AWS

Top 5 Recommendations for Quick Wins in AWS Cost Reductions

Top 5 Recommendations for Quick Wins in AWS Cost Reductions

  • Identify and delete unused resources like idle EC2 instances.
  • Right-size overprovisioned instances using AWS Compute Optimizer.
  • Use Spot Instances for non-critical or fault-tolerant workloads.
  • Automate storage optimization with S3 Lifecycle Policies.
  • Monitor costs with AWS Budgets and Cost Explorer for real-time insights.

Top 5 Recommendations for Quick Wins in AWS Cost Reductions

Top 5 Recommendations for Quick Wins in AWS Cost Reductions

AWS provides incredible scalability and flexibility, but expenses can quickly spiral out of control without proper cost management.

Here are five actionable recommendations to achieve quick wins in AWS cost reductions without sacrificing performance or scalability. These strategies offer immediate savings and establish a strong foundation for long-term cost optimization.

1. Identify and Eliminate Unused Resources

Unused resources often account for unnecessary costs in AWS environments. Regular audits can uncover idle or forgotten instances, storage, and services, which can then be decommissioned or repurposed.

  • Unused EC2 Instances: Check for instances running without CPU and network activity. Terminate them or shut them down to avoid ongoing charges.
  • Detached EBS Volumes: Unattached Elastic Block Store (EBS) volumes continue to accrue storage costs even when unused. Identify and delete these volumes or back up critical data before removal.
  • Idle Load Balancers: Ensure all Elastic Load Balancers are actively serving traffic. To reduce unnecessary expenses, unused load balancers should be removed.
  • Example: A startup identified five idle EC2 instances and 20 unattached EBS volumes during an infrastructure review, saving $1,000 monthly by decommissioning these resources. Regular cleanup sessions ensure their environment remains optimized.

2. Right-Size Your Resources

Many organizations overprovision resources, leading to excessive expenses. Right-sizing ensures that resources match workload demands while maintaining performance requirements.

  • Use AWS Compute Optimizer: Analyze resource utilization metrics to receive tailored recommendations for resizing instances. AWS Compute Optimizer provides actionable insights into underutilized resources.
  • Downsize EC2 Instances: Replace oversized instances with smaller ones based on CPU, memory, and storage requirements. For workloads with variable demands, consider burstable instance types like t3 or t4g.
  • Example: An application running on m5.large instances with 20% CPU utilization was resized to t3.medium, reducing costs by 50%. Additional optimizations for other workloads saved another $500 per month.

3. Use Spot Instances for Non-Critical Workloads

Spot Instances allow you to utilize unused AWS capacity at up to 90% lower costs than On-Demand instances. These are ideal for workloads that can handle interruptions or tolerate delays.

  • Suitable Use Cases: Batch processing, CI/CD pipelines, big data analysis, and test environments.
  • Spot Fleet and Auto Scaling: Use Spot Fleets combined with Auto Scaling groups to maintain workload reliability while leveraging low-cost Spot Instances.
  • Example: A video rendering company reduced compute costs by 70% by shifting non-critical rendering tasks to Spot Instances. They combined Spot and On-Demand instances to ensure availability during peak hours.

Read our article’s top 10 tips on how to use Spot instances to reduce AWS costs.

4. Optimize Data Storage

Data storage costs can accumulate rapidly, particularly when frequently accessed or archival data is stored in high-cost tiers. Optimizing storage through automation and proper management can lead to significant savings.

  • Use S3 Lifecycle Policies: Automate data transition to lower-cost storage classes, such as S3 Standard-IA, S3 Glacier, or S3 Glacier Deep Archive, based on data age or access frequency.
  • Archive Logs: Move logs and backups older than 90 days to S3 Glacier Deep Archive to save on long-term storage costs.
  • Clean Up Snapshots: Identify and delete old, redundant snapshots or archive them in cost-effective tiers. Consider automating snapshot lifecycle management.
  • Example: A SaaS company saved $5,000 annually by implementing lifecycle policies for inactive S3 objects and archiving 90% of historical logs to S3 Glacier Deep Archive. This approach freed up high-cost storage for more critical data.

