7 Foolproof Ways to Reduce Your AWS Costs in 2023

A recent study by Canalys notes that the global expenditure on cloud infrastructure services increased by 36% to $47 billion in the second quarter of 2021. Amazon Web Services (AWS) dominates the global space with a 33.8% market share. From these statistics, you can tell that AWS is a go-to option for many organizations focused on resiliency planning, which demands expedited digitization with increased cloud usage. Moving legacy software to AWS also allows app re-platforming to ensure continuity in the cloud environment, maximizing the benefits of the new infrastructure. 

However, in a bid to experience the benefits of cloud computing through migration from legacy systems to AWS, businesses often face various challenges, such as high upfront investments and growing bills after migration, which can be perplexing to a typical business owner. That said, optimizing AWS costs sounds like a good plan for any organization. Here is a quick guide highlighting what AWS cloud cost optimization entails, when to think about optimizing AWS costs, 7 best practices for getting started, and AWS cost optimization checklist.

So, What is Cost Optimization in AWS?

Cloud cost optimization entails reducing the overall expenditure your business incurs on AWS cloud computing by spotting mismanaged resources, reserving capacity for better discounts, reducing AWS data transfer costs, and eliminating waste. 

Top analysts from Gartner, Craig Lowery, and Brandon Medford note that businesses waste up to 70% of cloud costs unknowingly. There are various factors affecting AWS cloud cost, so let’s distinguish some basic service types which ultimately create AWS cost estimates:

• AWS server type; 
• Number of servers;
• Database usage;
• Storage capacity and size;
• Data transfer costs;
• Domain costs. 

Cost optimization techniques in AWS help your business cut its cloud computing budget while maintaining the required performance and capacity. In the long haul, these cost optimization practices help your business achieve the highest saving potential in a bid to realize its overarching goals. Doesn’t it sound prudent to save a couple of thousands and use the budget to expand your organization?

When It’s Time to Think About AWS Price Optimization

Typically, the burden of AWS cost optimization lies with the business owner. But how do you know that it’s time to reduce your AWS operational costs? You need to be wary of some costs that seem to be out of control. 

That said here is a detailed breakdown of AWS costs:

EC2 instances – virtual servers in AWS Elastic Computing Cloud that allow customers to run applications on the infrastructure. 

EC2 instances on your AWS server account for the biggest costs, about 62%. The most expensive EC2 instance is the p3dn. 24xlarge. Running it on a Linux OS costs about $31.212 per hour and $35.628 per hour on a Windows OS. 

EBS (elastic block storage) – EBS is a block-level storage solution used by AWS customers alongside E2C cloud service to store persistent data. EBS storage can account for up to 8% of AWS costs. Here, AWS can charge you for restoring EBS volumes and snapshots. 

RDS – Amazon Relational Database Service (RDS) facilitates the setup, operation, and scaling of relational databases in cloud infrastructure. RDS can account for 7% of AWS costs. AWS includes the costs of Oracle database licenses in the RDS service price since customers don’t have to bring their licenses. 

Other services – Other services, such as outbound data transfer, storage, and computing may account for up to 17% of AWS costs. 

As a result, unreasonably high storage bills might mean that your infrastructure stores obsolete EBS (elastic block storage) volumes or the cloud sizing doesn’t fit your needs. Either way, you can track cloud costs on your Billing and Cost Management console, but it wouldn’t be helpful unless you know the specific ways of AWS costs optimization.

7 Ways to Reduce AWS Costs

AWS customers can enjoy cloud computing services under various EC2 pricing models such as On-Demand, Spot Instances, Reserved Instances, Savings Plans, Dedicated Hosts, and AWS Free Tier which comes with several limitations. 

Price optimization comes in after understanding the services you consume. Here are expert insights on how to reduce AWS cost efficiency for each model. 

