AWS cost optimization

10 Best Practices for AWS Cost Optimization

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If you are an AWS user, then you must be aware of some of the essential AWS cost optimization practices. The main objective of Amazon Web Services primarily aims at resource effectiveness by providing the ideal infrastructure solutions within budget constraints. You can hear many headlines stating that businesses are incurring huge expenses in cloud computing.

However, the striking highlight regarding trends in cloud computing expenditures refers to a higher percentage of the expenses being wasted on unused services. On the other hand, some businesses can overestimate resource requirements and invest in provisioning more resources than their requirements. So, you can find AWS users turning to methods such as scheduling, right-sizing, and procuring Reserved Instances to optimize AWS cost.

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Prerequisites for AWS Cost Optimization

Before exploring the best practices for optimization of AWS costs, it is essential to find out the costs of AWS services you use. The AWS Free Tier is a great alternative for customers to explore and try AWS services without any charges. Using the free tier, you can also explore the functionalities of each AWS service that you use, within particular limits.

You should also try AWS cost optimization tools such as AWS Cost Explorer for observing and analyzing AWS costs and usage. The tool can provide default reports for helping you obtain clear visualization of cost and usage at the service, accounts or even resources level. You can try the following steps to strengthen the foundation of your AWS cost optimization process.

  • First of all, you have to start by identifying the notable accounts, where your costs are charged through the “Monthly costs by linked account report”.
  • Now, you have to recognize the top services which are responsible for costs in those accounts. The “Monthly costs by service report” can help you achieve this.
  • Utilize the hourly and resource level granularity and tags for filtering and identification of top resources that consume costs.

As a result, you can obtain a clear impression of your AWS costs and usage. Now, you could start your journey towards the ten best practices for AWS cost optimization.

Also Check: Best AWS Cost Optimization Tips

Top 10 AWS Cost Optimization Best Practices

The scope for optimization of AWS costs is not limited to these three methods. So, you should try to explore other potential methods and tools that can support your AWS cost management. The following discussion presents the top ten recommended best practices for optimizing your AWS costs.

  • Identify EC2 Instances with Low Utilization

The first step in the optimization of AWS costs is to identify the Amazon EC2 instances with low-utilization. The AWS Cost Explorer Resource Optimization tool can help you find EC2 instances that are idle or have very low utilization. You can choose to stop or downsize these instances. The AWS Instance Scheduler can help you stop instances automatically. On the other hand, the AWS Operations Conductor is also capable of automatically resizing EC2 instances.

Both these tools work in accordance to the recommendations report from Cost Explorer. The AWS Compute Optimizer is also a helpful tool that can help you identify instance type recommendations that could not be subject to downsizing. The tool can help you find recommendations for downsizing in or across an instance, families. In addition, you can also find recommendations for EC2 instances that serve as components of an Auto Scaling group or recommendations for removing performance bottlenecks.

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  • Monitoring the Use of Storage

The second important mention among best practices for AWS cost optimization refers to monitoring S3 usage. It is recommended to use the S3 Analytics tool for evaluating the storage access patterns on a specific object data set for 30 days or more.

As a result, it can provide reliable recommendations for certain situations to utilize S3 Infrequently Accessed (S3 IA) storage for the reduction of costs. Users can automate the transfer of objects into a low-cost storage tier through Life Cycle Policies. On the other hand, you could also prefer to use S3 Intelligent-Tiering for automatic analysis and transfer of objects to the relevant storage tier.

  • Purchase Reserved Instances

One of the common techniques to reduce AWS bill is the use of Reserved Instances (RI). It can be useful for the reduction of RDS, ElastiCache, ElasticSearch, and Redshift costs. RIs can offer 42% discounts as compared to on-demand pricing, and you can use them for one year without any upfront payment.

The recommendations provided in AWS Cost Explorer documentation regarding RI purchase recommendations can help you. The recommendations are based on your usage of RDS, ElasticSearch, ElastiCache, and RedShift. In addition, you should also ensure that you adjust the parameters to one year without any upfront payment. However, there are some steps you must take before procuring RIs to ensure effective AWS cost optimization.

  • Identify Low-Utilization Amazon RDS and Redshift Instances

In order to identify the utilization and cost of Amazon RDS, Redshift instances, you have to use the Trusted Advisor Amazon RDS Idle DB instances check. It can help you identify DB instances without any connection in the last 7 days. In the case of Amazon Redshift, the Trusted Advisor Underutilized Redshift clusters check can help in the identification of clusters without any connections for the last 7 days.

