Written by Jenna Cheah
Cost management is a critical challenge as businesses continue to expand their cloud infrastructure. Today it is easier than ever to fall into common spending pitfalls such as over-provisioning resources, leaving unused instances running, or neglecting to optimize storage costs, which can lead to unexpectedly high bills.
In this blog post, we will look at practical methods to reduce AWS expenses without compromising on performance. Effective cloud cost management will not only reduce expenses but also ensures your cloud infrastructure remains agile and efficient as your business grows. Let’s dive in and transform your approach to AWS cost optimization.
Tools for AWS Cost Management
1. AWS Cost Optimization Hub
If you want to start with proactive cost management, look no further than the AWS Cost Optimization Hub which offers recommendations such as rightsizing underutilized EC2 instances, transitioning EBS volumes from gp2 to gp3, or identifying idle resources. Through regularly applying these recommendations, organizations can achieve considerable savings while optimizing resource allocation.
2. AWS Budgets
AWS Budgets is a tool for monitoring and controlling AWS expenses. Budget limits can be set for individual services, linked accounts, or even entire projects. You can configure these budgets for daily, monthly, quarterly, or annual periods, which allows you to tailor your cost management strategies to your operational needs. You will be notified when actual or forecasted spending surpasses these limits, providing early warnings to prevent exceeding budget limits (pictured below).Â
For example, a project team might set a budget limit and receive alerts when costs are forecasted to exceed expectations. This enables them to look into and shut down unused instances before the end of the billing cycle. AWS Budgets ensures cost control by delivering proactive alerts, enabling teams to address potential overspending.
3. AWS Cost Explorer
AWS Cost Explorer provides an in-depth analysis of your AWS spending. It helps identify spending patterns by grouping costs by accounts, services, or regions. Use it to analyze spending trends over time, detect anomalies such as unexpected increases in EC2 costs due to expired Reserved Instances, and forecast future spending based on your past spendings. Cost Explorer also has visualization tools such as graphs and tables, making it easier to collect and present data and make informed decisions.Â
Cost Optimization Tips
1. Review and Act on Recommendations
Enable the AWS Cost Optimization Hub for all accounts to start gathering data and receiving actionable recommendations (note: once enabled it will take at least 24 hours before recommendations are shown). For example, rightsizing recommendations for EC2, EBS, and RDS resources can help ensure you are not overpaying for underutilized resources. Be mindful that AWS does not take into account whether these recommendations would be suitable for your workloads, such as Graviton migration, so evaluate before applying any recommendations.
2. Analyze Spending Trends
Use AWS Cost Explorer to analyze recent spending trends and identify optimization opportunities. For instance, you might find that running a service in a different region is more cost-effective for your use case. These insights can lead to informed adjustments to reduce expenses.Â
3. Detailed Cost Breakdown
AWS Bills allows you to easily understand your AWS charges by providing further breakdown of your spending, detailing how each service is used. For example, you might discover that in your development environment, S3 usage in the Sydney region is incurring the most charges. These bills not only outline your total costs but also break down charges by specific actions, such as data retrieval from S3 or storage in Glacier. Additionally, AWS Bills include usage quantities and associated rates, helping you pinpoint high-cost operations and opportunities for optimization. Use this information to identify which services to optimize and implement cost-saving measures, such as moving infrequently accessed data to lower-cost storage classes.
4. Rightsizing Resources
Perform regular reviews on your resources such as EC2 and RDS instances and EBS volumes to ensure they are appropriately sized for your workloads. For example, if an EC2 instance is operating at less than 20% CPU utilization, it can often be rightsized to a smaller instance type, reducing costs without affecting its performance. Note: It is recommended to review AWS Cost Optimization Hub recommendations every few months to maintain efficiency.
5. Optimize Storage
Storage costs can quickly accumulate if left unmonitored. Review S3 bucket metrics to understand how objects are being stored (pictured below) and use S3 lifecycle policies to transition infrequently accessed data to lower-cost tiers like Glacier or Intelligent-Tiering. Regularly audit your environments for unused EBS volumes and older snapshots to avoid unnecessary expenses.
6. Leverage Savings Plans
Savings Plans and Reserved Instances are both designed for increased savings, but they serve distinct purposes. Savings Plans offer flexibility by providing cost savings across different instance types, regions, and operating systems, making them ideal for dynamic workloads. Reserved Instances, on the other hand, provide significant discounts for committing to specific instance configurations over one or three years, which is particularly suitable for predictable, steady-state workloads. Note: remember to monitor expiring plans to avoid accidentally reverting to on-demand pricing.
7. Automate Cost Controls
Leverage automation tools like Instance Scheduler on AWS, which works with other AWS services to shut down non-critical environments during off-peak hours. Regularly cleaning up outdated backups also minimizes unnecessary costs and contributes to long-term operational efficiency and streamlined resource management.
Summary
AWS provides many tools and services to support scalable and efficient cloud infrastructure, but effective cost management requires a strategic approach. By leveraging tools like AWS Cost Optimization Hub, AWS Cost Explorer, and AWS Budgets, along with implementing strategies such as rightsizing, storage optimization, and automation, you can achieve significant savings without sacrificing performance. With the right tools and strategies, cloud cost management can become a competitive advantage for your business.