12 AWS Cost Optimization Best Practices That Will Help Reduce Monthly Bills

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Businesses are puzzled by the fact that the costs of cloud technologies and data centers are growing. According to Statista, in 2021 the costs reached $178 billion, which is 37% more than in 2020. Leading market researcher IDC predicts that by 2025, cloud services will “absorb” $ 338.3 billion.

Since 33% of the market share belongs to Amazon Web Services, the question “How to optimize aws costs?” remains relevant for its users. We have collected AWS cost optimization best practices that will help save money while maintaining the performance and scalability of the infrastructure.

AWS Cost Optimization: An Outside View Of The Process

AWS cost optimization includes a set of procedures to save cloud costs so that the company gets the maximum benefit from investing in technology.

Reducing cloud cost means not just to decrease the size of service bills, but also to profitably use the capacity to improve business results. For example, for a SaaS company, it is important to track how the cloud costs and services prices for one client are correlated. If the cost price increases and it cannot be reduced by AWS cost optimization, the finance department raises product price. Thus, it increases the gross profit of the company.

Analyzing the company’s expenses on the cloud, the engineer discovers places that overspend the budget. The specialist decides how to distribute the company’s capacities in order to use resources rationally. A professional regularly monitors expenses and minimizes them, while maintaining the smooth operation of the app.

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Why Is It Worth Optimizing AWS Costs?

Using the cloud implies a regular fee for the operations supported by it. If the scale of the organization grows, the number of procedures increases with it. At some point, it becomes difficult to track where the money goes and how efficiently the budget is spent.

It is important to follow AWS cost optimization best practices to:

1. Save On Using The Cloud

For example, save 72% of the budget on reserved EC2 instances. Or use spot instances, which are 3-8 times cheaper than the pay-as-you-go tariff. Next, we will look at this in more detail.

2. Scale Applications Profitably

The money saved can be used for the benefit of the business: to implement AWS development services, profitably scale platforms, finance projects and improve the performance of existing software.

3. Allocate Resources Reasonably

For certain processes, it is more profitable to use instances that match the type. For example, EC2 Instance Store, which are conditionally “free” (payment only for an instance), it is logical to use temporary data — swaps, cache and others. After all, if you stop EC2 with such a disk, the information is erased.

3. Increase The Uptime Of The System

Tools such as autoscaling dynamically increase or decrease the number of EC2 instances depending on the system load. So that it is accessible to users under any circumstances. For example, AWS Lambda serverless computing service scales cloud resources by 500 instances per minute until the load decreases.

12 Aws Cost Optimization Best Practices Worth Implementing

Here are some AWS cost optimization strategies that will help you adjust your work with the cloud on a regular basis.

#1. Optimize The Size Of EC2 Instances

With different workloads, different instance capacities are needed. Therefore, it is worth optimizing the size of instances for the operations performed. Of course, this is not easy to do: when an instance is increased by one size, its capacity doubles, and when it is reduced, it is halved. Therefore, the size can be optimized if the peak usage of instances does not exceed 45%.

Another option is to move workloads to other instance families and try different types of them with different sizes. But to do this, you will need to conduct a series of tests to choose the options that meet the requirements. 

#2. Configure The On/off Time Of Instances

A good AWS cost optimization practice is to disable instances when they are not in use. For example, you can pause non-production instances that participate in development and testing for nights and weekends.

Or disable instances from Friday evening to Monday morning for an application that is used only during business hours. 

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You can make a more detailed schedule of outages by analyzing at what time the peak usage of instances occurs. Plan a schedule that will be interrupted when access to instances is needed. This process is easily automated thanks to the AWS Instance Scheduler software solution.

#3. Purchase Reserved Instances

When used correctly, reserved instances bring savings of up to 72% compared to on-demand instances. They ensure that the right amount of resources will always be available. But the principle of economy works only if the cloud engineer knows for sure that the instances will not be idle.

