How to conduct AWS cost optimization of your workload

Your enterprise operates on the consumption-based model of AWS, but is your set up cost fully optimized? Are you able to best utilize your resources, achieve an outcome at the lowest possible price point, and meet your functional requirements?

If not, you are underutilizing the capabilities of your AWS cloud.

AWS offers several services and pricing options that can give your enterprise the flexibility to manage both your costs as well as keep the performance at par. And while it is relatively easy to optimize your costs in small environments, to scale successfully across large enterprises you need to follow certain operational best practices, and process automation.

Here’s taking a look at the six AWS cost optimization pillars to follow regardless of your workload or architecture:

Right size your services

AWS gives you the flexibility to adapt your services to meet your current business requirements. It also allows you to shift to the new services option when your demands change, to address new business needs anytime, without penalties or incidental fees.

Thus, through right sizing, you can:

• use the lowest cost resource that still meets the technical specifications of a specific workload

• adjust the size of your resources to optimize for costs

• meet the exact capacity requirements you have without having to overprovision or compromise capacity. This allows you to optimize your AWS workload costs.

Amazon CloudWatch and Amazon CloudWatch Logs are key AWS services that support a right-sizing approach, and allow you to set up monitoring in order to understand your resource utilization.

Appropriately provisioned 

AWS Cloud gives you the ability to modify the attributes of your AWS managed services, in order to ensure there is sufficient capacity to meet your needs. You can turn off resources when they are not being used, and provision systems based on the requirements of your service capacity.

As a result, your excess capacity is kept to a minimum and performance is maximized for end users. This also helps optimize costs to meet your dynamic needs.

AWS Trusted Advisor helps monitors services such as Amazon Redshift and Amazon RDS for resource utilization and active connections. While the AWS Management Console can modify attributes of AWS services, and help align resource needs with changing demand. Amazon CloudWatch is also a key AWS service that supports an appropriately provisioned approach, by enabling you to collect and track metrics of usage.

Leverage the right pricing model

AWS provides a range of pricing models: On-Demand and Spot Instances for variable workloads, and Reserved Instances for predictable workloads. You can choose the right pricing model as per the nature of your workload to optimize your costs.

1. On Demand Instances

In On-Demand Instances, you pay for compute capacity by per hour or per second depending on which instances you run. No long-term commitments or upfront payments are needed. These instances are recommended for applications with short-term or predictable workloads that cannot be interrupted.

For example, in using resources like DynamoDB on demand, there is just the flat hourly rate, and no long-term commitments.

2. Spot Instances

A Spot Instance is an unused EC2 instance that you can bid for. Once your bid exceeds the current spot price (which fluctuates in real time based on demand-and-supply) the instance is launched. The instance can go away anytime the spot price becomes greater than your bid price.

Spot Instances are often available at a discount, and using it can lower your operating costs by up to 90% compared to On-Demand instances. They are ideal for use cases like batch processing, scientific research, image or video processing, financial analysis, and testing.

3. Reserved Instances

Reserved Instances enable you to commit to a period of usage (one or three years) and
save up to 75% over equivalent On-Demand hourly rates. They also provide significantly more savings than On-Demand Instances on applications with predictable usage, without requiring a change to your workload.

AWS Cost Explorer is a free tool to analyze your costs, and identify your expenses on AWS resources, areas that need further analysis, and see trends that can provide a better understanding of your costs.

Geographic selection

Another best practice to architect your solutions is to place your computing resource close to your users. This ensures lower latency, strong data sovereignty and minimizes your costs.

Every AWS region operates within local market conditions, with resource pricing different for each region. It is up to you to make the right geographic selection so that you can run at the lowest possible price globally.

AWS Simple Monthly Calculator can help you estimate the cost to architect your solution in various regions around the world and compare the cost of each. Simultaneously, using AWS CloudFormation or AWS CodeDeploy can help you provision a proof of concept environment in different regions, run workloads, and analyze the exact and complete system costs for each region.

Managed services

Using AWS managed services will not only help remove much of your administrative and operational overheads, but also reduce the cost of managing your infrastructure. Since they operate at cloud scale, the cost per transaction or service is efficiently lowered. And using managed services also helps you save on the license costs.

AWS database, Amazon RDS, Amazon DynamoDB, Amazon Elasticsearch Service, and Amazon EMR are some of the key AWS services that support a managed approach. These services reduce the cost of capabilities and also free up time for your developers and administrators.

Optimize data transfer

Lastly, architecting for a data transfer can help you optimize costs. This involves using content delivery networks to locate data closer to users (effectively done Amazon CloudFront), or using dedicated network links from your premises to AWS (as done by AWS Direct Connect).

Using AWS Direct Connect can help reduce network costs, increase bandwidth, and provide a more consistent network experience than internet based connections.

Starting with these best practices early in your journey will help you establish the right processes and ensure success when you hit scale.

AWS provides a set of cost management tools out of the box to help you manage, monitor, and, ultimately, optimize your costs. Srijan’s is an AWS Advanced Consulting Partner, with AWS certified teams that have the experience of working with a range of AWS products and delivering cost-effective solutions to global enterprises.

Ready to build cloud-native applications with AWS? Just drop us a line and our expert team will be in touch.