If you want to make huge reductions in your AWS bills, check out the Top Ways to Reduce AWS Bill.

  • Locate EBS Volumes with Low-Utilization

The next important mention among AWS cost optimization best practices refers to the identification of Amazon EBS volumes with low utilization. EBS volumes having limited activity, i.e. lower than 1 IOPS per day, for at least 7 days clearly indicates that it is no longer in use.

The Trusted Advisor Underutilized Amazon EBS Volumes Check can help in recognizing these volumes. Furthermore, you should also snapshot a particular volume first and then delete the volumes for reducing costs. The Amazon Data Lifecycle Manager can help in automating the creation of snapshots of EBS volumes before deletion.

  • Use Spot Instances

Amazon EC2 Spot Instances are undoubtedly a reliable option for AWS cost management. Spot instances can help in saving up to 90% of costs, especially in the case of fault-tolerant workloads. Some of the general workload examples, in this case, are big data, web servers, test and development workloads, containerized workloads, high-performance computing (HPC) and CI/CD. You can also utilize EC2 Auto Scaling for launching on-demand and spot instances according to the target capacity.

  • Analysis of Amazon DynamoDB Usage and Cost Reduction

The most critical component in the AWS cloud infrastructure of an organization is Amazon DynamoDB. You should use two different metrics in CloudWatch, ConsumedReadCapacityUnits and ConsumedWriteCapacityUnits, for analyzing DynamoDB. The Auto Scaling feature can help you in this practice of AWS cost optimization by automatically scaling the DynamoDB table.

You have to ensure to enable Auto Scaling on all your existing tables. On the other hand, you can also choose the on-demand option that allows read and write requests on a pay-per-request basis. As a result, you can achieve the perfect balance between performance and costs.

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  • Optimization of EC2, Lambda, and Fargate Costs

AWS users should also try the Compute Savings Plans that apply automatically to EC2 instance usage. There is no consideration, for instance, family, size, region, AZ, tenancy, or OS in the case of Compute Savings Plans. Furthermore, the plans are also applicable to Fargate and Lambda usage.

The Compute Savings Plan can offer almost 54% discounts as compared to on-demand pricing for one year without upfront payments. After signing up for Savings Plans, the costs of compute usage would be based automatically at discounted prices in the plans. Any user beyond commitment would be charged with regular on-demand prices.

  • Reduction of Networking Costs

Among the prominent best practices for AWS cost optimization, it is essential to reflect on the optimization of network costs. The Trusted Advisor Idle Load Balancers check tool can help you find a report of load balancers with RequestCount lower than 100 in the last 7 days. Now, you have to delete the load balancers for cost reduction and then review the data transfer process through Cost Explorer.

Amazon CloudFront can be a reliable choice for addressing concerns of higher costs in data transfer from EC2 to the public internet. The Amazon CloudFront Content Delivery Network (CDN) would be helpful in caching any image, static web content or video at AWS edge locations all over the world. CloudFront also takes away the necessity for over-provisioning capacity to address the potential rise in traffic.

  • Review and Modification of EC2 AutoScaling Groups Configuration

The final entry among the best practices for AWS cost optimization refers to the assessment and modification of the EC2 Auto Scaling Groups configuration. EC2 AutoScaling groups can help the EC2 fleet expand and shrink according to requirements. Users must review their scaling activity through the console or the describe-scaling-activity CLI command.

You should also evaluate the result for observing the scaling policy that can be tailored for the addition of instances. Users should also review their settings for ensuring the reduction of minimum configurations. As a result, they can address end-user requests with smaller fleet sizes.

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Are You Ready to Start with AWS Cost Optimization?

Therefore, you could start your journey of AWS cost optimization now with the pointers mentioned above. The various perceptions regarding optimization of AWS cost largely lie in following conventional methods. Compromising in resources for cost optimization can result in setbacks for performance. So, it is highly essential for all AWS users to notice that cost optimization is an ongoing process.

The advancements in cost optimization technology on AWS alongside continuous innovation can provide vital insights for cost optimization experts. So, it is essential to establish a formidable cloud financial management practice around the above-mentioned best practices. Learn more with the Cost Optimization in AWS training course and start experimenting now to observe the results!

About Pavan Gumaste

Pavan Rao is a programmer / Developer by Profession and Cloud Computing Professional by choice with in-depth knowledge in AWS, Azure, Google Cloud Platform. He helps the organisation figure out what to build, ensure successful delivery, and incorporate user learning to improve the strategy and product further.

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