This post is contributed by Shankar Ramachandran, SA Specialist, Cost Optimization

Introduction to AWS cost optimization

AWS’s breadth of services and pricing options offer the flexibility to effectively manage your costs and still keep the performance and capacity per your business requirement. While the fundamental process of cost optimization on AWS remains the same – monitor your AWS costs and usage, analyze the data to find savings, take action to realize the savings; in this blog, I will take a more tactical approach of reducing cost with changes in user demand.

Before you start 

Before taking any actions to reduce cost, find out the costs of AWS services, you are consuming. The AWS Free Tier provides customers the ability to explore and try out AWS services free of charge up to specified limits for each service. Use the steps in this video to check if you are exceeding the free tier limit.

Next, use AWS Cost Explorer to view and analyze your AWS costs and usage. This tool provides default reports that help you visualize cost and usage at a high level (e.g., AWS  accounts, AWS service) or at the resource level (e.g., EC2 instance ID). Start by identifying the top accounts where your costs incur using the “Monthly costs by linked account report.” Next, identify the top services that contribute to the costs within those accounts. You can do this by using the “Monthly costs by service report.” Use the hourly and resource level granularity and tags to filter and identify the top resources incurring costs.

                                                  Cost Explorer resource level granularity

Now, you should have an understanding of your AWS costs and usage. Next, let’s walk through 10 tactical things you can do today using existing AWS tools and services to reduce your AWS costs.

1. Identify Amazon EC2 instances with low-utilization and reduce cost by stopping or rightsizing

Use AWS Cost Explorer Resource Optimization to get a report of EC2 instances that are either idle or have low utilization. You can reduce costs by either stopping or downsizing these instances. Use AWS Instance Scheduler to automatically stop instances. Use AWS Operations Conductor to automatically resize the EC2 instances (based on the recommendations report from Cost Explorer).

                                              Cost Explorer rightsizing recommendations

Use AWS Compute Optimizer to look at instance type recommendations beyond downsizing within an instance family. It gives downsizing recommendations within or across instance families, upsizing recommendations to remove performance bottlenecks and recommendations for EC2 instances that are parts of an Auto Scaling group.

2. Identify Amazon EBS volumes with low-utilization and reduce cost by snapshotting then deleting them

EBS volumes that have very low activity (less than 1 IOPS per day) over a period of 7 days indicate that they are probably not in use. Identify these volumes using the Trusted Advisor Underutilized Amazon EBS Volumes Check. To reduce costs, first snapshot the volume (in case you need it later), then delete these volumes. You can automate the creation of snapshots using the Amazon Data Lifecycle Manager. Follow the steps here to delete EBS volumes.

3. Analyze Amazon S3 usage and reduce cost by leveraging lower-cost storage tiers

Use S3 Analytics to analyze storage access patterns on the object data set for 30 days or longer. It makes recommendations on where you can leverage S3 Infrequently Accessed (S3 IA) to reduce costs. You can automate moving these objects into lower-cost storage tier using Life Cycle Policies. Alternately, you can also use S3 Intelligent-Tiering, which automatically analyzes and moves your objects to the appropriate storage tier.

4. Identify Amazon RDS, Amazon Redshift instances with low utilization and reduce cost by stopping (RDS) and pausing (Redshift)

Use the Trusted Advisor Amazon RDS Idle DB instances check to identify DB instances that have not had any connection over the last 7 days. To reduce costs, stop these DB instances using the automation steps described in this blog post. For Redshift, use the Trusted Advisor Underutilized Redshift clusters check, to identify clusters which have had no connections for the last 7 days, and less than 5% cluster-wide average CPU utilization for 99% of the last 7 days. To reduce costs, pause these clusters using the steps in this blog.

                                               Pause underutilized Redshift clusters

5. Analyze Amazon DynamoDB usage and reduce cost by leveraging Autoscaling or On-demand

Analyze your DynamoDB usage by monitoring 2 metrics, ConsumedReadCapacityUnits and ConsumedWriteCapacityUnits, in CloudWatch. To automatically scale (in and out) your DynamoDB table, use the AutoScaling feature. Using the steps here, you can enable AutoScaling on your existing tables. Alternatively, you can also use the on-demand option. This option allows you to pay-per-request for reading and writes requests so that you only pay for what you use, making it easy to balance costs and performance.

