Optimizing AWS Architecture for Cost Management

Using AWS services for your projects is a great option, but getting unexpected huge AWS bills can be a nightmare. You must know the cost factors of AWS services before you start using them. This article will discuss how you can optimize AWS architecture for better cost management using AWS cost management tools, following best practices, and applying cost optimization methods.

Typical AWS Costs

A typical AWS cost lists in AWS bills based on compute, storage, and data transfer services. 

• Compute services charge you on an hourly basis, which means you can use AWS compute services at a very low price as you only have to pay for those resources you have used. If you are using the services only for 1 hour, you would be spending only for that time. 
• AWS storage services charge you per gigabyte, so billing starts with almost as little as 1 GB. When it comes to scaling you pay as you use more resources.
• For data transfer services by AWS, AWS also charges you per gigabyte for the data that goes out. 

AWS has these three pricing models: Pay as you go, pay less as you use more, and save when you reserve. 

• Pay as you go: AWS has a very flexible pricing model, and it charges you only for the AWS resources you use. If you need 5 compute instances for 10 hours, you only pay for that much. With storage, if you want 40 GB for the first month but end up using only 10 GB, in the pay as you go model, you start with 10 GB and scale it as per the needs so that you do not end up wasting 30 GB of storage space. It’s possible to save a lot optimizing the pay as you go model, instead of paying upfront and losing more.
• Pay less as you use more: The more services you use of AWS, the charges you incur will be lower. With this pricing model, you have a chance of saving up to 70% of your total cost which makes it a great saving model if you have a good indication of your predicted resource and service needs. 
• Save when you reserve: If you know how many AWS services you will use in your future, what you can do is you can go ahead and reserve those services in advance, and in that case, AWS charges you even less compared to the other models. 

Get to Know AWS Billing and Cost Management Tools

When you log in to the AWS management console and go to My Billing Dashboard, it takes you to the “Billing & Cost Management Dashboard” which contains all the details related to AWS usage costs and billings every month. The dashboard will have three different sections that will summarize the cost: spend summary, month to date spend by service, month to date top services by spend.

Through this dashboard, you can also access several cost management tools to help you understand, track and manage the cost and usage in AWS.

Here are the most popular AWS cost management tools:

• AWS Cost Explorer: This tool provides a comprehensive visualization of all your AWS resources usage cost as a graph. The data tool has a beautiful interface which makes it very easy to monitor all your expenses on AWS in detail. 

Depending on the current usage trend, the cost explorer tool gives a very accurate forecast of future costs and usage. You can visualize and analyze the AWS cost data on the time interval you prefer, it can be monthly, or it can be even a daily level.

• AWS Budgets: This tool helps you keep track of all the AWS resource usage and their costs. AWS budgets allow you to set a custom budget with a threshold based on usage of the AWS resources and cost. Set up alerts automatically to notify you of the current usage and the cost or the forecast data exceeds the threshold of the custom budget set by you. In AWS budget, you can track your cost or usage with different filter options on availability zones, linked accounts, services, etc.
• AWS Cost and Usage Reports: This report collects the most comprehensive and exhaustive data available on AWS cost and usage. The tool helps in keeping track of reserved instances and savings plan usage. You can aggregate the data based on hour, day, or month. You can use the data of AWS costs and usage reports to publish in the AWS billing reports in an S3 bucket.

Best Practices for AWS Cost Management

• Track and switch off underutilized EC2 instances and downgrade them.
• Delete any zombie AWS resources which are not being used, so you aren’t paying for them every month.
• Use reserved instances and spot instances for few selective workloads wherever possible.
• Archive old data to cheaper storage tiers that are not frequently accessed.
• Schedule instances according to usage timing and shut down unused instances during outside business hours.
• Add groups of accounts with AWS organization and manage the billing as a whole.
• Provde separate accounts for different teams (dev, test, prod), this helps track and manage charges at scale.
• Implement cost management tools like AWS cost explorer, AWS budgets, AWS cost and usage reports to plan and manage the AWS resources well.

Optimize AWS Architecture for Performance and Costs

• Depending on the project requirement or the problem statement, choose the right pricing model which will benefit you the most.
• Rightsizing EC2 instances help in managing the instance size with their workloads, and you can end up saving cost by moving to lower-sized instances.
• After stopping an instance, remove the network and storage components attached to that instance. If you do not, you will incur charges in your bill for storage and network.
• AWS keeps on upgrading their products that will help you optimize the cost further, so always optimize the latest generation instances.
• Use AWS Pricing Calculator to estimate the cost for your architecture solution.

Conclusion

Optimizing your cost management in AWS is an ongoing process. However, by leveraging the above cost management tools and applying best practices for resource usage, you can save money across your architecture. Also, the cost optimization factors above can help you utilize AWS services in the best way possible.

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