’s common for organizations to overestimate their resource needs and overprovision, leading to unnecessary costs. This is often due to a lack of understanding of the workload requirements or an approach of ‘erring on the side of caution’.
  4. Inefficient Resource Management: Many organizations fail to fully leverage the elasticity of the cloud, resulting in unused or underutilized resources. Instances may be left running when unnecessary, storage volumes may not be deleted after use, and unnecessary data transfer can lead to bloated costs.
  5. Decentralized Control: In larger organizations, multiple departments or teams may independently procure cloud resources without centralized oversight. This can lead to duplicate resources, incompatible systems, and an inability to leverage volume discounts or enterprise agreements.
  6. Inadequate Cost Optimization Skills: The public cloud requires new cost management and optimization skill sets. Traditional IT cost management strategies often don’t apply, and organizations may lack the necessary expertise to navigate this new landscape.
  7. Lack of Automated Policies: Automation is key to optimizing cloud costs, but many organizations struggle to implement effective automated policies. These might include automatic shutdowns of unused instances, auto-scaling of resources, or alerts when spending thresholds are reached.

Overcoming these challenges requires a mix of technology, process changes, and skills development.

Effective public cloud cost management often involves implementing robust governance and automation, enhancing visibility into cloud spend, and upskilling teams to maximize the cloud’s unique cost optimization opportunities.

Key Strategies for Oracle OCI Cost Optimization

Strategies for Oracle OCI Cost Optimization
  1. Setting Up Compartment Quota Policies
    • Implementing quota policies is a fundamental aspect of governance in OCI. These policies control resource usage and costs by limiting resource types and usage in individual compartments.
    • Quotas act as safeguards, ensuring that only designated resources are utilized, thereby preventing unnecessary expenditure.
  2. Implementing Cost Tracking Tags
    • In OCI, cost-tracking tags are instrumental in monitoring and managing expenses across different services and compartments.
    • Tags like Finance.CostCenter:xyz or Environment.Type:Production attached to resources allow for detailed and flexible cost tracking. This aids in granular cost analysis and accountability.
  3. Defining Budgets and Forecasting
    • OCI’s budgeting tools enable organizations to set spending thresholds, helping in proactive financial management.
    • Budgets can be allocated based on various dimensions, such as tags, compartments, or tenancies, providing versatility in tracking and forecasting expenses.
  4. Leveraging Cost Reports and Cost Analysis Tools
    • Utilizing OCI’s cost reports provides a comprehensive breakdown of resource usage and associated costs. These reports are crucial for auditing and invoice reconciliation.
    • Cost Analysis tools in OCI offer visualization capabilities to track, optimize, and forecast spending, enhancing financial planning and resource allocation.

