You’ve moved to the AWS cloud. But surprisingly, you haven’t seen the cost savings that, everyone assured you, would follow. It is more efficient, productive, scalable and flexible – and it is probably cheaper than your on-prem system – but it’s not bringing in the savings you expected.
What’s going on?
AWS (Amazon Web Services) is the world’s leading cloud provider, and by moving to the AWS cloud, you will gain the benefits of over 200 services across the infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS) categories. If you aren’t experienced with AWS, you may over-provision resources or make the wrong choices. As a result, you may not have the most cost-effective AWS experience.
However, by making the right decisions, it’s possible to optimize resource utilization (instances, storage, databases, networking, etc) and payment plans to reduce cloud costs as much as possible.
How do I select the right pricing strategy?
AWS offers a number of pricing models, and selecting the right one based on your tech needs is crucial to improving cost-effectiveness.
- Pay per use: Based on actual resources consumed during the billing period
- Use more, pay less: ‘Savings Plans’, a system of tiered pricing where unit rate reduces with volume
- Pay less by planning in advance: Optimal usage of Reserved Instances and Spot Instances
- Don’t pay at all: Short-term free trial versions of most AWS services, plus an Always Free tier with a limited service set
You can learn more about AWS’ pricing models here.
Which model should you select? It really depends entirely on the details of your project. Speak to an AWS consultant to understand the actual needs of your project in terms of instances, networking, storage and other assets. Every project has unique characteristics, based on which it has unique potential for cost-saving based on pricing plan and regional deployment of services.
Where can I cut down?
There are certain AWS resources that, if not used correctly, can unnecessarily add to your costs. For example, Amazon EC2 is the major provider of compute instances in AWS. If you are under-utilizing your Amazon EC2 instances, you’re paying for resources that you don’t really need. That’s true of any other unused resources that you’re paying for without actually utilizing them.
Spot instances enable you to request unused EC2 instances at steep discounts, and Reserved instances act as a billing discount in cases where on-demand instances match attributes that you have selected. It sounds like it would be cost-effective to use them, right? By optimizing these instances, you can realize discounts of 70-90%.
The problem is that many business managers or project owners feel that they should maintain a little buffer. Just to stay safe. What’s the harm with maintaining a little extra resource buffer? However, AWS’ feature of scaling automatically adds resources as demand increases, without risking application performance. If auto-scaling is not optimally implemented, you may be spending on redundant resources.
Analyzing and visualizing spend data
AWS has a number of tools using which you can view and analyze your usage and costs. One important tool is AWS Cost Explorer. Using the cost and usage reports provided, users can view data for the previous period, for upto 12 months, and forecast likely spend for the upcoming period of upto 12 months. Cost Explorer can also identify areas for potential optimization and trends that can be used to understand and further reduce your costs.
The Cost Explorer user interface displays costs, trends, potential savings and other information based on which you can take decisions to optimize expenditure on AWS services. It also identifies and highlights Amazon EC2 instance underutilization and potential for rightsizing and cost optimization.
Unusual spending patterns could indicate scope for further optimization, unusually high demand, or could even be the result of malicious activity. The AWS Cost Anomaly Detection tool, an AWS Cost Management feature helps to monitor and detect such spending anomalies faster and at lower granularity, segmenting spend patterns based on the AWS solution being tracked.
These cost monitors create and evaluate cost allocation tags, member accounts and cost categories. The alert subscription can be configured to notify you and all other designated personnel when the cost monitor detects an anomaly (a difference between actual spend and ‘normal’ pattern that exceeds an assigned Threshold value).
How to optimize AWS cloud costs?
Your in-house team can use AWS’ range of cost optimization tools to identify potential areas for resource utilization optimization. Alternatively, you can take the help of a trusted AWS Managed Service Provider to manage, monitor and implement cost optimization tools in the AWS cloud.
AWS has a number of tools that help you track and analyze expenditure over time, some of which are:
- AWS Cost Explorer: Pattern identification, cost projection, analysis of resource utilization
- AWS Trusted Advisor: Real-time optimization recommendations
- AWS Budgets: Custom budget setting, tracking, notifications when real utilization exceeds plan
- AWS CloudTrail: AWS infrastructure logs to analyze utilization patterns
- Amazon S3 Analytics: Automated analysis of AWS storage patterns to help select data storage class
- AWS Cost and Usage Report: Granular raw data files pertaining to hourly AWS usage, for DIY analysis
Theoretically, AWS provides you with all the tools and data you need to optimize your investment in the cloud. However, if you don’t have the technical expertise, it can be confusing and intimidating. That’s when AWS Managed Service Provider partners (MSPs) can really help.
An MSP provides end-to-end solutions for customers at all stages of the AWS journey, from consultation to design, implementation, support and – of course – optimization. With the support of an MSP, you can leverage the cloud with the confidence that you are getting the best possible value from your AWS solution.
Since AWS MSPs have strong experience working with AWS’ services and tools, they can help you with cost reduction, resource optimization and other services to ensure that you get maximum value for money from your AWS solution.
So, what are you waiting for? By leveraging the tools and strategies that AWS provides, with the support of a dedicated AWS MSP, you can maximize efficiency and effectiveness and minimize cost. Work with Ziffity to save money while working with the market leader in cloud computing, using our AWS cloud cost optimization services.
Contact our team of experts today to learn more about how we can get started together.