To help our clients get their AWS accounts under control, we developed a Cost Optimization Process, which we’re now sharing with you.
I often hear clients ask questions like:
- Why are cloud services getting so expensive?
- Where can I look for savings?
- How can I get this cloud account cost under control?
If those questions are on your mind, you are not alone! Cost optimization of cloud services is not an easy task. Keeping these costs down requires daily operational management and collaboration among many people in the business.
In the past few months, I have worked with a few clients to evaluate their spending on AWS accounts and provide recommendations for cost optimization.
These organizations all had similar concerns about overspending on these services, wasting resources, and not getting the most for their money. They all faced increasing monthly bills and a lack of a long-term plan for their cloud budget.
To help our clients get their AWS accounts under control, I developed a Cost Optimization Process, which I’m now sharing with you.
Start by Understanding your Cloud Account and Cloud Data Center
For a successful cost optimization initiative, you must first seek to understand your AWS cloud account, pricing models, and service offerings.
In most cases, an AWS account starts small. Then, as more people learn about “the cool new AWS Cloud,” they begin to get onboard.
AWS services are easy enough to launch, and we can do whatever we want; the sky is the limit. But monthly bills can quickly get out of control.
At some point, company leadership will start asking to get these costs under control.
Then Control the Budget
When I hear clients say, “We are spending more in the cloud than spent on-premise, or more than what we expected,” I know something is not right.
Many organizations face high pressure to move their on-premises data center to the cloud to reduce costs and streamline operations. Benefits of moving to the cloud are widely known, so it’s hard to find a company that doesn’t have infrastructure in the cloud already. It’s also l hard to find a company that isn’t worried about the ever-expanding cloud spend.
Yet, in most cases, it is hard to find the person responsible for the cloud budget. They haven’t made it a priority or don’t see it as a need. But having a dedicated team to develop and manage cost optimization strategies is a critical part of controlling your spend.
When meeting with a company, I always start my assessment with a review of the AWS Billing dashboard, and I recommend you do too. The Billing dashboard is a place to quickly get a picture of your company’s spending behavior.
Once you have an understanding of your cloud account and cloud spend, here are the steps you can take to get it under control.
Cost Optimization Steps
#1 – Create a Cloud Cost Optimization Team
Build a Cloud Cost Optimization team, which will work to control the spending as part of their daily operations. The size of the team depends on the size of the cloud account and may require a few full-time jobs. A team lead needs to be established.
It is beneficial to have resources on the team with experience in IT architecture, engineering, financial and data analytics. This team will be responsible for carrying out the remaining steps listed below.
#2 – Develop Monthly Cost Optimizing Reports and Reviews
AWS Trusted Advisor and Cost Explorer are key services I strongly recommend. Not only do these services provide detailed reports, but having all these reports ready at the end of each month will help the team evaluate month-to-month improvements or lack of improvement.
AWS Trusted Advisor and Cost Explorer also provide some general recommendations on how to save on existing services.
#3 – Set a Cloud Budget
Use your AWS Budgets service to set custom budgets alerts when cost or usage exceeds the budgeted amount.
This will provide an actionable early warning when costs begin to exceed your budget, giving the team the opportunity to make necessary adjustments and announcements.
#4 – Choose the Right Pricing Model
Take time to understand EC2 Instance pricing models: On-demand, Pay-as-you-go, and Reserved Instances (RI).
All of these are often misunderstood or miscommunicated. It is very important to understand when Reserved Instances should be utilized.
Having Reserved Instances allows as much as a 70 percent savings over On-demand instances.
#5 – Automate, Automate, Automate
We all know the benefits of CI/CD automation, but when it comes to cost optimization, I am always looking for opportunities to stop and start resources when not used. For example, during weekends and off-hours. I
Implementing AWS CloudWatch, AWS Lambda and other Services can help the team schedule and automate resources.
#6 – Share Reports and Educate your Teams
By providing monthly cost and utilization reports, this team can introduce cost transparency, allowing others to understand more about the services they are consuming and the associated costs. For many, this is a different perspective, a perspective of cost.
Users of these services often serve as the best resource to help optimize usage and spending.
#7 – Follow AWS Best Practices
AWS shares best practices in various white papers on many topics including cost optimization.
Some companies openly share their experiences, what works and what doesn’t, and how they follow AWS best practices to make their initiative successful. Visit and review your AWS web resources regularly.
Results can be quite amazing when these cost optimization strategies are integrated into your cloud strategy.
All it takes is a dedicated team and a few steps to get you started down a path to controlling your spend.