AWS Cost Optimization Strategies

AWS Cost Optimization Strategies

1. Appropriate Provisioning

Resource Management

• Provision only necessary resources

• Monitor and shut down unused instances

• Use CloudWatch for utilization monitoring

Consolidation Strategies

• Combine similar resources for better efficiency

• Example: Consolidating DynamoDB databases

  • Multiple small databases have minimum provisioning requirements

  • Consolidation enables better utilization of read/write capacity units

• Case study: Database consolidation

  • Original: Four db.t2.small multi-AZ databases at $287.80

  • Consolidated: Single larger database for cost savings

2. Right-Sizing

Implementation Strategies

• Use lowest-cost resources meeting technical requirements

• Design for consistent resource utilization

• Implement loosely coupled architectures

  • Smooths demand patterns

  • Reduces spikes and valleys

  • Creates predictable demand profiles

3. Purchase Options

Instance Purchasing Strategies

• Reserved Instances

  • Best for permanent applications

  • Significant cost savings for long-term use

• Spot Instances

  • Ideal for temporary horizontal scaling

  • Maximum cost savings (up to 79% off on-demand)

• EC2 Fleet

  • Defines target mix of instance types

  • Combines On-Demand, Reserved, and Spot instances

Pricing Example (m5.2xlarge)

• On-demand price: $0.38

• 1-year reserve: 40% savings

• Spot instance: 79% savings

4. Regional Price Optimization

Considerations

• Prices vary by region

• Lower-cost regions for non-location-specific services

• Use CloudFront and Route 53 for latency management

Example: S3 Standard Storage (First 50 TB)

• us-west-2: Lowest cost per gigabyte

• Costs increase in other regions

5. Managed Services Utilization

Benefits

• Reduced administrative overhead

• Lower total cost of ownership

• Decreased complexity

Recommended Services

• RDS instead of EC2 for MySQL

• Redshift

• Fargate

• MapReduce (EMR)

6. Data Transfer Optimization

Cost Considerations

• Inbound data transfer: Free

• Outbound and inter-region transfer: Charged

• Significant impact on total costs

Direct Connect Evaluation

• Higher upfront costs

• Potentially more cost-effective long-term

• Depends on:

  • Data volume requirements

  • Speed requirements

  • Transfer patterns

Best Practices

• Regular resource utilization review

• Proactive monitoring and adjustment

• Balance between performance and cost

• Consider long-term vs. short-term needs

• Evaluate managed service opportunities