AWS Cost Optimization: Getting the Most From Your Cloud Spend

by | Mar 25, 2022 | AWS, Blog

AWS cost optimization is possible, and the companies that comprehensively and proactively manage their cloud environments get the most out of their investment. By adopting cloud financial management best practices, organizations can reap the benefits of elasticity, agility, security, and reliability that AWS has to offer.

What is AWS cost optimization?

AWS cost optimization works towards achieving the lowest price for your workload in the AWS environment. Cost optimization is accomplished as a result of implementing management systems to get the most out of your AWS spend. As you migrate your workloads to AWS, you must manage and track your usage and spending.

> Read more: Are You Ready to Move to the Cloud?

Success in optimizing your cloud costs requires taking advantage of savings programs, such as AWS Savings Plans, as well as pairing your cloud workloads with the optimal instance and resource configuration.

What makes AWS so expensive?

AWS bills are directly tied to usage, so it’s essential for organizations to manage how they use the cloud in order to optimize costs. Wasteful spending in AWS is often a result of mismanaged cloud resources (idle or unused) and a lack of proactive planning. 

Migrating to the cloud also involves the inflated cost of managing two systems at once: your existing physical data center and your AWS environment. This inflated cost—the migration bubble—can add financial pressure to the initial switch to the cloud.

Where to start with AWS cost optimization

These five foundational principles apply to almost all environments, regardless of your workload’s size. When getting started with cost optimization, consider the following strategies.

1. Select the right instance

Be sure to select the correct instance for the resources you’re actively using and the resources you plan to use. This way, you always choose the cheapest available instance that matches your specific needs. Analyze utilization of CPU, RAM, networking, and storage to identify which instances can be scaled down.

Narrowing down which instance to use can be tough, as AWS offers more than 300 different instances, each with different capabilities. Often, developers and cloud architects either select the wrong instance size or an instance with unnecessary or insufficient features for their particular workload. This leads to oversized instances, instances that are incompatible with the workload, and resources left running idle.

To avoid these pitfalls, it’s important to proactively monitor what resources you are and are not using, as well as rightsizing your infrastructure. Amazon CloudWatch can help you track metrics and set alerts, allowing you to respond in real-time.

2. Increase elasticity

Increasing elasticity means being flexible with your application–having the ability to acquire resources as you need them and release resources when you no longer need them. Scaling out and scaling in, scaling up, and scaling down. Ideally, you want to monitor this varying workload automatically in the cloud.

Start by identifying which workloads have a variable load, determining workload range, and figuring out application limitations that may hinder elasticity. Further, pinpoint if increases in demand that may occur with events, webinars, and launches can be met by automatic scaling or if it must be put in place beforehand. Sometimes you may be able to reduce costs by using smaller instances for your workload rather than using fewer larger instances.

Monitor elasticity with tools like AWS Auto Scaling or Application Auto Scaling, which help track and schedule workloads.

3. Optimize storage

To optimize your spending, evaluate your storage usage monthly, making sure your storage is the right size and price. AWS offers multiple tools that can assist in monitoring storage costs, like AWS Budgets and AWS Cost Explorer. Additionally, you can utilize Amazon S3 object tagging, establishing an S3 lifecycle strategy to optimize data storage continuously.

The most commonly used storage option in the cloud is Amazon S3. It’s easy to use, offers virtually unlimited storage, and easily integrates with other AWS and third-party vendor services. However, be mindful that S3 comes in various storage tiers, so it’s important to monitor your S3 usage and select your storage tier based on your activity.

If you’re not quite sure, S3-Intelligent Tiering is your best bet. It automatically tracks your patterns and picks the best storage tier for your bucket.

4. Find the best pricing model for your needs

Once you’ve selected the right instance, increased elasticity, and optimized storage, you should turn your attention to selecting the pricing model that best fits your needs. AWS offers multiple pricing models, giving you options in finding the most cost-effective way to pay for your resources. You can choose from the following pricing models:

  • On-Demand—The default pricing model, where you pay as you go. You pay a flat rate when you use resources and have no long term commitments.
  • Spot
  • Commitment Discounts—Reserved Instances/Capacity
  • Commitment Discounts—Savings Plans
  • Geographic Selection

Understanding these various pricing models will help you select the best option for your company’s unique needs. Tools like the AWS Cost Explorer and Trusted Advisor can help you make an informed selection, matching your specific requirements with the pricing selections that AWS offers.

5. Analyze, monitor, and adapt

It’s important to continuously measure and monitor your cloud environment, repeating each of these steps regularly so you can adapt to changes. Proactive planning, defining metrics, and analyzing cost allocation will help you achieve continuous optimization in AWS.

> Read more: The NerdHerder Experience

AWS cost optimization requires an organized, disciplined approach, as well as a deep understanding of AWS functions and operations. As you move forward in your cloud journey, it’s in your company’s best interest to have expert cloud professionals on your team to assist in analyzing and monitoring your environment. If you find yourself in need of someone to fill that role on your team, NerdRabbit has you covered.

talent to support cost optimization strategies

Whether your team needs short-term support or a full-time hire, NerdRabbit can help you find the right talent to assist in implementing cost optimization strategies. Our AWS-powered machine learning software can match you with the perfect candidate to assist in AWS cost optimization and beyond. 

To learn more about our cloud professionals who can help you get the most out of your AWS spend, view our AWS staffing solutions.

A headshot of Lead Account Account at NerdRabbit.
About Claire Edwards
Claire Edwards is the Lead Account Executive at NerdRabbit, where she leads the sales team to support companies with all things Nerdly. Outside of the office, Claire enjoys playing with her dogs, trying new restaurants, traveling, and visiting her family.

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