Imagine that you receive your monthly cell phone bill, and you are shocked to see how much you\u2019re spending for your family-service plan. A quick check of the bill\u2019s details reveals one especially high-cost element: Your children are streaming a lot of television shows.\nRealizing this fact, you might decide to set up a new plan with your cellular service provider that includes more data. A better approach, though, might be to just tell your kids to stop streaming so many TV shows.\u00a0 Or to use WiFi instead.\nAt a grander scale, this scenario is similar to one faced by companies that subscribe to public cloud services. It\u2019s possible to dissect your cloud services bill and identify ways \u2013 say, by reserving instances rather than purchasing instances on demand \u2013 to cut your costs. Indeed, there are vendors that do exactly this type of bill analysis, and then recommend cost-reduction strategies.\nAs with the cell phone example, however, finding cheaper ways to keep doing the same things can miss the bigger picture. What if you\u2019re doing the wrong things to begin with?\nWe touched on this issue in an earlier post that discussed the ins and outs of reserving cloud instances. As we noted then, it makes no sense to lock yourself into reserved instances without first determining what types of infrastructure performance and capacity your applications actually require.\nTrue, moving your existing cloud operations from pay-as-you-go instances to reserved instances might cut your bills by 30% or so. That might seem like a compelling number, but may actually limit your potential savings.\nBefore making a decision to reserve instances or not, you should first go through several preliminary steps. The first step, of course, is to leverage workload analysis tools such as those offered by Densify to determine the actual needs of your applications, and the service levels they must support.\nWith that requisite knowledge in hand, you can then move through several other decision points \u2013 each of which can significantly reduce your costs and\/or improve the efficiency and performance of your cloud-based apps. Those steps include:\n\nRight-sizing your cloud instances, perhaps by moving from large instances to medium-sized instances.\nDetermining the best instance \u201cfamilies\u201d to match your applications\u2019 characteristics, or possibly purchasing customized instances. As we\u2019ve noted elsewhere, Amazon Web Services offers instance types that are optimized for general-purpose, compute-intense, memory-intensive, and other application types.\nChoosing the proper instance types and sizes for scale groups, databases and other advanced services\nTaking advantage of the option to stack multiple containers within single cloud instances.\n\nEach one of these steps can save from 10% to as much as 80% on some application deployments. Only after these decisions are made should you \u2013 as a last step \u2013 determine whether it makes sense to also reserve instances for additional savings.\nUnless you purchase premium-priced convertible instances, you\u2019ll still end up locked in to reserved instances for the term of your contract. But you\u2019ll be getting the reserved instance savings on top of the other savings you\u2019ve already gained in via your application and cloud optimizations.