1. Check for AWS Savings Plans

Some businesses are pretty stable and can predict their resources requirements over a certain duration. If that is the case in your business, you can start cost optimization on AWS by making annual commitments for Fargate and EC2. That means you are promising to use a steady amount of cloud computing services between 1 to 3 years. 

EC2 launch type

EC2 launch types give AWS customers greater control over how they can customize their cloud environment. For instance, you can leverage EC2 launches to configure your cloud environment with regard to the underlying business needs in terms of network, GPU, and security. 

Fargate

Fargate launch types come in handy when building and maintaining containerized applications. With Fargate, you can match resources with tasks to minimize the need for server management, or enhance security by isolating applications by design. 

In general, you can reduce your AWS costs even more by choosing the All Upfront payment plan lasting for 3 years. Typically, you make one upfront payment and benefit from a steep discount of up to 63% in the third-year term. This is especially if you have everything figured out pretty well, including seasonal demands for your product or service to ensure that you only pay for your required usage. 

Has the time of cloud migration already come? Check how you can estimate transition costs. . How to Estimate the Cost of Cloud Migration

Tip from ModLogix, note that the service provider will charge any extra items beyond the agreed usage or limits at the usual on-demand rates. That said, it’s prudent to get your forecast right. Opt for an annual commitment to minimize exceeding risks.

2. Consider Architecture Improvements

Not all guides on how to reduce AWS costs will tell you about architecture improvements during cloud migration as viable options.

These practical tips for re-architecting help you make software systems extensible for future growth. Consider These Things Before Legacy Application Re-architecting

3. Eliminate Unattached EBS Volumes and Aged Snapshots

EBS snapshots, which are basically backups of your data, are essential for recovery purposes. However, this is mostly true for only recent snapshots. Think of aged snapshots as obsolete, especially after serving their intended purposes. Unless you delete aged snapshots, you’ll continue paying for them.

4. Get Rid of Zombie Assets

In a layman’s understanding, “zombie assets” are obsolete or unused assets that exist within your infrastructure, contributing to unnecessarily high AWS costs. In AWS and cost optimization, zombie assets are considered as RDS and EC2 instances’ failed components and underutilized Elastic Load Balancers. Typically, load balancers are used to distribute system traffic but often cause surges in AWS costs when they remain unused. Consult ModLogix today and terminate zombie assets in your infrastructure to optimize AWS costs.

5. Rightsize EC2 Instances

It’s common for AWS customers to incur the costs of what they provision instead of use, unknowingly. For instance, a business with an EC2 instance provision of 8 vCPUs and 16 GiBS memory will pay for this capacity, regardless of what it uses in the real sense. In that case, this business is paying for over-provisioned instances, which can be pretty expensive.  

But how do you right-size EC2 instances? First, you need to: 

• Turn off idle instances. You can turn off non-production instances at night and during weekends to save money. 
• Understand your memory and CPU usage. Monitor disk I/O, network, disk space, and disk swap utilization to determine what you need to use on average. 
• Leverage AWS Well-Architected framework. This tip gives you insights into trade-offs and implications of your decisions to spot opportunities that require improvement.

Choose or migrate to the right instance family. Rightsize to migrate to the right instance family and save costs on infrastructure maintenance.

6. Minimize EC2 Costs

AWS customers can cut their EC2 costs by leveraging Amazon EC2 Spot Instances, especially with a fault-tolerant workload. Spot Instances are cost-effective because they use spare EC2 capacity available for less than the On-Demand model. 

Spot Instances allow you to request unused EC2 instances at discounted rates, lowering your overall Amazon EC2 costs. This move can help you save up to 90% of AWS costs when it comes to specific workloads, such as CI/CD, high-performance computing (HPC), and containerized workloads. 

Other fault-tolerant workloads that can work with Amazon EC2 Spot instances include big data and web servers.

7. Cloud Migration Planning

One of the ways of minimizing AWS costs is by planning cloud migration to minimize unnecessarily high upfront costs. Some of the main areas that you need to address or consider and realign with your budget include resource allocation. 

