May 7th, 2019
First Steps to Cost Optimization on AWS
By Ted Swinyar

Millions of words have been written about the myriad of best practices, AWS tools, and third-party resources that can help you avoid common spending “gotchas” in the Cloud. However, the flood of options available can be overwhelming. Let’s focus in on a few easy starting points to help you plan well and keep a firm handle on your costs once deployed.

One last thing before we get started: the better you understand your workload’s requirements the better you will be able to optimize your costs—including factors such as network traffic, the region that your customers are in, and service level requirements.

Simple Monthly Calculator (and Its Cousins)

If you are new to AWS and want to estimate costs the venerable Simple Monthly Calculator (SMC) should be your first stop. While not particularly fancy, if you need to quickly figure out what your anticipated costs for a variety of services are this is a great place to start. It’s a barebones interface with a lot of options that can be overwhelming at first. Invest an hour familiarizing yourself and you’ll find it is immensely valuable for planning new deployments or changes to a current environment.

Unfortunately, it is getting very long in the tooth and hasn’t been updated to include services that are critical in a modern cloud architecture such as Lambda, Glue, SageMaker, or any of the AWS container services. With that said, of the first-party AWS calculators it is by far the most comprehensive in what it includes.

(Click here for a blog article by Jeff Barr introducing the SMC way back in 2009 that is still highly relevant)

Confusingly, AWS offers two other calculators that provide similar but slightly different approaches. The AWS Total Cost of Ownership Calculator is focused specifically on executive level cost comparisons for migrations to EC2 from on-premises. To support this decision making it includes additional costs such as labor and data center costs but does not provide the SMC’s deep granularity or additional services.

AWS also offers the AWS Pricing Calculator. This provides a more user-friendly approach to estimating costs for EC2 but is severely limited in what other services it supports. Currently AWS DataSync, AWS Transfer for SFTP, AWS Storage Gateway, and AWS Athena are the only other services that the calculator currently supports. In most scenarios the SMC is a preferable option because it supports a more comprehensive set of services.

If you already have a workload on AWS, don’t forget the AWS Trusted Advisor Service. If you have a Business Support or Enterprise Support plan you get access to the full set of Trusted Advisor checks and recommendations which includes suggestions on how to reduce your overall costs.

Know and Love the Free Tier

For those just dipping their toes into AWS there are a number of services that you can use at no cost use up to a certain limit or within certain parameters. Some of these offers expire twelve months after signing up and some never expire. While you shouldn’t expect to run a global ecommerce business on the free tier, it’s certainly possible to achieve some meaningful business results with something like Lambda’s free tier of 1 million requests per month—or prototype a new application with the 750 free hours EC2 and RDS each provide.

For lots more details, click HERE.

Cost Explorer

To get a deeper understanding of what is showing up on your bill, the AWS Cost Explorer is an invaluable resource for visualizing what is driving your current spend and getting (limited) projections of expected costs. Its usefulness for cost analysis goes up immeasurably if you are consistently tagging your AWS resources since that enables additional axes to pivot the cost data set around.

Your AWS Team

One of the critical resources for long-term success is your AWS account management team. If you need help and don’t know where to look next for cost-optimization they can often point you in the right direction. They can also help introduce you to programs for exploring new services in highly cost-effective manners with partners like 1Strategy.

Well-Architected Review

No matter how experienced you are with AWS, it’s always helpful to have another pair of eyes reviewing your configuration to point out opportunities for savings you may have missed. The AWS Well-Architected Review Program brings a team like ours to perform a review of (among other things!) how well your workload is cost-optimized. These reviews are designed to provide actionable recommendations to help you be successful—think expert architecture review and not audit! They can be performed on your own using the Well-Architected Tool, but to get the most benefit we recommend engaging a partner like us who can have a deeper conversation about your needs and what would work best with your specific needs. Don’t forget to ask your preferred partner or AWS team if funding options are available, which will increase the value of the review even more. As a preferred Partner in the AWS Partner Network, 1Strategy has several Well-Architected Review offerings, with a variety of funding options to meet the needs of your specific use-case.

Reserved Instances & Spot Instances

If your business has EC2 instances that you know will be necessary for a while, make sure to understand what Reserved Instance (RI) pricing can do for you. By committing to a longer term of service you can be eligible for savings of up to 75% compared to On-Demand pricing. Even if you aren’t willing to make the longest commitment you can still achieve significant discounts while maintaining flexibility for the future. Find out more at Reserved Instance Pricing.

Spot instances are another way of achieving significant cost savings with EC2 by purchasing spare capacity at up to 90% off. There’s a bit more work involved compared to RIs but if you have flexibility for when your compute occurs and can engineer your workload to be okay with potential disruption you can save significant money. EC2 Fleet is a new mechanism for taking a lot of the hassle out of leveraging spot instances (and RIs!) that is worth exploring if any of this sounds interesting. Check it out HERE for an introduction to what’s new.

You can find lots more information at Spot Instances.

AWS Pricing Documentation

All of the resources previously listed should help you quickly get started understanding how to save money on AWS, but to build a deeper understanding of AWS service pricing the official pricing information is a must-read.

Wrapping Things Up

Knowing where to start when it comes to saving money in AWS can be confusing, so hopefully this article gave you several good places to start. As you become more familiar with these foundations you can branch out.

Start small, take advantage of the tools available, and don’t forget the AWS teams and partners who can help point you in the right direction. If you’d like to save money on AWS reach out to 1Strategy and we can help! We’d love to share more about how we helped customers like F5 Networks, The Seattle Times, and Backcountry cut their bills by significant amounts.