AWS Cost Optimization: Top 5 Best Practices & Tools
Tags: aws, cloudcomputing, cloudpractitioner
Published: 2024-05-31 13:03:33

In order to get the most return on your cloud investment, AWS cost optimization is essential. AWS continues to gain popularity and importance for the flexible and scalable infrastructure it provides to many firms out there; as a result, managing and optimizing costs plays a significant role in its organizations’ objectives of sustaining and increasing profitability while also increasing operational performance. It is crucial for your cost optimization to run through your approaches from time to time in order to save money, become more flexible, and choose the right instances for your range of business. In this blog, we dive into the top 5 AWS cost reduction strategies and AWS cost optimization tools to enable you to get the most out of your investment in AWS cloud.


![Mind Map for AWS Cost Optimization Strategies (discussed in detail below](https://dev-to-uploads.s3.amazonaws.com/uploads/articles/7zd4ypddsdzv2vsuqkxj.jpg)



**Top 5 AWS Cost Optimization Best Practices**

**1. Right-Sizing Your Instances**
Right sizing deals with the careful assessment of your usage of different resources to fit your actual requirements. This means that it is possible to avoid over-provisioning risks and save money by choosing the right instance types for services such as EC2, RDS and Redshift among others. You will need to first locate underutilized instances and then eliminate or scale back these instances, either by de-provisioning or shrinking them.

**2. Save money by using savings plans & reserved instances**
[AWS Savings Plans](https://aws.amazon.com/savingsplans/) provides up to 72% more cost savings than on-demand pricing on AWS EC2 instances, Fargate, and Lambda. This is because the more you commit to using it, either for 1 or 3 years consistently, you will qualify for more savings. [AWS EC2 Reserved Instances](https://aws.amazon.com/ec2/pricing/reserved-instances/) are 1 or 3 year term commitments getting up to 75% off the on-demand price but for specific instances in specific regions and mostly useful for predictable loads. But you can’t decrease the instance during this period, and increasing the instance will be charged at on-demand pricing. 

**3. Leveraging Spot Instances**
[AWS EC2 Spot instances](https://aws.amazon.com/ec2/spot/) are unused AWS instances available at a bid level thus achieving discounts of 90% on an on-demand instance price. These are best used in batch processes, stateless website services, high-performance computing tasks, or big data applications and applications that can be interrupted. However, AWS can allow someone else to bid and take the instance back within two minutes if the someone has bid higher than you.

**4. Optimize Storage Costs**
A number of measures used in AWS S3 cost optimization ensure that storage costs are kept as low as possible while still ensuring that data is readily accessible. Store production files in S3/GLACIER and activity based storage tier migration to move production files between different storage tiers. This involves using the [Amazon S3 Intelligent-Tiering](https://aws.amazon.com/s3/storage-classes/intelligent-tiering/) option that enables the automatic moving of data based on their access. For long-term storage, principally use [Amazon S3 Glacier](https://aws.amazon.com/s3/storage-classes/glacier/) and, even more cost-efficient, [Amazon S3 Glacier Deep Archive](https://aws.amazon.com/s3/storage-classes/glacier/) to archive infrequently accessed data. Select the EBS volume type based on the requirement of the application and make sure that ‘Delete on termination’ checkbox is checked in order to prevent further charges when the EC2 instances are terminated.
 
**5. AWS Auto Scaling for Cost Optimization**
Use [AWS Auto Scaling Groups](https://aws.amazon.com/autoscaling/) (ASGs) to control the size of your EC2 instances rendering them either larger or smaller depending on your utilization and defined scaling policies. optimizing both performance and cost with ASGs by regularly reviewing the policies and updating them.



**Top 5 AWS Cloud Cost Optimization Tools**

**1. AWS Cost Explorer**
[AWS Cost Explorer](https://aws.amazon.com/aws-cost-management/aws-cost-explorer/) is a tool that enables users to analyze, review, control, and contain their expenditures and usage patterns on the platform over time. You can generate various reports, customize them and filter or group by various dimensions and costs. Cost Explorer forecasts future costs using historical data and alerts you to cost anomalies. 

**2. AWS Budgets**
[AWS Budgets](https://aws.amazon.com/aws-cost-management/aws-budgets/) lets you create cost and usage budgets, and informs you when a budgetary ceiling has been breached. Some of the features include having set maximum allowed cost, maximum allowed usage, maximum allowed utilization on Reserved Instance/Savings Plan, and a notification when the budgets have been surpassed. This tool can be integrated with AWS Cost Explorer, for richer visual cost analysis.

**3. AWS Trusted Advisor**
[AWS Trusted Advisor](https://aws.amazon.com/premiumsupport/technology/trusted-advisor/) is an on-demand resource that helps you to maximize your AWS usage by giving real-time recommendations. Cost Controller includes Unused Capacity which helps in identifying underutilized or idle resources. Reserved Instance Purchase Recommendations provide a guide to the appropriate purchase of Reserved Instances, and lastly Cost Saving Suggestions for identifying more savings.

**4. Amazon Web Services Cost and Usage Report (CUR)**
The [AWS Cost and Usage Report](https://aws.amazon.com/aws-cost-management/aws-cost-and-usage-reporting/) is a summary of AWS costs and usage metrics that offer detailed information on the company’s expenses. Some of the main ones that appeal to most users are for example the ability to get cost and usage information precisely and in the smallest detail possible; the ability to be able to design a report in a way that the end user would need it to be designed.

**5. AWS Compute Optimizer**
[AWS Compute Optimizer](https://aws.amazon.com/compute-optimizer/) is a service that enables you to identify the optimal AWS services to use for your instances, thereby minimizing cost and improving efficiency. This includes daily and weekly usage analytics, proposing the most suitable EC2 instance types, Auto Scaling Groups, and Lambda functions optimization.


**About Techpartner Alliance**

[Techpartner Alliance](https://www.techpartneralliance.com/) specializes in AWS and was established in 2017 by [Ravindra Katti](https://www.linkedin.com/in/ravindrakatti/), an AWS ex-seller, and [Prasad Wani](https://www.linkedin.com/in/prasadwani/), an AWS cloud architect. In our capacity as a reviewed partner of the [Well-Architected Framework Review (WAR)](https://www.techpartneralliance.com/well-architected-review/), we can perform the WAR which seeks to evaluate various architectural weaknesses in your ecosystem and then establish and implement a WAR for AWS cost management. Additionally, in our capacity as a certified service delivery partner of [AWS Graviton](https://www.techpartneralliance.com/graviton-arm-processor/), we can assess your workloads to migrate Graviton processors which provide up to a 40% price-performance saving compared to Intel x86 processors. 

Follow our [LinkedIn page](https://www.linkedin.com/company/techpartner-alliance/) for regular updates on latest tech trends and AWS cloud!

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Citations:
[1] https://spot.io/resources/aws-cost-optimization/8-tools-and-tips-to-reduce-your-cloud-costs/ 
[2] https://www.cloudzero.com/blog/aws-cost-optimization-tools/ 
[3] https://www.nops.io/blog/aws-cost-optimization-tools/ 
[4] https://aws.amazon.com/aws-cost-management/cost-optimization/ 
[5] https://docs.aws.amazon.com/whitepapers/latest/cost-optimization-laying-the-foundation/reporting-cost-optimization-tools.htm