Ways to Optimize AWS Cost

It’s a known fact that moving to Amazon Web Services (AWS) can provide huge benefits in agility, responsiveness, simplified operations, and improved innovation. But many pre-assume that migrating to the public cloud will lead to cost savings. In reality, AWS cost optimization is harder than you think as the organizations need to implement management, governance, and automation. Otherwise, you won’t even have the slightest idea until the bill actually hits you.

Here are some commonly practiced strategies that can help you combat with your ever-increasing cloud costs and achieve AWS Cost Optimization:

Keeping Track of Reserved Capacity Usage

If you’re not keeping track of your usage and are not completely aware of the capacity in use then you’re asking for big trouble. In-depth research implies that people are not really aware of the proper benefits of RI utilization. RIs offer great deals & discounts, reducing costs by 30-60% and sometimes up to 75% in some cases. You have to know about the details of your usage so that you can take the full benefit of RI. One common misconception is that RIs are only for 24×7 workloads, however, in many cases, RIs tend to be cheaper even if the instance is running for just 75% of the time. In fact, this gives you the ability to use the remaining 25% for development and testing without having to pay on demand pricing for the same.

Underutilized Reserved Instances

Since RIs are all about estimation & planning to make your investment worthwhile, despite their sufficient utilization, your organization may still end up with some idle reservations. You can repurpose them and put to good use elsewhere.
You can reallocate them to totally new projects and applications where they fit in. Else, you could repurpose them to deal with existing workloads which are using expensive on-demand instances in your cloud. Or, if repurposing doesn’t work out for you unused or underutilized RIs can be sold on AWS Marketplace.
A quick tip for aged, unpopular instance types though; they might be hard to sell as the volume on this market varies.

Orphan Snapshots

When we terminate an EC2 instance, by default all attached EBS volumes are deleted as well. But it’s very easy to forget that your snapshots still remain on S3 and continue racking up monthly charges.

Those charges may also be more than you imagine. Although backups are mostly incremental, the initial snapshot is of the entire volume. Moreover, regular subsequent snapshots over a long retention period may require as much capacity as the initial snapshot taken. So, even though S3 is cheaper than general purpose SSD, the monthly savings that we do by deleting orphan snapshots can be as much as those made by deleting the original EBS volume that was associated with them.

In other words, unless you are actually thinking of using orphaned snapshots for creating future EBS volumes, you should delete them as part of your cloud housekeeping. This process is far easier and helps in reducing your AWS cloud cost.

RIs Different Payment methods

AWS basically gives you three different methods for pricing:

  • All Upfront
  • No Upfront which is basically giving a fixed amount of money monthly for RIs, or
  • Partial Upfront which is giving some money up front while the rest is paid in monthly installments

It also allows you to reserve resources so that you can start them whenever required. With the new AWS’ Reserved Instance pricing model, if a reserved resource isn’t in use for a while or it’s not created, you’re wasting a significant amount of money because AWS will still charge you for the reserved capacity. Moreover, if you have no cash flow constraints, you should use the All Upfront option for your purchases to get compound discounts.

However, if we calculate the discounted rates between the All Upfront and Partial Upfront payment options it comes out to be very small. Depending on your financial state, you can switch between All Upfront and Partial Upfront payments without letting it affect the discounted rate too much. On the other hand, the discounted rate is very low in the case of no upfront option.

AWS Cost Optimization via Instance Right-Sizing

Amazon Elastic Compute Cloud (Amazon EC2) provides a wide selection of instance types and sizes. It gives customers the flexibility to right-size compute resources and meet their needs at the lowest possible cost. Amazon EC2 also creates detailed usage data to help determine how to right-size instances more effectively. This, in turn, helps to meet the suitable technical requirements of a given workload.

AWS cost optimization is also possible through CloudWatch. One can analyze the CPU and memory utilization on running instances and downgrade or upgrade the system specifications as per the needs.


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