Key ways to save on AWS costs

Amazon Web Services is the #1 cloud hosting provider but costs can spiral for businesses if they don’t keep a tight grip on usage. Here are some top tips to cut down your monthly AWS bill

As businesses continue to migrate their operations to the cloud, Amazon Web Services (AWS) has emerged as a frontrunner in providing scalable and reliable cloud computing solutions.

In the first quarter of this year, AWS revenues were $21.4 billion, showing its wide reach across businesses.

Small and Medium Enterprises (SMEs) are harnessing the power of AWS to drive innovation, scalability, and competitiveness. The cloud has revolutionised the way businesses operate, offering a flexible and robust platform for diverse workloads.

How to get the best price on cloud hostingCloud haggling: can you as a small business haggle on your cloud hosting fees? Absolutely. Even if you cannot get the headline cost down, your provider can throw in benefits and extras

However, alongside the countless benefits of AWS comes the challenge of managing costs effectively. In a rapidly evolving digital landscape, organisations must strive to strike a balance between innovation and cost efficiency. While the cloud hosts boundless potential, it also requires astute financial management to ensure a sustainable and profitable journey.

Best UK cloud hosting providers – When it comes to cloud hosting, most companies reach for one of the three public-cloud hyperscalers – AWS, Azure or Google Cloud – who between them control 81% of the market. But independent cloud hosting providers are clawing back market share. When should you go with an independent cloud hosting provider?

How to save on AWS costs

This is especially true for SMEs, often operating on smaller budgets, who must maximise the benefits of AWS while optimising costs. Every penny saved on AWS expenditures can be reinvested into growth-driving initiatives, technological enhancements or enhancing customer experiences. It’s not just about tightening the purse strings; it’s about strategically channelling resources to achieve both short-term efficiency and long-term prosperity.

#1 – monitoring your resources

Understanding the true performance needs of your resources and right-sizing them is crucial for cost-effectiveness. This can be accomplished by:

  • Eliminating underutilised or unused resources. Unnecessary or idle resources can significantly contribute to wasteful spending. SMEs should conduct regular audits to identify and eliminate resources that are consistently underutilised.
  • Analysing utilisation metrics. An examination of CPU, RAM, storage, and network utilisation data provides insights to resource efficiency. Through monitoring these metrics, SMEs can identify instances that could be downsized.

Adopting an effective resource scheduling approach can lead to substantial savings, scheduling times to start and stop that align with operational needs.

#2 – Elasticity

Elasticity, a hallmark of cloud computing, ensures that workloads are scaled to match demand, allowing payment only for utilised resources. Leveraging AWS’s autoscaling service, workloads can be dynamically adjusted based on capacity requirements, reducing costs associated with over-provisioning. Autoscaling also allows for scaling up during anticipated growth, ensuring payment only for the required capacity.

With this tool, SMEs can effortlessly scale their infrastructure up or down, ensuring that they only pay for the computing power and resources they actively use.

#3 – Strategic data storage

Effectively managing data storage and selecting the appropriate storage solutions can prevent unnecessary spending on premium storage options.

AWS offers various storage classes, each catering to specific access patterns and requirements, such as Standard, Intelligent-Tiering, Glacier, and Glacier Deep Archive. By categorizing data based on access patterns and placing it in the appropriate storage class, businesses can avoid overspending on unnecessary high-availability storage.

#4 – Measuring, monitoring and consistent improvement

Proactive measures are instrumental for reaping long-term benefits: implementing mechanisms, processes, and tools which facilitate the other pillars is crucial for consistent optimisation. This includes:

  • Defining and enforcing tagging to monitor and categorise all resources effectively.
  • Establishing metrics and KPIs to track cost optimisation progress.
  • Encouraging teams to architect with cost efficiency in mind.
  • Assigning responsibility to different teams to optimise costs.

Through adhering to these cloud cost optimisation practices, businesses can maximise the value derived from the flexibility, agility, and scalability of AWS technologies and services.

Additional steps for reducing AWS costs

Beyond these measures, there are several other steps businesses can take to reduce AWS costs:

Using spot instances

Spot instances are a great choice if you are able to be flexible about when your applications run and if they can be interrupted – well suited for data analysis, batch jobs, background processing and optional tasks.

Leveraging Amazon EC2 Spot Instances can offer discounts of up to 90 per cent by utilising spare computing capacity. While best for fault-tolerant workloads, businesses should be aware of potential service interruptions.

Spot instances may be reclaimed by AWS under certain circumstances. This could occur if the Spot price surpasses your bid price, if there is an increased demand for Spot instances, or if the supply of Spot instances becomes limited.

Adopting savings plans

Savings Plans offer flexibility based on commitment periods and spend levels, providing cost reductions for services such as Amazon EC2, AWS Fargate, and AWS Lambda.

Utilising volume discounts

AWS considers all accounts in an organisation as one account for billing purposes. Some services may qualify for lower pricing based on volume pricing tiers, providing potential savings.

Moving data to Amazon Glacier

Amazon Glacier is an economical online solution for cold storage and data archiving, operating on a pay-as-you-go framework. Similar to Amazon S3, Glacier offers storage at a remarkably reduced cost, with rates as low as $0.01 per Gigabyte per month, making it nearly ten times more budget friendly.

For rarely accessed data, moving it from costly storage solutions like Amazon S3 or EBS to Amazon Glacier, a low-cost archival solution, can yield significant cost savings.

The need for a comprehensive approach

Achieving optimal cost efficiency within the AWS ecosystem demands proactive strategies and continuous enhancements. Adopting a comprehensive approach to cost reduction not only delivers immediate financial benefits but also fosters resource optimization, increased agility, and enhanced scalability.

SMEs can leverage the wealth of AWS tools and resources to ensure prudent cloud investments, thereby amplifying innovation and growth opportunities. By embracing these key principles, SMEs can thrive within the AWS cloud while maintaining a lean and efficient cost structure.

Optimising AWS costs requires a proactive approach and a continual effort to refine and improve cloud deployments. A holistic approach to cost reduction not only leads to immediate financial benefits but also fosters improved resource optimisation, increased agility, and enhanced scalability, positioning businesses for sustainable growth in the cloud.

Embracing the abundance of AWS tools and resources for cost optimisation, organisations can make the most of their cloud investments and focus on innovation and growth.

Simon Turner is head of services at technology consultancy VeUP, which provides services to software vendors working in the Amazon Web Services (AWS) ecosystem

Further reading

Advantages of a multi-cloud strategyMulti-cloud, using more than one hosting provider simultaneously, keeps you nimble when it comes to usage pricing and helps avoid being too indebted to a single vendor

Related Topics

Amazon Web Services