Compute Cost Optimization Tool

Calculator Input

Current Hourly Rate ($)

Instance Count

Hours Per Day

Days Per Month

Average CPU Utilization (%)

Average Memory Utilization (%)

Target Utilization (%)

Headroom (%)

Reserved Coverage (%)

Reserved Discount (%)

Spot Coverage (%)

Spot Discount (%)

Idle Shutdown Hours / Month

Autoscaling Savings (%)

Monthly Platform Overhead ($)

Example Data Table

Scenario	Hourly Rate	Instances	CPU %	Memory %	Monthly Total	Optimized Total	Monthly Savings
Sample Production Fleet	$0.48	6	32%	41%	$2,293.60	$1,097.06	$1,196.54
Balanced Reserved Mix	$0.62	4	49%	56%	$1,905.60	$1,356.43	$549.17
Night Shutdown Strategy	$0.35	8	28%	34%	$1,728.00	$846.72	$881.28

Formula Used

Billable Hours = Instance Count × Hours Per Day × Days Per Month
Current Monthly Compute Cost = Current Hourly Rate × Billable Hours
Bottleneck Utilization = max(Average CPU Utilization, Average Memory Utilization)
Rightsize Factor = (Bottleneck Utilization ÷ Target Utilization) × (1 + Headroom)
Optimized Hourly Rate = Current Hourly Rate × Rightsize Factor
Hours After Scheduling = Billable Hours − Idle Shutdown Hours
Hours After Autoscaling = Hours After Scheduling × (1 − Autoscaling Savings)
Blended Discount Rate = (Reserved Coverage × Reserved Discount) + (Spot Coverage × Spot Discount)
Effective Hourly Rate = Optimized Hourly Rate × (1 − Blended Discount Rate)
Optimized Monthly Total = (Effective Hourly Rate × Hours After Autoscaling) + Platform Overhead
Monthly Savings = Current Monthly Total − Optimized Monthly Total
Savings Percentage = (Monthly Savings ÷ Current Monthly Total) × 100

How to Use This Calculator

Enter the current hourly rate for one running compute instance.
Add the number of instances and the average running schedule.
Provide CPU and memory utilization from monitoring data.
Choose a target utilization and reasonable safety headroom.
Estimate reserved and spot coverage with their discounts.
Add monthly shutdown hours and expected autoscaling savings.
Include any fixed platform overhead that remains after optimization.
Submit the form to compare current spend against the optimized scenario.

FAQs

1. What does this tool optimize?

It estimates savings from rightsizing, scheduling, reservation discounts, spot usage, and autoscaling. The tool combines these levers into one monthly and annual scenario.

2. Why use both CPU and memory utilization?

Compute costs are often constrained by whichever resource is busier. Using the higher of CPU or memory helps prevent recommendations that understate real workload demand.

3. What is the target utilization input?

It represents the utilization level you consider healthy after optimization. Lower targets keep more buffer. Higher targets push denser packing but reduce safety margin.

4. Why include headroom?

Headroom protects performance during bursts, deployments, or growth. It prevents the model from shrinking too aggressively when average utilization alone looks low.

5. What happens if reserved and spot coverage exceed 100%?

The calculator automatically limits the combined coverage so it does not pass 100%. This keeps the discount math realistic for the portion of workload being billed.

6. Does this replace cloud billing reports?

No. It is a planning tool for scenario analysis. Use it beside real billing, monitoring, and commitment data to validate which optimization path is most practical.

7. Can I model bursty workloads?

Yes. Use a realistic target utilization, add safety headroom, and adjust autoscaling savings conservatively. That produces a safer estimate for unstable demand patterns.

8. Why is platform overhead kept outside compute discounts?

Some costs stay fixed even after instance changes. Separating overhead helps you see pure compute savings without pretending every surrounding platform expense will fall too.