10 Cost Optimization Strategies with AWS


Cloud computing allows you to only pay for what you need at the moment, with the ability to scale up or down quickly when your needs change. Avoiding costly upfront hardware and software expenses will help you manage your budget with predictable monthly expenses.  You can rapidly deploy as needed, share resources, and allow mobile access. However, attention to identity management will make for more efficient operations and heighten internet security and information protection. Moving to the cloud will modernize your business and allow for increased business intelligence.

The AWS platform from Amazon Web Services offers a mix of IaaS (Infrastructure as a Service), PaaS (Platform as a Service) and SaaS (Software as a Service). Used as a backbone for cloud computing, it can handle infrastructure provisioning and management.

10 Cost Optimization Strategies with AWS

With cloud computing, there can be significant cost savings once you set up your infrastructure and complete data migration.  However, it’s important that you optimize these costs to avoid surprises. Optimization allows you to continually refine and improve your system over its lifecycle to maximize your return on investment.

Proper Allocation & Tracking Of RIs

One way you can optimize your costs is by using Reserved Instances (RIs).  RIs provide discounted rates compared to on-demand instance pricing. By committing to an upfront level of usage, Amazon is willing to provide lower pricing.  Longer-term commitments at pre-selected levels can result in discounts exceeding 50% compared to using on-demand instances.

To take advantage of these discounts, you must have a handle on how much storage and computing power you’re going to need.  Your allocations will be a critical decision as you set starting points since you don’t want to overpay for capacity you won’t need.  If you use applications with stable usage patterns, RIs are a great way to go.

1. Repurpose Unused RIs

In larger companies, RIs can be reserved across organizations to eliminate unnecessary charges.  A unified hub can allocate resources so that those not needed by teams in one area (or applications) can be used by other teams, apps, or projects.

Fortunately,  even companies that don’t have a centralized data hub can still repurpose unused RIs to new projects or applications. If you still have excess RI capacity or your needs change over time, RIs can even be sold on the AWS marketplace.

2. Payment Options

Amazon has three options for payments:

  • All Upfront:  Pay the entire amount of your contract upfront

  • Partial Upfront:  Pay a down payment upfront and then the rest in periodic increments.

  • Pay Over Time:  Pay nothing upfront and pay in installments.

The earlier you pay and the more you pay upfront, the biggest the discount will be.

3. Unused Snapshots

Cloud providers take snapshots at predetermined time periods to provide a point-in-time backup in case of disaster or data loss.  However, these snapshots will contribute to your monthly usage charges.

Make sure that when you schedule your snapshots, you also schedule regular deletion. Planning for housekeeping to eliminate any outdated snapshots, orphan snapshots, or those that do not have attached volumes will save you money.

4. Cleanup EBS Volumes

EBS (Elastic Block Store) volumes provide persistent block storage volumes for use with Amazon EC2 (Elastic Compute Cloud) instances.  Each EBS volume is automatically replicated to protect from component failure.

Like snapshots, they can build up and add to your monthly bill whether they are being utilized or not.  Each time a new instance is launched, an EBS volume is appended to it as local block storage. When you decommission an instance, the volume remains in your account unless you delete it.

Make sure you set up to automatically delete unattached EBS volumes upon decommissioning each instance.  Unattached block storage assets can account for as much as half of your AWS costs, which can be totally avoided if you just take the aforementioned steps..


5. Discard Liabilities

Once you commit to a certain level, you’re paying for instances and resources whether you use them or not.  As long as they are running, you will get a bill. Anything you are no longer using – and don’t plan to use again – should be discarded.

6. Know Your Usage & Plan Accordingly

You want to choose a plan that meets your demands with the ability to scale, but you don’t want to pay for bandwidth you aren’t going to need.  Rightsizing your capacity helps you identify underutilized resources. If AWS is being underutilized, you can switch down a size.

Automatic alerts can help you identify underutilized resources.  You will want to consider continuous monitoring and routine housekeeping as well.  Most organizations will monitor utilization. If an instance is consistently under 80% utilization, it may be ripe for adjustment.

In addition to downsizing instances if they are underutilized, take a look at your disk storage type, volume types, and performance.

7. Manage Data Transfer Costs

Moving data cost money.  Transfer costs with cloud providers can add up quickly.  Each time you transfer data between AWS and the internet, between EC2 or S3  (Simple Storage Service), or moving to different availability zones (AZs), there is an associated cost.

Design your infrastructure and framework so that data transfers across AWS regions or AZs are optimized.  You want data transfers to be completed with the least amount of charges possible.

8. Optimize Storage

Not everything you store in the cloud needs top priority, redundancy, and information security.  If you are willing to reduce your redundancy, you can store non-critical data in an S2 RSS (Reduced Redundancy Storage).  This can cut down on storage costs by 15% or more.

You can also choose to limit what you store in your AWS cloud and consider other options for deep archives that don’t need to be immediately retrievable.

9. Use Auto Scaling

Auto scaling automatically monitors and adjusts your compute resources to maintain performance.  As demand spikes, it can draw resources from other instances. When demand eases, it will automatically scale it back down.

You can adjust the auto scale whenever you want and set thresholds for performance triggers.

In addition to auto scaling, you can also adjust scaling on a schedule for predictable and recurring load changes. 

10. Cloud Computing Cost Containment

Cloud computing is a powerful tool that can transform your business.  Whether you plan on using a private vs. public cloud, AWS cloud services can help reduce your total cost of ownership and save you money.

It can also add unnecessary costs if you aren’t monitoring, tracking, and actively managing your assets and resources.  Use these strategies to optimize your costs.