15 best practices you can adapt in 2022 for effective AWS cost optimization

When it comes to cloud solution providers, Amazon Web Services have been leading the market and is one of the most used and go-to for small and major organizations because of its ease of availability, scalability, and durability. Although because of its inherent elasticity and scalability, AWS can be opaque and difficult to analyze tending to give rise to uncontrolled costsFor this AWS has come up with a number of tools over the past few years to help organizations manage and optimize their costs.

Before we look into the top AWS costs optimization tools offered by AWS, let’s look at some of the AWS best practices, you as an organization, can do for cloud cost optimization-

  1. If workloads don’t need to run all the time, schedule on and off-hours.
  2. Identify Amazon EC2 instances with low utilization and minimize cost by rightsizing them i.e., right-size your provisions to match your needs.
  3. When launching an EC2 instance, check the “delete on termination” box. On doing this, the unattached EBS volumes are immediately removed when the attached instance is terminated.
  4. Find and release unattached IP addresses after terminating the instances to which they are attached.
  5. Keep your most recent snapshot for a few weeks, then delete it after you take more recent snapshots as they can restore your data in the event of a disaster.
  6. Decide which workloads to use with reserved instances and which ones to use with On-Demand Pricing.
  7. Use optimization tools to find and terminate unused Elastic Load Balancers and instances that failed to launch.
  8. Transfer data you infrequently use to a lower-cost tier
  9. Upgrade to the latest AWS instance generation to improve performance at the same or lower cost
  10. Set up a master AWS organization payer account for monitoring. Separate accounts make it very hard to track cloud costs down the road, the master account becomes a single destination for the company’s total cloud spend. Sources like CloudWatch, CloudTrail, and VPC flow logs provide context as to what’s happening in the system. To be able to link this context to billing, your team needs to make sure they’re collecting it. After that, start keeping track of your expenses. Enabling cost and usage reporting allows for a review of previous spending and aids in the identification of unusual costs.
  11. Organize and Report Cost and Usage-based on User-Defined Methods- To achieve cost transparency and accountability, you need to have a unified view of your billing and usage and be able to organize your cost and usage data. AWS provides tools for you to get a single pane view for your AWS cost and usage incurred by all of your users.
  • Trace cost and usage information back to specific teams, projects, and business initiatives- With AWS Cost Allocation Tags, and AWS Marketplace Vendor Metered Tagging, you can apply meaningful metadata to your AWS usage and software purchased through AWS Marketplace. AWS Cost Explorer, AWS Cost & Usage Reports, and AWS Budgets all include metadata information and grouping options.
  • Understand cost trends and drivers through a single pane view of your cost and usage information- With AWS Cost Explorer, you will have an out-of-the-box reporting solution to visualize your cost and usage by filtering and grouping with a few dimensions. You can retrieve  AWS Cost & Usage Report (CUR) data from the Amazon S3 bucket, query CUR using Amazon Athena, or visualize CUR data in Amazon QuickSight for greater granularity.
  • Report and allocate your AWS costs for multi-tenant software applications by a simple process- AWS Application Cost Profiler allows you to measure costs for software applications shared by multiple tenants. You can gather and ingest tenant usage data to Application Cost Profiler using your own metering applications or one of the supported logging mechanisms, which will then correlate the data with your AWS Billing information and provide a tenant cost report.

12. Make cost the first-class metric by keeping in mind different factors like unit costs, idle costs, innovation/cost, cost/load efficiency ratio.

13. Define other metrics important to business goals like cost per customer, cost per feature, cost per team Get the right data to the right people at the right time

14. Improve Planning with Flexible Forecasting and Budgeting- AWS provides forecasts based on your cost and usage history and allows you to set budget thresholds and alerts, so you can stay informed whenever cost and usage are forecasted to or exceed the threshold limit. You can also set reservation utilization and/or coverage targets for your Reserved Instances and Savings Plans and monitor how they are progressing towards your target.

