Best Practices for Optimizing Cost in AWS Cloud

Author: Abel Chisanga

As organizations navigate through uncertain economic times, it is more important than ever to scrutinize operational expenses, particularly when it comes to the cost of your cloud. With ever-increasing adoption of cloud computing, this area becomes a crucial candidate for cost-reduction opportunities and should factor prominently in an organization’s overall strategy for profitability.

Migrating to the cloud is an intricate process that demands a multitude of choices be made along the way, encompassing various technologies, implementation approaches, and monitoring strategies, to name just a few. Given the myriad decision points, it’s imperative for enterprises to periodically assess their cloud operations with fresh eyes to ensure that costs remain aligned with business objectives and growth trajectories.

These assessments can help your organizations address questions like:

• How can my organization balance cost optimization efforts with its needs to be innovative, scalable, and agile within your cloud environment?
• Does my organization have a defined approach to analyzing my AWS spending patterns and identify areas for cloud cost optimization?
• What factors should be considered when determining the appropriate instance type and size to minimize cost while maintaining performance?

Of course, each organization’s situation will be unique, and an experienced expert can provide tailored insights and recommendations based on your specific infrastructure, workloads, business requirements, and goals.

Here we hope to explore some essential strategies and techniques used in the AWS cloud that can help you begin to answer some of these questions, to ultimately help you realize the value of your cloud investments.

[Read More: The AWS Comprehensive Cloud Machine Learning Package]

Embarking on the AWS cloud cost optimization journey can happen at any point along the cloud migration or implementation spectrum and, if done right, will complement the organization’s broader goals. The process should include defining clear objectives, such as reducing overall spending, optimizing specific services, or improving resource utilization. Key stakeholders from various departments, such as finance, IT, and operations, should be involved to ensure alignment across the organization.

A cloud cost optimization strategy can include the following techniques to reduce AWS cloud computing costs.

• Leverage Cost Management Tools
• Implement Cost-Aware Application Design
• Implement Tagging and Resource Governance
• Embrace Serverless Architecture
• Utilize Reserved Instances (RIs) and Saving Plans
• Right-sizing Resources
• Monitor and Automate

Let’s dive a bit into these techniques and explore some of the benefits they can provide.

Leveraging Cost Management:

This technique provides cost management tools to help you access your cloud spending and make informed decisions. Services like AWS Cost Explorer, AWS Budget, and AWS Cost and Usage Reports help you monitor, analyze and forecast cost effectively. These tools offer detailed insights into resource utilization, identify cost anomalies, and provide recommendations for cost utilization.

Implement Cost-Aware Application Design:

Designing applications with cost optimization in mind can yield significant benefits. Leverage services like Amazon S3 Intelligent Tiering which automatically moves data between storage tiers based on access patterns, optimizing costs for uncommonly accessed data. Use caching mechanisms like Amazon CloudFront to reduce the load on your origin servers and improve performance while minimizing costs.

Implement Tagging and Resource Governance:

Tagging provides valuable insights into resource ownership, project allocations, and cost categorization. By implementing a well-defined tagging strategy, your resources are organized more effectively. By enforcing resource governance policies, you can prevent resource sprawl, control costs, and improve accountability across your organization.

Embrace Serverless Architecture:

AWS offers serverless services like AWS Lambda, Amazon DynamoDB, and Amazon S3, eliminating the need to provision and manage servers. Serverless architecture, also allows for automatic scaling of resources based on demand, reducing idle time and lowering costs. Additionally, serverless services follow a pay-per-use model, allowing you to pay only for execution time and resource consumption.

Utilize Reserved Instances and Saving Plans:

Reserved Instances and Savings Plans allow you to commit to using specific resources in exchange for significant cost savings. RIs provide capacity reservations for EC2 instances, while Savings Plans offer flexibility across various AWS services. While this approach involves some upfront planning — analyzing workload patterns, identifying stable workloads, etc. — making use of RIs or Savings Plans can yield material costs savings over the long run.

Right-sizing Resources:

One of the fundamental principles of cloud cost optimization is ensuring that your resources are appropriately sized. Oversized instances or underutilized resources can lead to unnecessary costs. Analyze your workload requirements and leverage services like AWS Trusted Advisor and AWS Compute Optimizer to identify opportunities for right-sizing. You can significantly reduce costs by matching your resource capacity to the actual demand.

This is precisely the approach taken recently by RevGen Partners for a cybersecurity company facing escalating cost in their AWS cloud environment. We analyzed and identified inefficient resource usage, as well as a general lack of visibility into cost allocation across departments and projects within the organization.

Through our thorough scrutiny of the organization’s Elastic Compute Cloud (EC2) instances, we were able to identify both oversized and underutilized instances, allowing for a more appropriate alignment with the organization’s true needs.

Monitor and Automate:

Continuous monitoring is vital to ensure ongoing cost optimization and one of the best ways to do this is with automated monitoring solutions that track resource utilization, spending, and performance metrics. Setting up alerts for cost thresholds and unusual spending patterns can proactively detect anomalies as they happen, allowing you to take immediate action.

One of many recent RevGen partnerships involved a telecommunications company migrating their on-prem applications and database servers to a cloud environment. We helped the organization make use of new analytics and insight services and found that the data refresh configuration was occurring more frequently than necessary, which resulted in unusually excessive costs for the services. Working with RevGen, the company was able to adjust the configuration and act on additional best practices, ultimately making the cost more manageable and in-line with their operations.

In conclusion, it’s difficult to overstate the importance of effectively managing costs in your organization’s cloud environment and should be considered an essential component of your organization’s overall business strategy.

With the many cloud offerings and tools out there, RevGen can help you navigate the road to adopting a comprehensive cost optimization strategy. While we covered some AWS cloud tools here, this is just a small sampling of the many options available to your organization. RevGen’s experienced cloud experts can work with your particular instance to help you unlock significant savings while ensuring optimal performance. To learn more visit our Technology Services page.

Abel Chisanga is a diligent and driven Data Scientist and Technical Senior Consultant who has found success in a variety of roles. He is output-focused and sees data science as a powerful tool to get things done rather than an end in-and-of itself.