3 Key Areas of AWS Cost Optimization

For most businesses, there are two primary motivators for moving to AWS (and to public cloud in general). The first is to engage in data center modernization, tapping into a rich ecosystem of technology innovation that helps you drive digital initiatives within the business. The other factor is optimizing costs. As a practical matter, you’ll have opportunities for AWS cost optimization no matter why you are choosing Amazon Web Services. We’ll explore three key areas where you can find cost optimization opportunities with AWS, but first a quick note.

We’re providing a business perspective of cost optimization here, looking at the kinds of issues business managers are familiar with and concerned about. It’s important to be aware that choices in services, storage types and computing capacity, and software licensing have pros and cons with respect to issues such as application performance, application availability and data latency. If your cloud architect expresses concern about a cost optimization plan, listen. If you don’t have a cloud architect, we’re happy to discuss how we can save you 20%—simply drop us a line.

Optimize costs with smart service selections

To start at the beginning, you’ll probably be using the cloud to run workloads, and you’ll need to choose between two ways of using AWS cloud. One way is to help yourself to AWS resources, then use and manage them as you see fit. You create your virtual machines, provision them, and maintain them according to your needs. This is the way EC2 cloud instances work; you are in charge and therefore have maximum flexibility.

The alternative is to let AWS create and manage cloud instances for you. That allows you to focus on the workload you want to run without worrying about the virtual machine, its OS, its health, etc. Amazon takes care of all of that, including backups. This is the idea behind RDS. You keep operational hassles to a minimum. But as you might guess, that ease of use comes with a price.

How much of a price?  For one customer looking at AWS vs another public cloud vendor, we found that by running their SQL workloads on open-source PostgreSQL running on Amazon RDS they would save 30% versus running SQL Server on Amazon EC2 or virtual machines with the other cloud vendor.

Containerization is another example. Fargate is more expensive than EKS as a managed service. However, when you consider the labor cost to manage EKS, Fargate can actually be less expensive to operate (less people, less complexity). That’s the tradeoff you have to consider.  Both manage containers well and both offer serverless and EC2 options, so it boils down to the use case that best fits your business.

Optimize costs relating to storage

Next up, we consider storage costs. Amazon S3 is  a scalable, durable, highly available, publicly accessible data storage solution that offers a half dozen classes of service, each intended for particular use cases, so you can find a class that meets your business's specific needs. For example, if your primary need is long-term data retention, S3 Glacier Deep Archive offers the lowest cost to store data (even up to 10 years). If your focus is, say, disaster recovery, your best bet may be S3 Standard-IA, which can be several times less costly than S3 Standard.

Although S3 Standard can be more costly, it’s a good choice for businesses that need frequent, high availability access to their cloud data to support workloads such as cloud, mobile, or gaming apps. And if you don't yet have a complete picture of your cloud data needs, S3 Intelligent-Tiering monitors your storage and automatically moves data to the most cost-effective storage tier. It also moves data back to the frequent-access tier when it recognizes that you are using it more frequently.

Having said that, if you have opted for Amazon Elastic Block Store (EBS) instead of S3, you still have some highly effective way to optimize your costs. Although you choose EBS over S3 for performance reasons, there is still a big picture cost benefit of Amazon EBS, which is that you pay only for what you use. But beyond that, EBS pricing ranges from $0.10 per GB-month of provisioned storage down to a comparatively thrifty $0.025 per GB-month of provisioned storage, which are the costs for General Purpose SSD (gp2) and Cold HDD (sc1), respectively. That's a 4x difference, with other stops in-between, that is entirely within your control.

Optimize costs associated with software licensing

Our third focus here is on software licensing, because paying attention to licensing options can pay off with AWS. Microsoft software will serve as a good example. One cost optimization strategy is to take advantage of AWS’s pay-as-you-go licensing for Windows Server or SQL Server. If you don’t have a consistent need for either, this can be advantageous. Why license software you don’t need?

Alternatively, if you already have licenses, you can use them on AWS by importing the license image. In this way you avoid paying for a license twice. The same strategies apply to many other software licensing scenarios.

Discover many more ways to optimize costs with AWS

Although the cost optimization strategies we considered here can have a significant impact on your cloud expenses, there are many other ways to optimize costs. But you don’t have to be a cloud expert to increase the value you receive from your AWS investment. We’d be happy to help you explore some of the possibilities, just let us know. Our outcome-based approach for cost optimization yields, on average, a 20% savings on your AWS environment when powered by our CXOS managed services platform. We look forward to hearing from you.






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