That said, here are vital tips for cloud migration planning:

• Create a data migration plan to minimize future storage bills;
• Assume the migration-architect role to determine migration priorities;
• Choose the right level of cloud integration — shallow or deep cloud integration;
• Decide whether you want single or multi-cloud computing;
• Do necessary refactoring first to minimize the actual migration costs;
• Find a reliable and experienced cloud migration company.

Learn 7 steps of a successful migration process. Guide to Cloud Migration Strategy Process

Essential Checklist for Optimizing AWS Costs from ModLogix

Saving IT costs are among the reasons why companies are moving to the cloud. There are basic cost optimization pillars for AWS regardless of your business size or industry. 

To put it in better perspective, here is a must-have AWS cost optimization checklist. 

• Optimize cloud migration costs. It will help if you plan the migration accurately to minimize the costs of cloud migration services first before optimizing the expenses incurred on infrastructure maintenance. Understand the pre and post-migration costs before forging an actionable plan to execute. 

Pre-migration costs include deferred expenses, applications reconfiguration, and onboarding education. On the other hand, post-migration costs may include performance tests, resources underutilization, and security expenses. 

• Increase elasticity by leveraging AWS Auto Scaling. AWS comes with an in-built AWS Instance Scheduler to automate your Amazon RDS and EC2 instance’s start and stop plans. That way, you can shut down instances during off-use hours. 

• Rightsize your instances with regards to the current resources in use. In other words, rightsizing entails going for the most affordable instances that match your business performance needs. In that case, consider how you utilize RAM (Random Access Memory), storage network, and CPU (Central processing unit). 

• Leverage the right cost model within your budget. Take advantage of the AWS Cost Explorer to understand the right on-demand, spot, and reserved instances using EC2 pricing models. Even better, you can use the Trusted Advisor feature to ensure you get this right from the word go. 

• Optimize your storage by deleting obsolete EBS volumes and snapshots. This saves you the costs of storing what your business no longer needs. Besides establishing a routine for optimizing storage, you can also leverage AWS cost and reporting tools to monitor unwarranted charges on storage. 

• Use cost-effective resources, including instances and workloads. In that case, AWS Managed Services can come in handy to help you implement this. 

• Measure results and optimize over time.

• Include cloud financial management practices in your AWS cost optimization best practices. Cloud financial management, also known as FinOps, entails leveraging cloud-combining systems, culture, and best practices to understand cloud costs. 

• Work with a trusted cloud migration vendor who will lead you through all the vital processes at reasonable rates.

How to choose a qualified vendor for your cloud migration project? Ask these questions. 9 Questions to Validate Your Legacy Modernization Vendor Before Starting the Cloud Migration Process

Our Experience

Nearly all businesses are considering or already implementing cloud migration to ease increasing resource demands, innovate faster, reduce IT costs, and shift to all operations as-a-service. ModLogix is also your go-to service provider when upgrading AngularJS to Angular or when it comes to the integration of legacy systems. We have an experienced and dedicated team to help your business maximize the value of cloud computing by migrating to AWS efficiently with zero to minimum exposure to migration pitfalls. 

What’s in for you? We help you upgrade from old or obsolete software to new platforms, technology stacks, and cloud software. All this comes at a budget-friendly cost with bonus services on automatic software upgrades, greater processing capabilities, data control and loss prevention, and cost-efficient maintenance. Reach out to our team for AWS cloud migration services if your software system exhibits limited mobility and compatibility or experience unreasonably high maintenance costs. You can also contact us if you need a cloud infrastructure audit or a boost on software operability.

Over to You 

Optimizing AWS costs helps businesses maximize their saving strategies and channel more monetary resources to important business areas, such as expansion. Leverage this guide and know how to reduce AWS costs for long-term sustainability. Remember, reducing AWS bills starts with you, not the service provider. We can help you optimize your cloud migration plan to minimize high upfront costs and ongoing bills. Let us help you get the most out of AWS without breaking the bank!