Optimizing Cost on AWS

Technology infrastructure is the biggest expenditure for organizations, second only to human resources. Managing infrastructure costs is a quagmire as cutting down on expenditure will adversely affect efficiency and productivity. However, organizations can be watchful and institute best practices that will significantly reduce wasteful spending.

One of the key values at AWS is to understand customer pain points. Effecting ways to reduce customer expenditure is a high priority, and over the years AWS has consistently announced reduction in prices. This is because AWS leverages the scale at which it operates and passes on the benefits to customers. Yet there are other crucial decisions that result in significant and continuous savings, the key to which is to be aware and be vigilant. Below we list some of the areas by which customers can achieve cost optimization.

Use the right resources

Knowing and understanding your requirements is key to an optimized deployment. This is true not only for cost savings but also to have your deployment perform at its peak. Often customers buy instances which are not the right fit, resulting in underutilization of resources. AWS offers various types of instances with different CPU, memory, storage and networking capabilities to provide customers with flexibility. But the key is to make the right choices.

For example, T2 instances are a good choice for workloads that don’t use full CPU often or consistently, but occasionally need to burst e.g. web servers, developer environments and databases, while M series is suited for medium to heavy workloads, which are predictable. You can observe your workload to check utilization and resize it accordingly.

Save costs with Reserved Instances (RI)

Once you are satisfied with the performance and utilization of your resources, focus on optimizing costs in other decision making, including the right mode of purchase. While pay-as-you-go has its advantages, you can save even more when you buy the capacity upfront in the form of RIs. In some case you save as much as 75% over three years.
For details see here: https://aws.amazon.com/ec2/pricing/reserved-instances/

Save costs with Spot Pricing

Even better than RI, you can make significant cost reductions by using spot instances. AWS allows you to bid on spare capacity and if your bidding price is higher than the spot price, you can run your applications at a significantly lower cost. However depending on the demand, spot instances are liable to interruptions. So you have to be careful in choosing the right kind of application and designing your architecture correctly to offset interruptions.

Use auto scaling

One of the benefits of cloud computing is the high emphasis on automation. Once you have identified your requirements you can enhance your savings by using a combination of RIs and auto scaling to effectively meet your needs. Use RIs to meet with the base needs, and auto scale to cater to periodic spikes in workloads.

Turn off resources when not in use

Unlike traditional IT, you can turn off idle resources in the AWS environment. Use this to your advantage and switch off machines when not in use. Just like you turn off the light when you leave the room, make it a habit to switch off your AWS instances when you are not using them, thereby making significant gains.

Use monitoring and reporting tools and billing alerts

Use tools to help you keep track of resources. You can cap your AWS budget and set alerts to let you know when you are approaching your limit. Take advantage of monitoring tools to keep track of resource utilization and optimize deployment based on insights.

Cost and performance optimization on AWS is a continuous journey. But it requires extensive experience and familiarity with AWS services to align the best choices; keep up-to-date with best practises in designing appropriate solution, new services and features from AWS and aligning that with specific customer requirements.

Noventiq  has worked extensively with myriad customers and is constantly updating its understanding of AWS services. At Noventiq, we invest in building AWS capabilities because it is our businesses, so that we can help our customers better.