15. Reduce Costs with Resource and Pricing Recommendations- Customers can take control of their costs with AWS and continuously optimize their spending. You can choose from a number of AWS pricing models and resources to fit your performance and cost-efficiency needs, and change as needed. We also make pricing model recommendations based on your usage patterns (up to 72 percent with Reserved Instances and Savings Plans, and up to 90 percent with Spot Instances), so you can save even more money without sacrificing workload performance.

Best AWS Tools

  • AWS Cost Explorer

AWS Cost Explorer has an easy-to-use interface for visualizing, understanding and managing your AWS costs and usage over time. You can create custom reports that analyze cost and usage data. Through this, you can analyze your data at a high level by monitoring total costs and usage across all accounts.

  • AWS Cost and Usage Report

AWS sends all billing data to an S3 bucket called Cost and Usage Report (CUR). This report may contain millions of line items tracking cost, utilization, Savings Plans, Reserved Instances, and other relevant data. Customers can use other AWS tools to filter the Cost and Usage Report based on tags, budgets, and accounts. At an additional cost, the Cost and Usage Report can be ingested into other AWS services such as Athena, Redshift, and QuickSight for further customization within the AWS environment.

  • AWS Cost Anomaly Detection

AWS Cost Anomaly Detection helps you reduce cost surprises and gain more control. It uses advanced Machine Learning technologies to uncover unusual spending patterns and root causes, so you can take action immediately. With three simple steps, you can create your own contextualized monitor and receive alerts when any anomalous spend is detected. Allow builders to work while AWS Cost Anomaly Detection keeps track of your spending and helps you avoid billing surprises.

Create AWS Cost Anomaly Detection via the AWS Cost Explorer API or directly in the Cost Management Console to get started. AWS will send you individual alerts or a daily or weekly summary through SNS or email once you’ve set up your monitor and alert preferences. AWS Cost Explorer also allows you to monitor and perform your own anomaly analysis.

  • AWS CloudWatch Anomaly Detection

The anomaly detection feature will check for standard patterns of cloud utilization and costs based on historical usage patterns and send notifications if behavior deviates from that expected behavior.

  •  AWS Cost Categories

Customers can use AWS Cost Categories to group costs from different accounts or tags into a single category. The AWS Cost Explorer, Budgets, and Cost and Usage Reports tools will then show costs for these categories.

  • AWS Trusted Advisor

AWS Trusted Advisor provides recommendations for how you can optimize your AWS environment, including improving your costs.

Checks are used by trusted Advisor to assess your account. These tests identify ways to improve your AWS infrastructure’s security and performance, lower expenses, and keep track of service quotas. Then, to optimize your services and resources, you can follow the check recommendations.

  • AWS Budgets

AWS Budgets allows you to create a “cost ceiling” based on resource categories, tags, and accounts so that if your costs exceed your budget, you’ll be notified so you can intervene before going over. You can also monitor the public cloud for instances that may affect your costs using AWS CloudWatch, Cost and Usage Report, Cloudtrail, and S3 Analytics.

  •  AWS Compute Optimizer

Rightsizing, or matching the resources allocated to the actual needs of the workload, is one of the most efficient ways to cut costs and improve the performance of your cloud infrastructure. AWS Compute Optimizer makes rightsizing recommendations for workloads based on AWS EC2 instances, Elastic Block Store (EBS), and AWS Lambda to reduce cost and enhance performance.

Amazon Elastic Container Service (Amazon ECS) is a fully managed container orchestration service while Amazon Elastic Kubernetes Service (Amazon EKS) gives you the flexibility to start, run, and scale Kubernetes applications in the AWS cloud or on-premises.

Want to see OpsLyft in action?

These AWS native tools help organizations gain visibility and help monitor cloud costs and usage. However, as organizations mature in their cloud journey, more complex cloud cost optimization challenges arise. OpsLyft provides a 360-degree view of your cloud infrastructure with real-time data coupled with the cost impact of each feature, project, or product. We aim to provide your teams with transparent, accurate cost data reconciled with your actual cloud bill.

If you are struggling with/facing any of the cloud problems we’ve discussed above, schedule a demo and take a look at the solutions we have built to handle the same for you.
We will give you a complete walkthrough of it and tell you more about how it can benefit your organization.
Feel free to contact us for other DevOps-related queries at contact@opslyft.com

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