AWS Cost Optimization Strategies for Tough Economic Times

As the global economy slows down, many startups are preparing for a potential decrease in business activity. During times of economic uncertainty, it’s more important than ever to keep a tight grip on your company’s finances.

AWS offers a vast array of services, including computing, storage, networking, and more. While these services can be incredibly useful, they can also add up quickly, resulting in high monthly bills. That’s why it’s very important to optimize your costs on AWS. This article is based on our experience with dozens of AWS projects at https://www.binbash.com.ar, specifically with binbash Leverage Reference Architecture.

Here are a few ways to minimize your expenses on AWS:

Use the right instance types: AWS offers a variety of instance types, each with different capabilities and price points. By choosing the right instance type for your workload, you can save money without sacrificing performance.

Use reserved instances: By purchasing a reserved instance, you can save up to 75% compared to on-demand instances. This is a good option if you have predictable workloads that will run for a long period of time.

Access Reserved Instance recommendations: AWS provides recommendations for RIs in the AWS Management Console, which can be helpful for identifying opportunities to save on your Amazon EC2 and Amazon RDS usage. These recommendations are based on your past usage.

Use Savings Plan: AWS Savings Plans are a flexible pricing model that allows you to save on your Amazon Elastic Compute Cloud (Amazon EC2) and Amazon Elastic Container Service (ECS) usage in exchange for a commitment to a consistent amount of usage (measured in $/hour) over a one or three year period.

Consider using spot instances: Spot instances allow you to bid on spare Amazon EC2 capacity at discounted prices. While there is a risk that your spot instances could be terminated, they can be a good option for workloads that are tolerant of interruptions.

Use latest-generation instance types/storage tiers: Latest generation instance types or storage types generally offer better price/performance compared to previous generations. For example: EBS General Purpose (GP3) volumes are generally less expensive than EBS General Purpose (GP2) volumes.

Implement asynchronous processing when possible: By using SQS as a buffer between your application and other services, you can absorb spikes in workloads without overprovisioning resources. Decoupling can also enable you to use lower-cost resources for some tasks, such as using Amazon Elastic Container Service (ECS) or AWS Fargate for batch processing instead of more expensive on-demand EC2 instances.

Configure lifecycle policies where applicable: AWS Lifecycle policies can be an effective way to reduce expenses by automatically deleting or transitioning resources to more cost-effective storage options when they are no longer needed. By defining Lifecycle policies for your resources, you can ensure that you are not paying for resources that you are not using, which can help to lower your overall AWS costs. Some examples of resources that you might want to define Lifecycle policies for include Amazon S3 objects, Amazon EBS snapshots, and Amazon EC2 instances.

Implement Amazon Cloudfront: A CDN can reduce bandwidth costs by caching content closer to users and delivering it from the edge location that is closest to the user’s location. This can reduce the amount of data that needs to be transferred over the Internet and reduce the load on your origin servers. It’s important to note that using a CDN can incur additional costs for the use of the CDN itself. It is advisable to carefully evaluate the costs and advantages of using a CDN in your use case.

Use auto scaling: By using auto scaling, you can ensure that you have the right number of instances to meet your workload demands. This can help you avoid paying for unused resources and can result in significant cost savings.

Judicious usage of VPC endpoints: By using a VPC endpoint to access AWS services, you can avoid data transfer charges between the service and the Internet. For example, if you use a VPC endpoint to access Amazon S3 from within your VPC, you won’t be charged for data transferred between Amazon S3 and the Internet. VPC endpoints may incur additional charges for the use of the endpoint itself. You should carefully assess the costs and benefits of using VPC endpoints in your specific use case

Renew your instance reservations on-time: Activate reservation expiration alerts. You can receive email alerts 7, 30, or 60 days in advance before your reservation expires. These alerts can be sent to up to 10 email recipients. You can also choose to be notified on the day that your reservation expires. Reservation expiration alerts are supported for Amazon EC2, Amazon RDS, Amazon Redshift, Amazon ElastiCache, and Amazon OpenSearch Service reservations.

Use infrastructure as code: By storing your infrastructure configuration in version control, you can track changes over time and rollback if necessary. This can help you identify what changes may have contributed to cost increment. Also by using IaC, you can create reusable templates and modules for your infrastructure, which can make it easier to deploy and manage similar environments. This can help reduce the time and effort required to set up and maintain your infrastructure. Check https://leverage.binbash.com.ar for more information on the binbash approach.

Tag all resources: Having a tagging strategy can help you keep track of your AWS costs by providing a way to organize and identify your resources. Tagging allows you to assign metadata to your resources in the form of key-value pairs. You can use tags to categorize your resources and track them based on business unit, cost center, application, environment, or any other criteria that is relevant to your organization.

Monitor your usage: AWS Budgets can help you keep track of your expenses by providing alerts and notifications when your actual or forecasted costs exceed a specified threshold. AWS Budgets allows you to set up budgets for your AWS costs and usage, and it can notify you via email or Amazon Simple Notification Service (SNS) when your actual or forecasted costs exceed a specified threshold.

By following these tips, you can optimize your costs on AWS and keep your business running smoothly during economic uncertainty. Don’t let high cloud computing costs drain your resources — take action to reduce your costs today. Also, make sure you check our terraform module to setup AWS Budgets, and our GitHub for many more open source projects.