AWS Cost Savings Guidelines

Owned by Manikandan Muthuraj

Last updated: 33 minutes ago

4 min read1 person viewed

AWS (Amazon Web Services) offers various services and features that can help you optimize costs and achieve savings.

Here are some general guidelines and best practices to help you manage and reduce your AWS costs:

• Services
• Storage Savings
• Compute Savings
• Monitoring
• Networking and data transfer

Services

AWS Trusted Advisor for Cost Optimization:

• Utilize AWS Trusted Advisor, which provides real-time guidance to help follow best practices for cost optimization.
• It offers recommendations across various aspects like cost, performance, security, and fault tolerance.

AWS Cost Explorer:

• AWS Cost Explorer is a tool that allows you to view, analyze, and visualize your AWS costs and usage over time.
• It provides pre-configured and customizable reports to help you understand where your money is being spent.

AWS Budgets:

• AWS Budgets allows you to set custom cost and usage budgets that alert you when you exceed your thresholds.
• You can create budgets based on various criteria, including services, tags, and more.

AWS Pricing Calculator:

• The AWS Pricing Calculator helps you estimate your monthly bill by providing a set of customizable templates for common architectures and services.
• It allows you to experiment with different configurations and understand the cost implications.

AWS Cost and Usage Report (CUR):

• The AWS Cost and Usage Report provides a detailed breakdown of your AWS costs and usage.
• It includes comprehensive data about your resource usage, pricing, and additional metadata.

AWS Savings Plans:

• AWS Savings Plans offer significant savings over On-Demand pricing in exchange for a commitment to a consistent amount of usage (measured in $/hr) for a 1 or 3-year period.
• They provide flexibility across EC2 and Fargate usage.

AWS Compute Optimizer:

• AWS Compute Optimizer recommends optimal AWS resources for your workloads based on historical usage patterns.
• It provides suggestions for EC2 instances and Auto Scaling groups to help you save costs and improve performance.

AWS Well-Architected Tool:

• The AWS Well-Architected Tool includes a Cost Optimization Pillar that helps you review your workloads for cost-effectiveness.
• It provides recommendations for cost optimization based on AWS best practices.

Storage Savings

S3 Lifecycle Policies for Cost-effective Storage

• Implement lifecycle rules for objects/buckets with known access patterns, allowing automatic transitions to different storage classes.
• Choose the right Amazon S3 storage class based on access patterns. For infrequently accessed data, consider S3 Standard-IA. For archival data, use Glacier.
• Use S3 Intelligent Tiering for objects with unknown or unpredictable access patterns.

Tagging Strategies and Cost Allocation Tags:

• Engage key stakeholders to decide on tagging strategies for resources in AWS.
• Tags could include information such as department, project, environment (e.g., production, development), etc.
• Enable Cost Allocation Tags for your CUR reports
• Use Tag Editor/AWS Config to control tags as well as restrict optional tags using IAM policy conditions.

Compute Savings

Compute Optimizer Recommendations:

• Regularly analyze your resource usage and rightsize instances to match your actual requirements.
• Use AWS tools like AWS Cost Explorer to identify underutilized or idle resources.
• Utilize AWS Compute Optimizer to get recommendations for:
• EC2 Instance Type and Size

Graviton instance

• AWS Graviton is a family of processors designed to deliver the best price-performance
• EBS Volume
• Lambda Memory Size

Review and Terminate Unused Resources:

• Regularly audit your resources using AWS Config or AWS Management Console. Terminate any unused or unnecessary resources

Spot Instances and Auto Scaling Groups (ASG):

• Implement the Price-Capacity Optimized allocation strategy for Spot Instances in ASG.
• Use Spot Instances for stateless, fault-tolerant workloads that can handle a 2-minute termination notice.
• Diversify Spot Instances across multiple instance types, sizes, and availability zones for flexibility.

Use Auto Scaling:

• Implement Auto Scaling to automatically adjust the number of instances in your application based on demand.
• This helps you match capacity to actual requirements, reducing costs during low-demand periods.

Compute Savings Plans:

• Compute Savings Plans apply to EC2 Instance usage regardless of instance family, size, AZ, AWS Region, OS, or tenancy.
• Opt for Compute Savings Plans for workloads requiring 24x7 availability for at least a year. This provides better flexibility.
• Example:
• Deploy Compute Savings Plans for a set of EC2 instances running a web application that requires 24x7 availability.

Reserved Instances (RI):

• Leverage Reserved Instances for Managed Services like DynamoDB, RDS, ElastiCache, Redshift, etc., ensuring cost savings for predictable workloads.
• Example:
• Utilize Reserved Instances for an RDS database that has a consistent and predictable usage pattern.

Managed Services:

• Leverage managed services like AWS Elastic Beanstalk, AWS Lambda, and AWS Fargate, which abstract infrastructure management and can lead to cost savings.

Amazon Aurora Serverless for Database Scaling:

• Consider using Amazon Aurora Serverless, a fully managed relational database service.
• It automatically adjusts database capacity based on actual usage, providing cost savings during periods of low demand.

Reserved Capacity for AWS Elasticsearch Service:

• Purchase Reserved Instances for AWS Elasticsearch Service to reduce costs. This is especially beneficial for workloads with consistent search or analytics demands.

Utilize AWS Graviton2 Instances:

• Consider using AWS Graviton2 instances, which are based on ARM architecture and can offer cost savings for certain workloads compared to traditional x86 instances.

Monitoring

Monitoring and Alerts:

• Set up AWS CloudWatch to monitor your resources and set alerts for cost thresholds. This allows you to take action when costs exceed predefined limits.
• Use AWS CloudWatch to set up custom dashboards and alarms based on metrics such as CPU utilization, network activity, and storage usage.
• Alarms can trigger notifications or even automated actions to address issues.

Networking and data transfer

VPC Endpoints:

• Leverage VPC Endpoints whenever you can to avoid going via the internet for external AWS Services outside your VPC

Data Transfer Costs:

• Be aware of data transfer costs between AWS regions, availability zones, and out of the AWS network.
• Consider using Amazon CloudFront or AWS Direct Connect for more predictable and cost-effective data transfer.

Service Control Policies (SCPs) in AWS Organizations:

• Implement SCPs within your AWS Organization to:
• Govern and filter actions that can be performed.
• Control allowed or disallowed regions, services, and actions across organizational units (OUs).

Educate Teams:

• Ensure that your teams are educated on AWS cost management best practices and regularly review the cost optimization documentation provided by AWS.

Remember that AWS continually introduces new services and features, so staying informed about updates and best practices is crucial for effective cost management.

Implementing these guidelines and regularly revisiting your AWS architecture and usage patterns will contribute to effective cost management and optimization.

Regularly monitor your AWS usage and adjust your strategy as your application evolves.