                                                   DynamoDB read/write capacity mode

6. Review networking and reduce costs by deleting idle load balancers

Use the Trusted Advisor Idle Load Balancers check to get a report of load balancers that have RequestCount of less than 100 over the past 7 days. Then, use the steps here to delete these load balancers to reduce costs. Additionally, use the steps provided in this blog, review your data transfer costs using Cost Explorer.

Cost Explorer filters for EC2 Data Transfer

If data transfer from EC2 to the public internet shows up as a significant cost, consider using Amazon CloudFront. Any image, video, or static web content can be cached at AWS edge locations worldwide, using the Amazon CloudFront Content Delivery Network (CDN). CloudFront eliminates the need to over-provision capacity in order to serve potential spikes in traffic.

7. AWS Cost Optimization with Amazon EC2 Spot Instances 

If your workload is fault-tolerant, use Spot instances to reduce costs by up to 90%. Typical workload examples include big data, containerized workloads, CI/CD, web servers, high-performance computing (HPC), and other test & development workloads. Using EC2 Auto Scaling you can launch both On-Demand and Spot instances to meet a target capacity. Auto Scaling automatically takes care of requesting for Spot instances and attempts to maintain the target capacity even if your Spot instances are interrupted. You can learn more about Spot by watching this 2019 re:Invent session:

8. Review and modify EC2 AutoScaling Groups configuration

An EC2 Autoscaling group allows your EC2 fleet to expand or shrink based on demand. Review your scaling activity using either the describe-scaling-activity CLI command or on the console using the steps described here. Analyze the result to see if the scaling policy can be tuned to add instances less aggressively. Also, review your settings to see if the minimum can be reduced to serve end-user requests but with a smaller fleet size.

9. Use Reserved Instances (RI) to reduce RDS, Redshift, ElastiCache, and Elasticsearch costs

Use one year, no upfront RIs, to get a discount of up to 42% compared to On-Demand pricing. Use the recommendations provided in AWS Cost Explorer RI purchase recommendations based on your RDS, Redshift, ElastiCache, and Elasticsearch usage. Make sure you adjust the parameters to one year, no upfront. This requires a one-year commitment, but the break-even point is typically seven to nine months. I recommend doing #4 before #9

10. Use Compute Savings Plans to reduce EC2, Fargate, and Lambda costs

Compute Savings Plans automatically apply to EC2 instance usage regardless of instance family, size, AZ, region, OS, or tenancy, and also apply to Fargate and Lambda usage. Use one year, no upfront Compute Savings Plans to get a discount of up to 54% compared to On-Demand pricing. Use the recommendations provided in AWS Cost Explorer, and ensure that you have chosen compute, one year, with no upfront options. Once you sign up for Savings Plans, your compute usage is automatically charged at the discounted Savings Plans prices. Any usage beyond your commitment will be charged at regular On-Demand rates. I recommend doing #1 before #10.

What’s Next

With these 10 steps, you can save costs on EC2, Fargate, Lambda, EBS, S3, ELB, RDS, Redshift, DynamoDB, ElastiCache and Elasticsearch. I recommend setting up a budget using AWS Budgets, so that you get alerted when your cost and usage changes.

                                                          Setup an alert on forecasted costs

Using Budgets, you can set up an alert on forecasted costs too (apart from actual). This gives you the ability to get ahead of the problem and reduce costs proactively.

Conclusion

To learn more quick cost optimization techniques, watch the on-demand webinar – Nine Ways to Reduce Your AWS Bill. We are here to help you, please reach out to AWS Support and your AWS account team if you need further assistance in optimizing your AWS environment.

References

https://aws.amazon.com/blogs/compute/10-things-you-can-do-today-to-reduce-aws-costs/

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