The cost of doing business worldwide is increasing in the current economic landscape. Companies of all sizes face myriad obstacles, including budget constraints, limited resources, supply chain issues, and ever-changing customer expectations. The pressure to cut costs across all areas makes remaining competitive challenging for all sizes of organizations.
For most organizations, it is easy to start developing applications in the cloud. The issue arises when they must scale, and the cost jumps exponentially because the valid decisions six months ago no longer provide the cost advantage for many reasons, including increased users. Cloud usage can be optimized, and costs can be reduced but these activities require expertise and experience, which is sometimes hard for many organizations with tight budgets and resource constraints.
Not applying the correct approach to keep the cloud cost in check by the technology team of an organization can sometimes create doubts in the business leadership’s mind that cloud computing might not reduce costs while increasing efficiency and competitiveness for them.
According to the first large-scale study on the cloud, which Massachusetts Institute of Technology researcher Wang Jin carried out. This study found firms that migrated to the cloud experienced increased productivity and higher revenue. It also showed that public firms that adopted cloud technology had 2.3 to 6.9 percent higher revenue growth than firms that did not switch over the last ten years.
In this blog, I discuss the high-level cloud cost reduction approaches using AWS, but similar techniques can be applied in Azure and other clouds to reduce cost. To maximize the benefits of your AWS cloud infrastructure while minimizing costs, consider the following strategies:
Rightsizing Instances:
• Choose the Right Instance Type: Select an instance type that aligns with your workload requirements. Avoid overprovisioning or underutilization.
• Auto Scaling: Enable Auto Scaling to automatically adjust the number of instances based on demand. This ensures optimal resource utilization and cost efficiency.
Cost Optimization Best Practices:
• Expenditure Awareness: Understand your AWS usage and spending patterns. Leverage AWS tools to monitor costs and identify areas for improvement.
Cost-Effective Resources:
• Use AWS Free Tier services within specified limits.
• Take advantage of volume discounts as your usage grows.
• Commit to Savings Plans or Reserved Instances for predictable workloads and discounts.
• Explore Amazon EC2 Spot Instances for fault-tolerant workloads and discounts.
Resource Utilization Efficiency:
• Find the right size instances to find the optimal family and size.
• Delete unutilized resources to avoid waste.
• Choose appropriate data storage and transfer options based on access needs.
Elastic Resource Provisioning:
• Automatically scale resources based on demand.
• Build modular architectures using microservices technology.
AWS-Designed Silicon:
• Leverage AWS Graviton-powered instances for up to 40% better price performance than x86-based processors.
• Utilize purpose-built ML chips like AWS Inferentia and AWS Trainium for deep learning applications.
Remember that continuous monitoring, optimization, and well-architected practices are essential for long-term success in managing your AWS costs.
The approaches mentioned above can be done by the internal teams or augmented with a partner team to fast-track the cost reduction in the cloud bill. Remember that the savings in the cloud bill, in the long run, can offset the cost of this exercise.
