Cloud cost optimization in observability is a significant challenge for IT companies, largely due to the increasing volume of data generated by complex cloud architectures and the intricacies of microservices, which drive up the costs of observability tools. The difficulty in predicting observability costs stems from unpredictable data volumes, complex infrastructures, limited internal changes, and convoluted pricing models of observability tools. Strategies to manage these costs include keeping data in place to reduce the amount of data ingested by observability tools, filtering out unnecessary logs, choosing the right tool that aligns with specific organizational needs, and implementing a strategy for retaining data that includes shifting stale data to cold storage. Platforms like Coralogix, DataDog, and New Relic offer various pricing models and features that cater to different aspects of observability. To optimize costs effectively, organizations should be mindful of the data they ingest and select observability tools that simplify data processing and align with their long-term application goals.