5. Monitor and Control Costs with AWS Budgets and Cost Explorer

Proactive monitoring and real-time visibility into AWS spending are key to staying within budget and uncovering potential savings opportunities.

  • Set Up AWS Budgets: Create cost and usage budgets to track spending and receive alerts when thresholds are breached. Use AWS Budgets to establish financial discipline across teams.
  • Analyze with Cost Explorer: Break down costs by service, region, or cost allocation tags to understand spending patterns and identify anomalies. Regular analysis ensures that expenses are aligned with business priorities.
  • Use Cost Allocation Tags: Categorize expenses by team, project, or environment for better accountability and reporting. Implement mandatory tagging policies to ensure all resources are tagged appropriately.
  • Example: A marketing team used AWS Budgets to cap campaign analysis workloads at $2,000 monthly, avoiding unexpected overages and ensuring spending aligned with ROI goals.

Read how to use Reserved instances on AWS and save costs.

Conclusion

These quick-win strategies can lead to immediate and measurable AWS cost reductions. By eliminating unused resources, right-sizing instances, leveraging Spot Instances, optimizing storage, and implementing monitoring tools, businesses can control expenses while maintaining operational efficiency.

These actions deliver immediate savings and create a framework for sustainable cost management in the cloud. Regular audits, ongoing optimization, and proactive monitoring are essential for achieving long-term financial success in your AWS environment.

FAQ: Top 5 Recommendations for Quick Wins in AWS Cost Reductions

What is the first step to reducing AWS costs?
Start by identifying and eliminating unused resources, such as idle EC2 instances, unattached EBS volumes, and unused load balancers.

How can I right-size resources to save costs?
Use AWS Compute Optimizer to analyze usage patterns and resize overprovisioned instances to smaller, more cost-effective types.

What are Spot Instances, and how do they save costs?
Spot Instances allow you to use unused AWS capacity at up to 90% lower costs. They are ideal for workloads that can handle interruptions.

How does storage optimization help with cost reductions?
Automating data transitions to lower-cost storage tiers with S3 Lifecycle Policies ensures inactive or archival data incurs minimal storage costs.

What tools help monitor AWS spending?
AWS Budgets tracks spending against thresholds, and Cost Explorer provides insights into cost trends and drivers for better financial control.

Can tagging resources reduce costs?
Yes, tagging resources helps categorize and track spending by project or team, enabling better accountability and cost analysis.

How often should I review AWS resources for optimization?
Perform audits at least monthly to identify unused resources, adjust configurations, and update cost-saving policies as needed.

What types of workloads are ideal for Spot Instances?
Spot instances are best suited for fault-tolerant workloads such as batch processing, testing, big data analysis, and CI/CD pipelines.

What’s the role of lifecycle policies in storage cost management?
Lifecycle policies automate moving infrequently accessed data to cheaper storage classes, reducing costs without manual intervention.

How do AWS Budgets prevent overspending?
By setting thresholds, AWS Budgets sends alerts when spending approaches or exceeds limits, enabling proactive cost management.

What are common unused resources that drive up costs?
Idle EC2 instances, unattached EBS volumes, unused Elastic IP addresses, and inactive load balancers are common culprits.

How can I track specific project costs in AWS?
Apply cost allocation tags to resources and use AWS Cost Explorer to break down expenses by project, team, or environment.

Are there savings plans for dynamic workloads?
AWS Savings Plans offer discounts for flexible workloads, complementing Reserved Instances for predictable usage.

Can automating resource shutdowns save money?
Yes, scheduling non-critical resources to shut down during off-peak hours reduces costs without affecting operations.

Why is proactive monitoring essential for cost reductions?
AWS Budgets and Cost Explorer provide real-time insights, helping to detect anomalies and adjust resource usage promptly, avoiding unnecessary expenses.

Author
  • Fredrik Filipsson has 20 years of experience in Oracle license management, including nine years working at Oracle and 11 years as a consultant, assisting major global clients with complex Oracle licensing issues. Before his work in Oracle licensing, he gained valuable expertise in IBM, SAP, and Salesforce licensing through his time at IBM. In addition, Fredrik has played a leading role in AI initiatives and is a successful entrepreneur, co-founding Redress Compliance and several other companies.

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