The longer the reservation period and the amount of prepayment, the higher the discount. And the more accurately the employee determines the type of necessary instances, the higher the discount will be.

Therefore, it is worth evaluating all variables in advance, and also planning use cases, the scale of long-term projects and growth, and only then buying a plan.

#4. Delete Unconnected EBS Volumes 

When an engineer runs an instance in elastic block storage (EBS), an EBS volume is attached to it. It performs the role of a local block storage, but after the instance is stopped, it is not deleted. You can eliminate it only by selecting the “Delete on completion” option in the bucket before launching.

If you ignore this option, the volume that is not attached will still exist, and you will need to pay for it monthly. Given the fact that there may be thousands of such “invisible men”, an impressive amount will run up over time.

#5. Get Rid Of Outdated EBS Snapshots

Amazon offers cloud users a reliable way to back up EBS volume data – snapshots. They save the last modified information so that there are no duplicates in the S3 storage bucket. In fact, this is a copy of the original volume, from which data will be transferred to the new volume in case of an accident.

To restore, you need the latest snapshot, as it is more reliable. The rest of the pictures are of no use. One of the AWS cost optimization recommendations is to delete them after the expiration date (usually a couple of weeks).

A separate snapshot is inexpensive, but when several thousand of them are collected, a planned cleaning saves several hundred dollars.

#6. Discard Unnecessary Elastic IP Addresses

An elastic IP address is an analog of a public IP address that the company reserves for itself. The firm associates an elastic address with any EC2 instance, and then it can be accessed via the Internet. Owners of one account are allowed a maximum of five elastic IP addresses.

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What costs can an elastic IP address create? If the organization wants to reassign it to other instances more than 100 times, you need to pay extra. If the company “hangs” unbound EIPs, Amazon will charge $0.005 per hour for each unused IP. It seems that the amount is insignificant, but if the company has 50 accounts and each has one unconnected address, then the expenses will exceed $ 4,000 per year.

#7. Upgrade To The Latest Generation Instances

Amazon regularly updates instances, offering the latest options with improved functionality and performance. They are cheaper, use a new generation of processors, have an improved network configuration and a larger storage size, and other advantages. After the upgrades, the business gets the same level of performance at a lower cost.

#8. Place Rarely Used Data On Cheap Storage Levels

In Amazon Web Services, data can be stored at six levels, which have a certain gradation and cost. The choice of level depends on how often and quickly the owner needs to extract information. For example, to get data from the lower level, you need to wait several hours.

It is financially advantageous to place non-critical company data in the lower levels. For comparison: to store up to 50 TB of data at the first level (S3 Standard), the client needs to pay $ 0.023 per GB per month (prices for the eastern region of the USA).

For the S3 Glacier Deep Archive level, storing the same data for the same period of time costs $0.00099. A similar saving option is to use EC2 Instance Store to store temporary files (swaps, caches) with payment only for the instance.

#9. Use Spot Instances For Individual Tasks

Sometimes Amazon has idle resources in a certain region. Since there is no demand, AWS can provide spots at the price that the client offers. You can agree on a price 3-8 times less than the payment on request. This is a good AWS cost optimization practice, but there is one caveat.

The nuances of spot copies are that if demand grows and a higher price is offered for a spot, the company’s one will be removed. Of course, this option is not suitable for a database in production. But you can save a lot by transferring calculations, rendering, and tests to a spot instance.

For greater confidence, it is worth strengthening the instance with a bundle of CloudWatch + Auto Scaling to scale and rebalance operations in case of spot instance deletion.

#10. Configure S3 To Automatically Delete Incomplete Multipart Uploads

There is a technique for saving money on Simple Storage Service. You’ve probably heard of Multipart Upload, when large objects are loaded in pieces, after which the component parts merge together.

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If the download is interrupted for technical reasons, the downloaded items “hang” in memory, and you have to pay for them.

To prevent this from happening, you should set up a rule in the Lifecycle section of the bucket to delete incomplete data. The results of removing such a “ballast” can be tracked in the same CloudWatch.