Top 32 Tips on How To Do Oracle cloud cost optimization

Tips on How To Do Oracle cloud cost optimization
  1. Evaluate the Pricing Models: Examine which pricing model best suits your business – a flexible pay-as-you-go or commitment model where you pledge a certain monthly payment. Understanding your usage expectations can help you decide on the most cost-effective model.
  2. Implement an Organizational Compartment Structure: Compartments in Oracle Cloud Infrastructure (OCI) help organize and isolate your cloud resources for usage measurement, billing, and access policies. Set the tenancy to support your business operations, aligning compartments with organizational units or service owners.
  3. Establish Compartment Quota Policies: Implement quota policies as part of governance to control resource usage and costs. Policies can ensure designated resource types are used, and compartment limits are maintained.
  4. Use Cost Tracking Tags: Attach cost-tracking tags to resources for flexible cost tracking. This allows querying cost data using tags as filters instead of compartments, providing flexibility in resource placement and cost data queries. Ensure a robust tagging policy.
  5. Define Budgets: Set budgets to limit your OCI spending or forecast. Budgets are set on cost-tracking tags or compartments to track all spending within those scopes.
  6. Enable Auto Tuning of Block Volume Performance: OCI can automatically tune the performance of detached volumes to the Lower Cost setting, leading to significant cost savings.
  7. Implement Object Storage and Lifecycle Management: Utilize Object Lifecycle Management to reduce storage costs and manage data. This allows the automatic archiving of objects to lower the storage cost and delete unnecessary data.
  8. Leverage Cost Reports: Cost reports provide a detailed breakdown of resources in OCI. These automatically generated reports are helpful for audit or invoice reconciliation.
  9. Track and Optimize Spending with Cost Analysis: Cost Analysis provides visualization tools to track and optimize your OCI spending. The tools allow filtering costs by dates, tags, and compartments and provide cost and consumption forecasts.
  10. Terminate or STOP Unused Resources: Establish a process to identify and terminate orphaned resources. Be familiar with the billing criteria for your compute resources and implement appropriate stopping and terminating practices.
  11. Evaluate Suitable Compute Shapes: Choose the right compute shape based on your workload requirements. Flexible shapes like VM.Standard.E3 or VM.Standard.E4 allows customization of OCPUs and memory, optimizing performance and minimizing cost.
  12. Get Acquainted with Cloud Advisor: Cloud Advisor can monitor your tenancy and recommend cost savings and security improvements. It helps identify potential inefficiencies and offers solutions, helping you maximize cost savings and enhance the security of your tenancy.
  13. Right-Sizing: Regularly review the performance metrics of your instances and resize them if needed. Over-provisioned instances can lead to unnecessary costs.
  14. Automated Scaling: Use the OCI auto-scaling feature to adjust the number of instances automatically in response to changes in demand. This can reduce costs by ensuring you’re only using what you need.
  15. Spot Instances: Consider using spot instances for non-critical or fault-tolerant workloads. Spot instances allow you to use spare capacity at a lower price, which can significantly reduce costs.
  16. Reserve Instances: Consider using reserved instances if you have steady, predictable workloads. Reserved instances can provide a significant discount compared to pay-as-you-go pricing.
  17. Data Transfer Costs: Minimize data transfer costs by keeping data transfers within the same region or your private network as much as possible. Transfers between regions or out of Oracle’s network can incur additional charges.
  18. Database Optimization: Consider using Oracle Autonomous Database, which can automatically optimize capacity based on workload requirements. This can reduce costs compared to manually managed databases.
  19. Storage Class Optimization: Regularly review your storage usage and move infrequently accessed data to lower-cost storage classes such as OCI Archive Storage.
  20. Delete Unused Resources: Regularly clean up and delete unused resources like unattached block volumes, new IP addresses, and idle load balancers. These can accumulate costs over time.
  21. Efficient Use of Load Balancers: Use the smallest load balancer necessary for your workload. You can always resize the load balancer if necessary.
  22. Cost and Usage Tracking Tools: Leverage OCI’s cost and usage tracking tools to get a detailed understanding of where your spending is going. This can help you identify areas where cost savings might be possible.
  23. Policy-Based Automation: Implement policy-based automation to schedule start/stop times for non-production resources based on usage patterns. This ensures resources are only running when needed, reducing overall costs.
  24. Leverage Free Tier and Always Free Services: Oracle provides free services for a certain limit. Make sure you’re utilizing these to their fullest extent.
  25. Negotiate Contract Terms: If you have significant infrastructure requirements, you might be able to negotiate better pricing terms with Oracle.
  26. Understanding Licensing Costs: If using Oracle’s software products on OCI, fully understand the licensing implications. Certain instances might require additional licenses, which could significantly increase costs.
  27. Monitor Performance Metrics: Regularly monitor performance metrics to identify any inefficiencies or areas where resources are underutilized.
  28. Review Architectural Design: Regularly review your overall architectural design. There may be ways to consolidate resources or utilize more cost-effective services.
  29. Training and Certification: Ensure your team is fully trained and certified to use OCI. Understanding the ins and outs of the platform can lead to more efficient usage and cost savings.
  30. Use OCI Resource Manager: OCI Resource Manager can help you manage your resources more effectively, including automating tasks and organizing resources, which can lead to cost savings.
  31. Take Advantage of Volume Discounts: Oracle offers volume discounts on various services. Ensure you’re taking advantage of these if you use services at scale.
  32. Use Oracle’s Cost Estimator: Before deploying new services, use Oracle’s cost estimator to understand the potential impact on your bill.

Remember, the key to cost optimization is a regular review and continuous optimization. It’s not a one-time activity but an ongoing process.

Frequently Asked Questions: Oracle OCI Cost Optimization

How can I manage cost in my OCI tenancy?

Managing costs in OCI tenancy requires a multi-faceted approach. You can leverage tools such as OCI cost analysis, usage reports, and budgets to gain insights into your spending.

Additionally, implementing a compartment structure that fits your organization, setting up compartment quota policies, and using cost-tracking tags can help manage costs effectively.

How do you optimize the cost of cloud computing?

Cost optimization in cloud computing can be achieved through several strategies.

These include selecting the right pricing model, implementing efficient resource management, using auto-scaling and right-sizing instances, taking advantage of reserved instances or savings plans, and continuously monitoring and analyzing your usage and spending.

What is OCI cost analysis?

OCI Cost Analysis is a feature within Oracle Cloud Infrastructure that provides visual tools to track and optimize your spending.

It allows you to filter costs by date, tags, and compartments and forecast future prices and consumption based on your current usage patterns.

What are OCI cost and usage reports?

OCI cost and usage reports provide a detailed breakdown of your Oracle Cloud Infrastructure tenancy resources.

These reports, generated daily, contain consumption information, metadata, and tags for each resource and are retained for one year.

What are OCI budgets?

OCI budgets allow you to set soft limits on your actual or forecasted spending in Oracle Cloud Infrastructure.

When your spending reaches the budget threshold, the platform triggers alerts and sends notifications to designated contacts. Budgets can be set on cost-tracking tags or compartments.

What is a cost analysis report in OCI?

