The “3 R’s” of Lowering AWS Costs


The original version of this post was written by Brett Gillett, owner of Curious Orbit Cloud Consulting Inc., an AWS Consulting Partner, and featured on the Curious Orbit blog.

3 steps to success

EC2 costs are typically the largest monthly expenditure for AWS customers, comprising up to 75% of total costs. As such, EC2 optimization is one of the most effective means of maximizing your cloud ROI.

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There are key steps to cutting down on monthly EC2 expenses: reducing infrastructure, rightsizing, and purchasing Reserved Instances.

Step 1: Reduce

In many cases, AWS instances deployed for a one-off project are subsequently kept up and running. AWS customers continue to incur a monthly cost to maintain forgotten instances. Terminating these “zombie” instances is a quick and effective way to reduce your AWS bill substantially. This can be accomplished by checking for unused instances on your AWS account, taking a snapshot (as a backup, an AMI should be created), and eliminating the instance.

Step 2: Rightsize

Overprovisioning is another common misstep which can lead to unnecessarily high AWS expenditures, with some customers utilizing as little as 5% of CPU. Utilization should be regarded as a key performance indicator for assessing the efficiency of your cloud environment. Underutilized EC2 instances can be identified using native solutions from AWS such Trusted Advisor (for AWS Business or Enterprise Support customers), or CloudWatch (other AWS customers), or third-party Cloud Service Management platforms such as CloudHealth. The benefit of third-party solutions is that it can give you visibility into performance metrics beyond CPU, namely memory and disk utilization.

Step 3: Reserve

After removing those “zombie” instances and rightsizing your other EC2 instances, you may want to think about purchasing Reserved Instances to further reduce your monthly AWS spend. With Reserved Instances, you have the option of making either a 1-year or 3-year commitment. Moreover, you can either choose to make a partial upfront payment or pay no upfront cost. Making a long-term commitment and/or paying partially upfront leads to increased savings. Ideal candidates for Reserved Instances include those which are used to host web or application servers.

Final Thoughts: Selecting the Right Instance Type

Five instance types are available in AWS: General Purpose, Storage Optimized, Memory Optimized, Compute Optimized, and GPU. Selecting the ideal instance type greatly enhances your ability to rightsize and purchase Reserved Instances. As such, you should make sure that you understand the unique nature of a particular workload before making a purchase decision.