Top 10 AWS Cost Optimization Best Practices

Amazon Web Services (AWS) is a great way to reduce costs and increase efficiency, but even the best of systems can be improved.

1. Start with the Basics

The first step in optimizing your AWS costs is to make sure you are using all of the features AWS has to offer. Many users don’t take advantage of all the capabilities of AWS because they are not aware of them or they don’t know how to use them. Some of the most common features that are underutilized include:

Elastic Load Balancing (ELB) ELB distributes traffic evenly across multiple instances, which can help reduce costs by allowing you to use fewer servers.
Auto Scaling Auto Scaling automatically adds and removes instances from your fleet based on predefined rules, which can save money by ensuring you only have the number of instances you need running at any given time.
Spot Instances Spot Instances allow you to bid on unused EC2 capacity, which can save you up to 90% off the regular price.
Reserved Instances Reserved Instances provide a significant discount (up to 75%) off the price of on-demand instances, and can be a great way to ensure you always have capacity available when you need it.
‍

2. Determine Your Cost Drivers

Once you have familiarized yourself with all of the features AWS has to offer, the next step is to determine which ones are driving your costs up. Some of the most common cost drivers include:

EC2 instances The number and type of EC2 instances you use can have a significant impact on your costs. For example, t2 instances are less expensive than m3 or c3 instances, but they also have slower performance.
EBS volumes The size and type of EBS volumes you use can also drive up your costs. For example, General Purpose SSD (gp2) volumes are more expensive than Magnetic volumes but offer significantly better performance.
Data transfer Data transfer in and out of AWS can be expensive, so it is important to optimize where possible. For example, transferring data between regions is typically much cheaper than transferring data within a region.
‍

3. Understand Your Usage Patterns

After you have determined your cost drivers, the next step is to understand your usage patterns. This will help you determine which optimizations will be most effective for you. Some of the questions you need to answer include:

How much traffic do your applications receive?
What are your peak hours?
What types of applications do you have?
What are your average response times?
‍

4. Lock in Pricing and Vendors

Once you have determined your usage patterns, the next step is to lock in pricing and vendors. This can be a difficult task, but it is important to do if you want to get the best deals possible. Some things to consider include:

Negotiate pricing Many vendors will negotiate prices if you are willing to commit to a certain volume.
Use multiple vendors Using multiple vendors can help you get better deals, as they will be competing for your business.
Sign long-term contracts Long-term contracts can provide significant discounts over the regular price.
‍

5. Review and Refine Your Security Settings

Security is always a top priority, but it can also be a major expense. Reviewing and refining your security settings can help you reduce costs without compromising security. Some things to consider include:

Adjusting your firewall rules This can help you block traffic that is not needed, which can reduce data transfer costs.
Restricting access to sensitive data Restricting access to sensitive data can help reduce the risk of unauthorized access.
Optimizing your security groups Security groups can be used to control the traffic that is allowed into and out of your instances, which can help reduce costs.

6. Optimize Your Storage and Database Performance

Another common cost driver is the performance of your applications. This can be due to a number of factors, including:

The type of application Applications that require a lot of CPU or memory will typically be more expensive to run than those that do not.
The amount of data stored The more data you store, the more it will cost to store it.
The type of storage used The type of storage you use can have a significant impact on performance and costs.

7. Conduct a Cost and Utilization Audit

The best way to understand your costs and determine where optimizations are needed is to conduct a cost and utilization audit. This will help you track your spending over time and identify areas where savings can be made. Some things to consider include:

Tracking your spending It is important to track how much you are spending on AWS so you can identify trends and potential savings opportunities.
Identifying underutilized resources Resources that are not being used can be costing you money, so it is important to identify and optimize them.

8. Leverage Spot Instances and Reserved Instances

Spot instances can be a great way to reduce costs, but they can also be risky if not used correctly. Reserved instances can be a more reliable option, but they can be expensive if not used correctly. It is important to understand the differences between these two options and how they can impact your costs.

9. Use Amazon EC2 Reserved Instances

Amazon EC2 reserved instances can be a great way to reduce costs, especially if you know that you will need more than just occasional access to resources. They allow you to reserve instances for a one- or three-year term, which can provide significant savings over the regular price.

10. Create a Monthly Budget

Creating a monthly budget can help you track your spending and make sure that you are staying within your limits. This can be helpful for both AWS and non-AWS expenses. Having a budget in place can help you identify potential cost savings opportunities and make sure that you are not overspending on AWS.

The Bottom Line

AWS can be a great way to reduce costs, but it is important to take the time to understand your usage patterns and optimize your settings. Following these 10 tips can help you reduce your AWS spending and keep your costs under control.

If you are looking for more information on AWS cost optimization, Agilisium Consulting can help. We offer data-driven AWS Well-Architected Review service to help you get the most out of your AWS environment, including cost and utilization audits, performance optimization, and more.

‍