AWS Cost Optimization

Workshop
INTRODUCTION to cost optimization

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Date

© 2023, Amazon©Web
2023,
Services,
Amazon Inc.
Webor its
Services,
affiliates.
Inc. or its affiliates.
Agenda
• Challenges and AWS Approach
• Cost Optimization Principles
• Customer Journey

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Challenges with cost
optimization
and how AWS approaches
them

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Customer Challenges

• “Why is my AWS bill so high? I thought I should be spending less in the cloud.”

• “How can I reduce AWS costs for Dev/QA environments?”

• “What options do I have to bring down my AWS cost?”

• “Who (or… how AWS) can help me with cost optimization?”

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AWS approach

• We at AWS work relentlessly to reduce our own

costs and are passing the resulting savings to
customers through price reductions

• Multiple available free tools: Trusted Advisor,

Cost Explorer, Compute Optimizer, Spot
Advisor, Well-Architected Cost Labs, etc.

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Continuous cost optimization – shift in
mentality
Bill  Cost optimization is not
Increase
the same as bill
reduction

Same Cost
Usage Optimizatio  Engineering initiatives
Patterns n Initiatives
also have a cost

Bill  Break the cycle:

Reduction
continuous cost
optimization mindset
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 Cost The ability to give visibility of costs to
Manageme keep them under control and to enable
nt cost optimization

Cost The ability to run systems to deliver

Optimizatio business value at the lowest possible
n price point.

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What does good look like?
Going from paying for what you use… …to paying for what you need

Usage Costs Usage Costs

Time Time

re:Invent
2022 - Cloud cost optimization: Only paying for what you need
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Pillars of cost optimization

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The Five Pillars of Cost Optimization

Rightsize your Increase Pick the right Optimize

resources elasticity pricing model storage

Measure,
monitor and
improve
© 2023, Amazon Web Services, Inc. or its affiliates. Laying the Foundation: Setting Up Your Environment for Cost Opt
imization
 Pillar 1:
Rightsizing
Cheapest resource type + best
performance
Monitoring usage

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Rightsizing example

m5.4xlarge
$0.768 per hr m5.large
$0.096 per hr

1. Migrate/provision & 2. Check (CPU, RAM, 3. Rightsize

Run network, disc)

87.5%
Saving

4. Review Performance 5. Save!

© 2023, Amazon Web Services, Inc. or its affiliates. Right Sizing: Provisioning Instances to Match Work
oads
 Pillar 2:
Increase elasticity
Autoscaling

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Traditional approaches to capacity management

Build to peak load Build to average load

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Lower over-provisioning via elasticity

Auto Scaling allows you to:

• React dynamically to changes in
load
• Schedule regular workloads
• Optimise your instance usage
• Reduce over-provisioning
• Complimentary service!

AWS Well-Architected Framework Concepts: Elasticity

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 Pillar 3:
Leveraging the right
pricing model
Reserved Instances / Savings
Plans
EC2 Spot
On-Demand

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What are Reserved Instances (RI) and Savings Plans
(SP)?

• Billing Subscription (“discount

coupon” applied hourly)
Discount • 1yr or 3yr term commitment to pay
coupon for all hours for a reduced price

• Doesn’t reserve actual capacity

Up to 75%
Selecting the Best Pricing Model

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Savings
EC2 Spot provides incredible savings for the right
workloads
Spot can be used for
 Stateless
 Fault-tolerant
 Big data
 Containers
Up to  CI/CD

90%  Web servers

 High Performance Compute
savings  Dev/Test
 See when to use Spot instances

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 Pillar 4:
Leveraging the right
storage class
Elastic Block Storage (EBS)
Simple Storage Service (S3)

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Amazon Storage Classes/Platforms

• Server/Instance • Distributed • Object Storage

Storage Filesystem • Backup Target
• Local Filesystems – Snapshots,…
• Network Volumes
(EBS)

Amazon Elastic Block EC2 Instance Store Amazon Elastic File Amazon Simple Amazon S3 Glacier
Store System Storage Service
Block File Object
Data Transfer

AWS Direct Connect AWS Storage Gateway AWS Snowball

SEE: How do you select your storage solu

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 Pillar 5:
Mechanisms for cost
optimization

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Summary of Mechanisms for Optimisation

Define, agree, and Define metrics, set

enforce cost allocation targets, and review
tagging

Enable teams to Assign optimization

architect for responsibility
cost
Cloud Enablement Engine: A Practical G
uide
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Customer journey
with cost optimization

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 Customer journey
Costs will typically increase over time
At each stage different cost optimization strategies are appropriate

Customer Lifecycle Stages Cost

• Investigation and Design
• Implementation and Testing
• Production and Growth
• Operational

Time

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Customer journey – Investigation and design
Architecture will have a big impact on eventual cost to operate

• Provide case studies

• Consider alternative support Cost
• Consider cost along with
functionality

• Best practices
• Review Account Structure
• Implement Tagging Time

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 Customer journey – Implementation and
testing
Costs tend to increase significantly during this stage.

• Monitor costs Cost

• Review budgets
• Review architectural decisions
• Leverage elasticity
• Review storage choices
• Add additional tagging

Time

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 Customer journey – Production and growth
Ongoing costs become clear during this stage
Increasing adoption drives further cost increases

• Review cost optimization Cost

recommendations
• Review account usage
• Monitor resource utilization
• Consider automation
• Review chargeback/reporting

Time

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Customer journey – Operational
At this stage we can apply all of our cost optimization pillars:
• Provide regular reports and recommendations
• Optimize account usage
• Remove/Right-size resources Cost
• Increase elasticity
• Review storage types
• Review backup/archive strategy
• Purchase RIs

Time

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 Customer journey – Pillars of optimization

Match Storage
Operational
to Need

Growth Use Reserved

Instances

Cost Design for

Cost

Right Size &

Decommission

Increase
Implementation unused
Resources
Elasticity

Design

Time
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How to get started?

How many What benefits How many of How many

instances could I get my instances instances
could I from need to be are
right-size? Reserved running configured
Instances and 24x7? for auto-
Savings scaling?
Plans?
Check out: Cost Optimization Pillar - AWS Well-Architected Framework

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Quiz

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Customer journey – Quiz

Right Size & Increase Elasticity Reserved Instances or Match Storage Design for
Decommission unused Savings Plans to Need Cost
Resources

A customer has been using AWS to host a web application for

several years. Which cost optimisation pillars are likely to yield
savings quickly?

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Customer journey – Quiz answer

Right Size & Increase Elasticity Reserved Instances Match Storage Design for
Decommission or Savings Plans to Need Cost
unused Resources

A customer has been using AWS to host a web application for

several years. Which cost optimisation pillars are likely to yield
savings quickly?

A: Right-Sizing/Decommissioning and using Reserved

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Customer journey – Quiz

Right Size & Increase Elasticity Use Reserved Match Storage Design for
Decommission unused Instances to Need Cost
Resources

A customer is planning to migrate a workload from a legacy on-

prem implementation to AWS. They are just starting their cloud
journey and are worried about cost. What pillars can we use to
advise them?
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Customer journey – Quiz answer

Right Size & Increase Use Reserved Match Storage Design for
Decommission Elasticity Instances to Need Cost
unused Resources

A customer is planning to migrate a workload from a legacy on-prem

implementation to AWS. They are just starting their cloud journey and
are worried about cost. What pillars can we use to advise them?

A: All of them! Planning ahead is critical to ensure future

efficiency.
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 Thank you!
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© 2023, Amazon©Web
2023,
Services,
Amazon Inc.
Webor its
Services,
affiliates.
Inc. or its affiliates.