1. A computer-implemented method for optimizing virtual machine instances in a networked computing environment, comprising: identifying a set of virtual machine (VM) instances in the networked computing environment that are potential candidates for optimization based upon at least one of the following: a performance of the set of VM instances with respect to a set of service level agreement (SLA) terms, or a commonality of an entity associated with the set of VM instances; and optimizing the set of VM instances by performing at least one of the following actions: splitting a single instance of the set of VM instances into multiple instances, or consolidating multiple instances of the set of VM instances into a single instance.