A cost analysis report in OCI is a detailed summary of your spending on Oracle Cloud Infrastructure.

It includes information such as the amount spent on each service, the resources consumed, and forecasts of future costs.

The report can be filtered by various dimensions, including date, tags, and compartments, to provide a granular view of your spending.

What is the pricing model of OCI?

OCI offers several pricing models, including pay-as-you-go and monthly flex.

The pay-as-you-go model charges you for the actual usage with no upfront costs or long-term commitments.

On the other hand, the monthly flex model requires a monthly commitment and offers a significant discount on the pay-as-you-go prices.

How can I manage cost in OCI?

To manage costs in OCI, it’s essential to have a robust governance strategy in place.

This includes setting budgets, regularly reviewing cost and usage reports, implementing compartment quota policies, and using cost tracking tags.

Additionally, use OCI’s cost analysis tool for comprehensive insights into your spending and to identify potential areas of cost savings.

What is User Oracle OCI Cost Optimization?

User Oracle OCI Cost Optimization is a strategic approach to efficiently managing your resources on Oracle Cloud Infrastructure (OCI), aiming to minimize costs while maintaining or improving service delivery.

How can I achieve User Oracle OCI Cost Optimization?

Various strategies include choosing cost-effective instance types, managing storage wisely, and limiting data transfer. Regularly monitoring and utilizing OCI’s monitoring and alerting tools can also contribute significantly to cost optimization.

Does the region of services impact my OCI costs?

Absolutely! Different regions and availability domains can have different pricing. Selecting the most cost-effective location for your services is a crucial step towards User Oracle OCI Cost Optimization.

How do instance types and storage options affect my costs?

Instance types and storage options significantly impact your OCI costs. For example, high-performance instances and storage options cost more than their lower-performance counterparts. Aligning your choices with your actual needs can lead to substantial cost savings.

Which OCI service is the most cost effective?

The most cost-effective OCI service varies based on specific use cases and requirements. Services like Oracle Autonomous Database and Oracle Cloud Infrastructure’s serverless functions are often highlighted for cost efficiency.

How does OCI manage costs?

OCI manages costs through various tools and services, including cost tracking tags, budgets, cost analysis tools, and quotas to control resource usage.

Which 2 features can be used to manage cost in OCI tenancy?

Budgets and cost tracking tags are two key features used to manage costs in OCI tenancy.

Is OCI cheaper than Azure?

The cost comparison between OCI and Azure depends on specific services and use cases. In some scenarios, OCI may offer more cost-effective options, but it varies.

Which factor does not impact pricing in OCI?

Factors like the geographic location of data centers do not typically impact OCI pricing directly.


To effectively optimize costs in Oracle OCI, consider these key strategies:

  • Regular Review and Right-Sizing: Continually assess and adjust your OCI resources to fit actual needs and usage patterns.
  • Budgeting and Cost Tracking: Implement budgeting tools and cost-tracking mechanisms in OCI to maintain financial control and visibility.
  • Embrace Automation: Leverage automation and serverless architectures to manage resources and reduce manual efforts efficiently.

How can Redress Compliance Help?

  • Comprehensive Cost Optimization: We help identify cost-saving opportunities by reviewing your current OCI usage. We suggest optimizations like right-sizing resources, implementing auto-scaling, and efficient use of OCI services.
  • Contract Negotiation and Renegotiation: Our experts will assist you in negotiating or renegotiating your Oracle Cloud contract, ensuring you get the best possible terms and conditions that align with your business needs and budget.
  • Determining the Right Cloud Model: We provide advice and guidance on selecting the most suitable cloud model for your organization, whether Direct, Indirect, Pay-As-You-Go (PAYG), or Annual-Flex. We’ll consider factors like usage patterns, scalability needs, and budgetary constraints to recommend the optimal model.
  • Waste Prevention: Our service aims to prevent wasteful cloud spend by implementing efficient resource management, setting up compartment quota policies, and enabling cost-tracking tags. This helps you to only pay for what you need and use.
  • Continuous Monitoring and Reporting: We offer ongoing monitoring of your OCI spend and usage, providing regular reports with actionable insights to keep your costs under control.
  • Expert Consultation: Our team of Oracle Cloud experts is available for consultation to address any queries or concerns related to your OCI costs, contracts, and overall cloud strategy.
  • Proactive Cost Management: We help set up OCI budgets and alerts to manage your cloud spend and proactively avoid unexpected charges.

Contact us today.


  • Fredrik Filipsson

    Fredrik Filipsson brings two decades of Oracle license management experience, including a nine-year tenure at Oracle and 11 years in Oracle license consulting. His expertise extends across leading IT corporations like IBM, enriching his profile with a broad spectrum of software and cloud projects. Filipsson's proficiency encompasses IBM, SAP, Microsoft, and Salesforce platforms, alongside significant involvement in Microsoft Copilot and AI initiatives, enhancing organizational efficiency.