Rightsizing

Rightsizing means making sure cloud resources are the right size for their job. Engineers often choose larger instances than a workload needs, to be safe, to handle a peak that rarely occurs or because they copied a configuration from elsewhere. Once running, these resources are seldom revisited. Rightsizing reviews actual usage of CPU, memory, storage and network over time and changes resources to sizes or types that fit, for example moving from an instance with 16 virtual CPUs running at 10% utilization to one with 4 virtual CPUs.

Rightsizing is one of the most common usage optimization actions in FinOps. It can produce significant savings, but it requires care, since undersized resources can harm performance and reliability. For IT financial management, rightsizing is a key way to reduce cloud costs at their source and should be carried out before committing to long-term discounts, so that commitments cover the right amount of capacity.

Definition of Rightsizing

Rightsizing is the process of analyzing the resource utilization of cloud workloads and adjusting the size, type or configuration of resources to match their actual requirements. It applies to virtual machines, databases, container resource requests, storage volumes and other provisioned resources.

It is part of cloud cost optimization, specifically the usage optimization capability in the FinOps Framework.

What Rightsizing Changes

Downsizing reduces the size of a resource within the same family, such as moving from a large to a medium instance. This is the most common rightsizing action.

Changing instance family or type moves a workload to resources better suited to its profile, for example from a general-purpose instance to a memory-optimized one, or to a newer generation that offers better price and performance.

For containers, rightsizing adjusts CPU and memory requests and limits, which affects how efficiently workloads are packed onto nodes, as discussed in Kubernetes cost allocation.

Data Used

Rightsizing decisions rely on utilization data over a representative period, often several weeks, including CPU, memory, disk and network usage. Short periods can miss monthly or seasonal peaks. Peak usage matters as much as average usage, since resources must handle the busiest periods.

Memory utilization is not always collected by default on cloud platforms and may require monitoring agents. Without it, rightsizing recommendations can be incomplete. A server with low CPU but high memory use may look oversized when it is not, so missing memory data can lead to poor decisions.

Cloud providers and FinOps tools generate rightsizing recommendations based on this data, which teams then review before acting. Recommendations are a starting point, not a decision, since tools cannot know about planned changes or special requirements.

Importance of Rightsizing in IT Financial Management

Oversized resources are one of the most common sources of cloud waste. Because they keep running, the cost of oversizing continues every hour until someone acts.

Rightsizing addresses this at the source. Rather than finding a cheaper way to pay for oversized resources, it removes the unnecessary capacity altogether.

It also improves the basis for other optimization, since commitments and forecasts built on oversized usage lock in or project unnecessary costs.

Savings at the Source

Reducing a resource by one size typically cuts its cost by about half, since many instance families double in price with each size. Across many resources, rightsizing can produce substantial savings.

Moving to newer instance generations can also improve price and performance, giving the same capacity for less money.

These savings apply regardless of pricing model, so they complement rate optimization rather than competing with it. A smaller resource costs less whether it is billed on demand or covered by a commitment.

Sequencing With Commitments

Rightsizing should generally come before buying commitments such as reserved instances or savings plans. Committing to oversized usage locks in waste for one or three years.

Where commitments already exist, rightsizing can lower utilization of instance-specific commitments. Flexible commitments, such as savings plans, are less affected, since savings carry over to the smaller resources.

Coordinating rightsizing with the FinOps team's commitment planning, and tracking commitment utilization, avoids these conflicts.