Cloud Cost Optimization is the process of reducing your overall cloud spend by identifying mismanaged resources, eliminating waste, reserving capacity for higher discounts, and right-sizing computing services to scale.

Key strategies include:
1. **Resource Optimization:**
   - Right-sizing instances
   - Shutting down unused resources
   - Using auto-scaling effectively

2. **Pricing Optimization:**
   - Reserved Instances
   - Spot Instances
   - Savings Plans

Reserved Instances (RIs) provide a significant discount compared to On-Demand pricing in exchange for a commitment to use a specific instance configuration for a one or three-year term.

Types of RIs:
<div class="code-block" data-lang="yaml"><div class="highlight"><pre><span></span><span class="nt">Standard RIs</span><span class="p">:</span>

- Highest discount (up to 75%)
- Least flexibility
- Best for steady-state workloads

Convertible RIs:
- Lower discount (up to 54%)
- More flexibility
- Can change instance family, OS, tenancy

Scheduled RIs:
- For predictable recurring schedules
- Match capacity reservation to usage pattern