What Is AWS Cost Optimization?
Amazon Web Services(AWS) is the world's leading cloud computing platform, providing hundreds of services covering compute, storage, networking, container orchestration and many more.
Optimizing AWS costs involves monitoring and analyzing your usage, identifying opportunities to reduce the costs, and implementing recommended actions.
It focuses on achieving the lowest price for the system in the AWS environment. As you migrate workloads to AWS and increase your use of various AWS services, it is essential to fully understand the value of AWS, and track and effectively manage AWS usage and costs.
Now let us look at the Cost Optimization Strategies.
Regardless of your workflow, these are the Seven best optimization that applies to almost all the environment.
1. Choose the Right Size
This is to select the correct instance for the resources you are currently using and the resources you plan to use. You should check the RAM, CPU, Storage and network etc., before fixing your size. Also you should always choose the less pricing or cheapest available instance that meet your performance needs. You should always use Amazon CloudWatch to track metrics and set alarms so that one can react dynamically.
2. Increase Elasticity
Increasing elasticity means adding flexibility to our application and using these resources when you need them and turning off these resources when you are not using them. We can use AWS Auto Scaling to schedule workloads when needed. Usually production instance needs to be always on, but what about the test environment? These instances can be shut down when not in use or during non-working hours.
3. Choose the Right Pricing Model
AWS provides a range of pricing models for computing, storage, and other services. We should choose the right pricing model to optimize costs based on the nature of our workload. The mostly used range of pricing models are as follows:
On-Demand Instances
On-demand is mainly recommended for applications with short-term (one year or less) workloads that have periodic spikes, are unpredictable, or can’t be interrupted.
Amazon EC2 Spot Instances
EC2 Spot instances lets you take advantage of unused EC2 capacity at discounts upto 90% of the on demand price. You should use Spot Instances for fault tolerant or flexible applications and test and development workload, because EC2 spot instances can be interrupted with a two-minute warning if AWS needs the capacity back.
For long term projects with stable and predicted workloads we can use these pricing models as follows:
Savings Plan
This allows you to make an hourly commitment (measured in USD per hour) for one or three years and receive discounts across the computing resources.
Reserved Instances (RI)
Provides a capacity reservation for one year or three years when purchased. Offer discounts up to 72% for a commitment on EC2 instances.
4. The Use of Storage
When you start using Amazon S3, we usually choose the Standard storage tier which is in most cases the right option. if you have some files which you do not usually need for more than 30 days, you can leverage other S3 tiers.
You can use S3 analytics to analyze the frequency of file access which makes recommendations on where you can use the S3 Infrequently Accessed (S3 IA) tier to reduce costs.
You also can use Life Cycle Policies to automate moving these files into the lower cost storage tier.
Alternately, you can also use S3 Intelligent Tiering, which automatically analyzes and moves your objects to the appropriate storage tier.
5. Delete Unused EBS Volumes
A great way to save storage is to delete unused Elastic Block Storage (EBS) volumes. A managed disk drives you can attach to EC2 instances. Even after the EC2 instance shuts down, EBS volumes can continue operating and incur costs. Make sure teams are aware that when they use EBS volumes, they should select the option to Delete on termination. This will ensure that the EBS volume is deleted when the EC2 instance is terminated.
6. Reduce your data transfer costs
Data transfer from AWS resources (EC2, S3) to the public internet (your users) can create significant charges. If this happens consider using Amazon CloudFront (CDN). Dynamic or static web content can usually be cached at Amazon CloudFront edge locations worldwide, and with this solution, you can reduce the cost of data transfer out to the public internet.
7. Measure, monitor, and improve
The last one is to continuously optimize costs by monitoring and measuring your environment, repeating this operation continuously for any new changes in your entire environment.
Measure, monitor and improve to achieve continuous cost optimization. The most important thing you can do is to define metrics and implement tags, and then review your plan on a regular basis.
Top 3 AWS Cost Optimization Tools
AWS Cost Explorer
AWS Budgets
AWS Pricing Calculator
AWS Cost Explorer: The Cost Explorer interface enables you to view costs, usage for AWS services. The interface displays data for the past 13 months(the current month and the forecasted costs for the next 12 months) and can help you forecast your future spend. You can use the interface to create customized views, which can help further analyze your AWS costs and also identify certain areas for improvement.
AWS Budgets: AWS Budgets can help you set and enforce budgets for each AWS service. When budgets are exceeded or reached, you can receive messages or emails from the Simple Notification Service (SNS). The tool provides dashboard views similar to those generated by the Cost Explorer, displaying how each service is used compared to its budget.
AWS Pricing Calculator: AWS Pricing Calculator enables you to estimate the cost of use cases on AWS. It lets you generate monthly cost estimates for all regions supported by a certain service. This will help you plan your AWS cost and usage, as well as estimate the cost of setting up new environment and services.
Conclusion:
Hence we have listed few best practices in this article. Some of the strategies and tools outlined here may boost up front costs, but the more you proactively spend on tools and strategies, the greater your chance of lowering your usage costs down the line.
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