#11. Enable Intelligent Tiering In S3 Sstorage

S3 has different storage classes: from Standard to Glacier. The latter saves money quite well by providing a place to store long–term files – logs and backups. But there is an equally interesting type – Intelligent Tiering, which automates the redistribution of resources.

For a small fee, the storage monitors data in S3. If the data is not accessed within a month, it transfers them to the infrequent access repository. When the data is accessed, it returns it to the standard access storage. It turns out that Intelligent Tiering itself determines which objects to put where. This option should be chosen when objects weigh more than 128 KB and are stored for more than 30 days.

#12. Eliminate Dead Resources

Dead resources or so-called “zombie assets” are unused capacities that increase the cost of working in the cloud. Some of them we mentioned above: not connected EBS volumes, snapshots, EIP. This may also include individual instance components and unused Elastic Load Balancers.

The problem is that zombie assets are difficult to detect, sometimes even AWS System Manager or AWS Console does not help. Therefore, organizations use specialized software that makes the work of cloud environments transparent.

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8 AWS Cost Management Tools

Instead of seeing the total bill for cloud expenses at the end of the month, it is useful to use tools for detailed analysis. They will provide cloud engineers with detailed statistics on the cost of functions and support the infrastructure.

They will help to detect unused elements that increase the receipt for the cloud, as well as rationally distribute the workload across storage levels and instances. Let’s list a few popular AWS cost management tools.

Amazon’s Own Tools

Aware of the trend towards reducing aws cloud cost, Amazon strives to help customers manage the cloud efficiently by offering its own tools:

1. AWS Cost Explorer

It gives a detailed picture of how the cloud is used and what the money is spent on. Generates a report for the last year and forecasts expenses for three months ahead. Sends AWS cost optimization recommendations: how to profitably use reserved instances and Savings Plans.

2. AWS Cost Anomaly Detection

AWS cost optimization tool, which uses a smart algorithm to detect unusual cloud costs. The technology monitors the operation process and reports when it detects anomalies so that cloud engineers react to the incident in time.

3. AWS Trusted Advisor

It gives advice on how to optimize AWS costs by following best practices. The service analyzes the account, finds problems with the use of resources, security, and performance. Offers options on how to reduce costs and make optimal use of assets.

4. AWS Budgets

It allows you to set budget limits for Amazon services. When expenses are close to the limit, the service sends notifications. The team of cloud engineers adjusts the use of resources so that the service continues to work within the established limit.

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Third-party Cloud Cost Analytics Tools

There are enough AWS cost management tools on the market that provide developers with the necessary analytics and AWS cost optimization recommendations:

5. CloudZero

Details expense data even for individual cloud elements so that engineers know why the receipt is growing. By understanding the nuances of AWS, developers can optimize the cloud infrastructure and restrain the growth of costs.

6. CloudHealth

Allows you to analyze the cloud environment by projects, apps, and business lines. It has the functions of budget management, forecasting, anomaly detection, cost allocation and other useful options.

7. Cloudability

Correlates cloud costs with business value. This helps teams rationally allocate costs, including container and support costs, so that the investment pays off.

8. CloudCheckr

Makes the invisible mechanisms of the cloud transparent. It identifies spending trends and makes recommendations for savings. In addition, it reduces the check on AWS due to the correct choice of the cloud asset size and re-balancing.

The lists can be continued by including AI tools and automation platforms (Spot.io , Opsani, Granulate). But this is a topic for a separate article.

There are a lot of services, but it is important to find a solution suitable for the DevOps, Fanaps and cloud engineers team that will support business processes at the proper level and reduce cloud cost.

Conclusion

AWS cost optimization is not a one–time process. It is necessary to constantly monitor the cloud and check whether the acquired resources are being fully used.

That there are no zombie assets draining the budget. By understanding business needs and AWS cost optimization practices, you can make reasonable decisions to get the most out of the cloud service.

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