How To Reduce AWS Costs: Top Strategies

Many companies use Amazon Web Services (AWS) to increase reliability and scalability or to ensure greater flexibility. In terms of efficiency, optimizing costs also play a central role. However, lower costs can also come with various disadvantages, such as contractual conditions or lower services. Here we will tell you how you can reduce AWS costs and optimize the cost-benefit ratio without compromising!

About Cost Optimization in AWS

Amazon Web Services (AWS) is a cloud platform that provides users with subscription services. The services list includes infrastructure solutions (servers and storage systems) and ready-made platforms (databases, development environment, etc.).

Are you already using AWS, or would you like to migrate to AWS? If the answer is “yes,” then you should think about cost efficiency. You probably already know about exciting savings opportunities such as Right Sizing or Reserved Instances. Let’s go a few steps further and present ways and means to optimize costs in an AWS environment while maintaining the desired level of performance.

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Why You Need AWS Price Optimization

Here are the main benefits of AWS cost optimization:

• Save money. This is precisely what cost optimization means. With adequately selected AWS costs optimization methods, you can save some financial resources and redirect them to other needs.
• Increase flexibility. Cost optimization can help you free up resources to scale applications with better cost efficiency. With additional resources, organizations can fund more projects to meet customer needs better or provide more resources to existing productivity programs.
• Simplify your choice. AWS provides recommendations based on millions of simulations to help you choose the most appropriate instance type and place your computing environment correctly.

7 Ways to Reduce AWS Costs

How to reduce AWS costs? There are many different ways that software engineers can use for this purpose. Let’s dive deeper into them!‍

1. Check for AWS Savings Plan

Savings Plans is a flexible pricing model that can help you reduce your bill by up to 72% compared to On-Demand prices in exchange for a one- or three-year hourly spend commitment.

We recommend AWS Reserved Instances or Savings Plans to reduce AWS costs when companies are open to longer contract terms. The longer the contract period and the higher the advance payment, the more discount you can achieve.

Savings Plans are currently available for EC2 instances, AWS Fargate and AWS Lambda. They can be applied across different regions, which makes them particularly attractive. With many other AWS services (e.g., RDS), you can switch to Reserved Instances. In practice, we recommend the Savings Plans for EC2 instances due to the combination of high flexibility and high-cost savings.

2. Monitor processors

The choice of processors is also handy for reducing AWS costs. In general, AWS offers both so-called x86 processors (Intel, AMD) and ARM processors (Graviton), but these are not compatible with each other.

AMD processors are currently available for EC2 instances and enable savings of up to 10% compared to the Intel processors offered as standard on AWS. We often recommend this option for test environments, although general use is unproblematic.

ARM-based Graviton processors are available for EC2 instances, Amazon RDS, Amazon Aurora, and Amazon ElastiCache, among others.

3. Pay attention to spot instances

With the spot instances, AWS sells unused server capacities. These are sometimes up to 90% cheaper than the regular price. However, the Spot instance may become unavailable within a few minutes. On average, customers can achieve savings of up to 60%.
How to save cost in AWS with this method most efficiently? Spot instances are the most suitable for development purposes such as sandbox environments and testing.

4. Consider “cheaper” AWS region

You can also reduce costs by choosing the AWS region. The region of India, for example, is much cheaper than the EU. Such a way of reducing AWS costs is especially possible when no personal data is processed, and the workloads are not time- and latency-critical.

However, due to European data protection regulations, most companies prefer to store and process data within the EU. Also, take into account that if you use a cheaper region, but most of your customers are from the EU region, this will negatively affect user experience.

5. Plan cloud migration

Due to their agile and elastic nature, cloud computing solutions adapt to the different scenarios inherent in the business. Thus, such a method of AWS cost reduction is quite popular and efficient.

By combining cloud adoption with the support of a strategic and specialized partner like Axon, customers can take full advantage of cloud computing: scalability, high availability, reduced time-to-market, increased competitiveness, agility, flexibility, and, of course, cost optimization.

Such a method will bring benefits of AWS price reductions over time and will serve as a basis for future improvements.

6. Consider a Free Tier

How to reduce cost in AWS if your account is new? In this case, AWS offers Free Tier access to their services:

• For EC2 750 hours per month of Linux, RHEL, or SLES t2.micro or t3.micro instance dependent on region.
• 750 Hours of Amazon RDS Single-AZ db.t2.micro, db.t3.micro, and db.t4g.micro Instances usage running MySQL, MariaDB, and PostgreSQL databases each month (applicable DB engines).
• 5 GB of secure, durable, and scalable object storage on s3.
• 1,000,000 free Lambda requests per month.
• 1 TB of Amazon CloudFront data transfer out.

You can find more information about this method on the AWS Free Tier page.

7. Billing dashboard‍

Billing Dashboard is a helpful tool for the management of your AWS budget. AWS provides extensive information about the services you use in different regions. If you want to cut Zombie Assets, Billing Dashboard is a place to start from.
You can use the AWS Billing console dashboard page to gain a general view of your AWS spending. Also, it may be handy in identifying your highest-cost service or Region and viewing trends in your spending over the past few months.

Moreover, you can use the dashboard page to see various breakdowns of your AWS usage. This is especially useful if you're a Free Tier user.

Conclusion

Reinvention isn’t just a buzzword. Small and large companies have felt pressure to introduce and accelerate digital transformation, and maintain productivity and competitiveness of their businesses.

We have considered primary ways how to reduce AWS costs. However, there are many other approaches for saving on Amazon Web Services that can be not so obvious. If your company uses AWS, then cost optimization is inevitable. This is a really interesting but tricky topic, so don’t hesitate to contact Axon engineers, who will answer all your questions!