AWS cost optimization

AWS cost optimization

What is cost optimization?

Cost optimization is a business-focused, continuous discipline to drive spending and cost reduction, while maximizing business value. It includes:

  • Obtaining the best pricing and terms for all business purchases
  • Standardizing, simplifying and rationalizing platforms, applications, processes and services
  • Automating and digitalizing IT.

Why cost optimization?

This cost is impacted by the productivity and efficiency of engineering and manufacturing phase. Cost optimization is one such holistic strategy which identifies the cost elements that have the highest impact on the overall costand implements sustainable techniques to reduce product cost profitably.


Thre are multiple ways to Optamize cloud cost.

1.Right size your services.

With AWS you can right size your services to meet exactly the capacity requirements you need without having to overprovision or compromise capacity. With AWS, you can adapt your services to address actual business needs at any time, with no penalties or incidental fees.

With AWS you can choose services that meet your existing business needs, and as your demands change, you can easily shift to the services option that meets your new requirements. With AWS you can also run multiple service options concurrently, helping you reduce costs and still maintain optimal performance.

This means you can save money by adapting your services to meet your business requirements, and not the other way around.

2. Reserved Instances.

When you buy Reserved Instances, the larger the upfront payment, the greater the discount. To maximize your savings, you can pay all up-front and receive the  largest discount. Partial up-front RI’s offer lower discounts but give you the option to spend less up front. Lastly, you can choose to spend nothing up front and receive a smaller discount, but allowing you to free up capital to spend in other projects.

By using reserved capacity, your organization can minimize risks, more predictably manage budgets, and comply with policies that require longer-term commitments.

3. Use the spot market.

Amazon EC2 Spot instances allow you to bid on spare Amazon EC2 computing capacity. Since Spot instances are often available at a discount compared to On-Demand pricing, you can significantly reduce the cost of running your applications, grow your application’s compute capacity and throughput for the same budget, and enable new types of cloud computing applications.

AWS allows you to scale services for short-term usage and helping you reduce your bill. Since Spot Instances are often available at a discount compared to on-demand pricing, you can significantly reduce the cost of running your applications and lower your operating costs by up to 90% compared to on-demand instances

4. Monitor, track, and analyze your services usage.

You can use Amazon CloudWatch to collect and track metrics, monitor log files, set alarms, and automatically react to changes in your AWS resources. You can also use Amazon CloudWatch to gain system-wide visibility into resource utilization, application performance, and operational health.

With Trusted Advisor you can provision your resources following best practices to improve system performance and reliability, increase security, and look for opportunities to save money. You can also turn off non-production instances and use Amazon CloudWatch and Autoscaling to match increases or reductions in demand.

5. Analyze your costs and usage with Cost Explorer.

AWS Cost Explorer gives you the ability to analyze your costs and usage. Using a set of default reports, you can quickly get started with identifying your underlying cost drivers and usage trends. From there, you can slice and dice your data along numerous dimensions to dive deeper into your costs.

One powerful cost management feature available in Cost Explorer is to filter and group your Cost Explorer data according to your resource tags. Tagging gives you the ability to create resource groups that that match your business structures, making it easier to map your resources and workloads to the appropriate cost center.


6. Turn Off Instances When Not In use.

Automate the start/stop of your EC2 instances on weekends. If you have dev or test environments you would even be better off stopping the instances during non-working hours even on weekdays. Turning them off will help you save immensely on your AWS cloud costs. Make use of resource ‘Tags’ and automate your routine cloud tasks.

7. Use Auto Scaling.

One of the best ways to maximize the benefits of your AWS Cloud is to add Auto-scaling wherever possible. It essentially helps you to reap in the elastic nature of cloud.

Auto-scaling has better fault tolerance and helps in better cost management. Auto-scaling automatically increases the number of Amazon EC2 instances during demand spikes to uphold performance and decrease capacity during a pause to reduce costs.

8. Delete Old AMIs and Snapshots

This is one of the main source of cost wastage on AWS cloud. Snapshots and AMIs are created almost regularly but most of AWS users forget to clean up. Create only the snapshots you need. If you create periodic snapshots, do remember that the snapshots are incremental in nature and the volume of snapshots created will go high and taking a backup of the data will get hectic each time. Make sure to retain only the most recent snapshot in order to restore the volume and delete the older snapshots. This is a great cost optimization practice.


9. Modifying Unused Reserved Instances.

Reserving your instances for 1 or 3 years does not mean that there won’t be any modifications required. As your workload computing consumption vary throughout this year, you may have to modify certain unused reserved instances which may be costing you unnecessarily. Simply by modifying those instances for re-allocation, you can keep your costs under control.

Leave a Reply

Your email address will not be published. Required fields are marked *