How to Boost Profitability with AWS: Optimizing Costs on Cloud

How to Boost Profitability with AWS: Optimizing Costs on Cloud

The main goal of most businesses when they decide to migrate to the cloud is efficiency and scalability. If you are paying more than you need to, that goal is being defeated on some level. You need to manage your cloud services wisely to ensure that you’re not overspending in the cloud. Unused services and over-provisioned resources in the cloud are the drain-pipes of your IT budgets. Thus, optimizing costs helps you stay on top of your cloud spending and helps you become more profitable.

How to Boost Profitability with AWS: Optimizing Costs on Cloud

Let us take a look at some of the ways you can reduce costs for

 services by optimizing your usage and making better decisions.

Rightsizing EC2 Instances

First, you need to monitor your usage of capacity for a while and analyze it for trends. Once you establish a trend, you can scale out and buy the reserved EC2 instances. This will help you save computing costs up to 75%.

Furthermore, you also need to assess the instance family you need apart from identifying the EC2 instance size. For instance, using a Memory-Optimized EC2 Instance for an application that is not very memory-intensive is a waste of resources.

Fig. Amazon EC2 Instance Types (Google Images)

Fig. Amazon EC2 Instance Types (Google Images)

Schedule Non-Production Instances

To cut costs down to the bone, EC2 instances ideally should be started only when they have to be used. However, it is not practical. Scheduling the non-production instances is the middle ground. The instances that are used for developing, staging, testing, and QA can be scheduled to be operational during working hours. By simply applying the scheduling for working hours, you’ll be able to save about 65% of running these instances.

Fig. E2C Instance Scheduler

Fig. E2C Instance Scheduler

Choose Reserved Instances for Fixed Requirements

In the case of EC2 instances, reserved instances prove to be much cheaper than on-demand instances. The reserved instances are fixed, long-term instances whereas the on-demand instances can be created and destroyed anytime. You can save up to 72% over equivalent on-demand capacity if you go for reserved instances. Thus, for services like Amazon EC2 and Amazon RDS, it’s better to assess your needs and invest in reserved instances.

Use Spot Instances for Specific Applications

Spot instances are suitable for applications in big data, containerized workloads, CI/CD, web servers, high-performance computing, and test & development environments. Spot instances allow customers to use on-demand capacity at a 90% discount without making a term-based commitment. This makes them suitable for these fault-tolerant, scalable, and flexible applications.

Savings Plan for Flexible Needs

Another pricing model to consider is the savings plan. The AWS savings plan is a flexible pricing model which can reduce AWS computing costs up to 72%. The pricing model offers savings on Amazon EC2 instances usage, regardless of instance family, size, OS, tenancy, or AWS Region.

Delete Unattached EBS Volumes

Elastic Block Storage (EBS) volumes are attached to your E2C instances when they are launched as local block storage. When you terminate a particular instance, the EBS volume associated with it is only removed if the “delete on termination” box is checked while launching that instance. Thus, you need to make sure that your AWS doesn’t have any unattached EBS volumes.

Remove Other Zombie Resources

Just like unattached EBS volumes, there might be other resources that you don’t want anymore, but you are paying for them.

Snapshots efficiently backup your data from an EBS volume to an S3 storage bucket. Naturally, snapshots are very important for your data security. But, you must delete the ones that you don’t need anymore.

Similarly, AWS also charges you for elastic IP addresses that have no instances attached to them. The AWS Trusted Advisor helps you get a list of most of the zombie resources and delete them.

Fig. AWS Pricing Models

Fig. AWS Pricing Models

AWS Cost Management Tools

provides a feature-rich suite of cost management tools that help you make informed decisions that reduce costs. AWS cost optimization tools allow their customers to monitor and analyze costs over usage, set up alerts, budget effectively, and much more. Additionally, they also allow you to create rules and automated actions to optimize costs. Take a look at the most effective cost optimization tools offered by AWS:

AWS Cost Explorer

Cloud explorer is the one-stop solution offered by AWS to get insights on your cloud spending over time. It presents an intuitive visual interface that allows you to see monthly or daily costs and usage. Furthermore, it also allows you to take a gander at the ROI for Amazon services. It provides managers with insights about usage and costs for the past 13 months which proves to be highly useful in expense forecasting. In addition, AWS cost explorer also offers an API that enables you to access the data via your analytics tools.Fig. AWS Cost Explorer

Fig. AWS Cost Explorer

AWS CloudWatch

Prompt alerting is essential for cost optimization because it lets you know when the costs are getting out of hand. AWS CloudWatch allows you to do just that. It enables you to set alarms and alerts by setting limits on a variety of metrics that are monitored from your services. For instance, you can set an alert for when EC2 instances are utilized less than 30%. Whenever the utilization of EC2 instances drops below 30%, the alarm will be triggered. You can then right-size the instance or combine workloads to optimize costs. Thus, CloudWatch proves to be an essential tool for cost optimization.

Fig. AWS CloudWatch  (Google Images)

Fig. AWS CloudWatch  (Google Images)

AWS Trusted Advisor

AWS Trusted Advisor is a feature-rich tool that helps you optimize your AWS environment, which includes cutting down costs. It does so by providing recommendations and guidance on best practices for your AWS services. It provides automated recommendations to optimize the following:

  • EC2 reserved instance optimization and lease expiration
  • Underutilized resources (EC2 instances, EBS volumes, Amazon Redshift clusters)
  • Idle load balancers
  • Unassociated elastic IP addresses
  • Idle DB instances on Amazon RDS
  • Redundant Route 53 latency resource record sets

Fig. Trusted Advisor Dashboard

Fig. Trusted Advisor Dashboard

AWS Budgets

AWS Budgets is the most effective tool for controlling your cloud spending by setting and enforcing budgets for specific

. It allows you to set a “cost ceiling” depending on the types of resources, tags, and accounts. When the costs reach or exceed your limits, you will receive alerts through emails or messages which stop you from going over the limit. In addition, AWS Budgets also allows you to connect the budget to data points like the number of instances or data usage, apart from setting up an overall cost budget.

Conclusion

To sum up, cost efficiency is at the heart of cloud computing. Moreover, cost optimization is one of the primary pillars of

architectures. Thus, there are a lot of cost optimizations that you can apply to AWS resources. However, you must apply these optimizations based on your business priorities. In addition, you must also monitor your costs continuously to ensure that your cloud investment is as profitable as it can be.

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