May 1, 2020

16 powerful tips to lower your AWS spending

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The shift to public cloud providers like AWS offers many advantages for companies. According to AWS CEO, Andy Jassy, the conversation starter for cloud adoption is almost always cost optimization. For many companies, this means switching from the old model of using heavy CapEx for capital to invest in data centers and servers upfront to a variable expense model that is pay-as-you-go. However, organizations often forget to adapt the strategy of using the cloud. Rather, they continue to operate new services with the old mindset of traditional data centers, and because of that, they lose money.

To maximize the cost optimization model of AWS, companies need to plan accordingly and leverage the many tools that AWS provides for monitoring resource usage. In this article, we’re going to discuss the most popular, yet often overlooked, AWS cost optimization tools. This is not intended to be an ultimate guide, but it is a great place to start planning AWS usage or evaluating existing practices. I’ll spend most of the time on EC2, EBS and S3 services, but will leave hints for some others too.

Talk to your representative about AWS cost optimization

This might sound counterintuitive if we don’t look at the cloud model on a bigger scale. AWS always prefers businesses to use something rather than nothing. That’s why they will be eager to talk, share cost optimization best practices and provide their own instructions. Get in touch with your AWS account representative and show them what you’re up to.

Consider regions accordingly

It’s easy to notice that the cost for AWS services depends on the physical location where data centers are placed. This may sound obvious but migrate resources to a region with lower prices when it makes sense.

EC2 instances

Select appropriate EC2 instance types to optimize you AWS cost

An EC2 service would probably be one of the first picks for a cloud journey with AWS. With over 60 instance types available, picking the most suitable is often an overwhelming choice to make. Take a deep breath and think about the actual purpose of the instance. Based on this, you can narrow down the types that are the best fit by looking at the table below.

Always prefer the most modern CPUs

Be sure to come back to the instance type table periodically, as technology doesn’t freeze, and CPU manufacturers are coming up with more performant and less energy-consuming CPUs almost every year and AWS is implementing them.

The hint here is to check the AWS Compute Optimizer as this cost optimization tool can advise this type of change.

Consider EC2 Instance Store for temporary data

Typically, AWS users would look at EBS storage (i.e., disks) when setting up new EC2 instances. Those disks can be attached to instances, detached from them and snapshotted for data protection cases. Whenever the instance is stopped, the data remains on the disk and doesn’t go anywhere.

Aim to predict the use of services and commit upfront

Although we talk about public cloud flexibility and the shift from CapEx to OpEx, some of the AWS features that reduce invoice, namely reserved instances (RIs) and saving plans, would ironically look like going back to CapEx. However, with an actual discount of over 50%, they should be on everyone’s “best practices for implementation” list.

Object storage

Hail to object storage

AWS provides multiple storage tiers at different prices that are designed to meet requirements for performance, availability and durability. There are three broad categories of storage services offered: Object, block and file storage. Amazon’s object storage offering, Simple Storage Service (S3), is the most cost effective of the three storage categories. Within Amazon S3, you can easily move data between the storage classes further down the road to balance the frequency of access with the price of performing cost optimization. All storage types have different usage scenarios and pricing variations.

Befriend a lifecycle policy

Speaking of a lifecycle policy, it’s a no-brainer whenever you operate with AWS S3. That said, implementing a lifecycle policy requires some learning and reading the documentation before enabling it on an infrastructure.

The policy is a combination of rules for objects that have a well-defined use pattern, so you can:

  • Use lifecycle rules to manage objects throughout their lifetime
  • Automate the transition to tiered storage to lower costs
  • Expire objects based on retention needs or service-level agreements (SLAs)
This is a very powerful tool when configured properly. Learn the difference between the S3 storage classes and start playing with lifecycle rules to better fit organization needs.

Monitoring and management

Again, AWS tries hard to help companies on their cloud cost optimization journey. So, it’s developed some cost optimization tools, each targeting a certain aspect of price reduction. I’ve decided to highlight my personal preferences in hopes that they will be useful.

Automatically turn off unused instances and databases

Idle resources can be a major cost contributor to your AWS cost optimization. Letting unused instances and databases sit idle means accruing charges for something that isn’t used.

Bring the AWS Pricing Calculator into action

I’ve previously mentioned this tool in this white paper, as it allows to estimate account spending for over 40 AWS services.

Monitor consumption with standard tools

AWS Cost Explorer should be your go-to, since this instrument makes it very easy to visualize where all the money goes and address the services that consume the most.

AWS Compute Optimizer provides an overview of AWS cost optimization opportunities for resources based on the data that’s been collected and analyzed for the account (or all the accounts under the master one).

Consolidating users under a master account

If multiple people in the organization need to operate AWS, consolidated billing will not only make payments easy but can also reach a certain threshold that once met, can enable an organization to get a discount on consumed resources like S3.

Don’t forget about networking costs

AWS networking deserves its own paper, but I feel like I should mention a few important tips here anyway without going too deep in order to keep things simple.

Bonus tip for AWS cost optimization

Now that you’re armed with this information on cost management tactics, Veeam is here to help. Veeam Backup for AWS can take backups of EC2 instances to ensure its protection and perform additional operations, such as restoring systems back to AWS or even on-premises, to move data around the infrastructure as required. Moreover, it will always show a predicted AWS cost amount caused by these operations, so any protection strategy can be adjusted accordingly (check figure 15).

Conclusion on cost optimization best practices

While there is no magic button that can make all the cost optimization and cloud spending “just all right,” there are many things administrators can do about it in reality! With the number of tools and resources available, make AWS cost optimization another part of your organization’s financial routine. Invest in learning settings, various tactics and native cost optimization services now, so it will pay for itself later.


Download the full version to learn more about each of these best practices for AWS cost optimization!

About the Author

Andrey Zhelezko
Technologist, Product Strategy, Veeam Software
Andrew is a Global Technologist on the Veeam Product Strategy team. He is a certified IT professional with over a decade of industry experience. Initially doing technical support for various solutions, including Veeam Backup & Replication, he has practical expertise, which helps him speak the same language as Veeam community members. You can always find him presenting at different offline/online events, where he loves to solve the challenges associated with data protection. His motto is to help others realize the beauty and power of virtualization and cloud technologies.
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