Efficient resource management and monitoring are crucial in Google Compute Engine to prevent performance bottlenecks such as CPU spikes, RAM waste, and network overload. Instances must be correctly sized and workloads optimized to avoid issues like high CPU utilization that can lead to throttling and increased latency. Monitoring tools such as Google Cloud Observability in Grafana Cloud are vital in providing real-time insights and preconfigured alerts for CPU, RAM, and network usage, helping users detect and address inefficiencies proactively. The platform's prebuilt dashboards offer immediate visibility into resource utilization trends, enabling users to right-size instances, manage costs, and ensure optimal performance. Additionally, the system can identify anomalies in network traffic, such as unexpected spikes that may indicate security breaches or misconfigurations, allowing for targeted interventions. Grafana Cloud's tools extend beyond virtual machines to monitor serverless workloads, offering a comprehensive solution for managing Google Cloud resources efficiently.