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A Complete Guide on How to Reduce Aws Costs?

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At our company, AWS (Amazon Web Services) are being used extensively. The major reason behind that is AWS is a cloud provider that has the ability to host an amazing variety of apps at their infrastructure. With some smart tricks and strategies, we managed to save up to $500,000 in our Amazon Web Service bill every year. Here we will let you know about these strategies that are effective enough and can let you save a lot on your AWS bills with ease.

These strategies can work great for software companies, startups, as well as enterprises that are using AWS cloud services.

What you can learn in this article?

Here are the things that you will learn in this article:

  • Methods we applied to reduce costs on AWS services
  • How to access short-term advantages from Amazon Web Services easily?

The procedures we have here are not much complicated, but planning and putting some effort into them are necessary.

Well, basically our previous experience with AWS services that we used for our cloud infrastructure are the foundation of our strategies outlined in this article. So, you can apply these methods too to reduce your AWS expenditures with ease.

Elastic Compute Cloud (EC2)

We made direct savings using Elastic Cloud instances of EC2. The EC2 procedure is pretty straightforward.

Here are the steps you need to do for this procedure:

First step:

Evaluate the instance size and close the redundant ones. Ensure that you are using instances of the last generation. It is because these are the most cost-efficient ones and can deliver you more processing power.

Second Step:

The second step of saving substantial cost here is by preferring to use long-term reservation for the services you are using continuously. You can reserve instances for 12 to 36 months from AWS marketplaces or AWS directly.

The users who are utilizing Elastic Cache can grab the opportunity to reserve nodes.

Another Approach:

Here we have a complicated approach as well. Here, you need to employ measures of autoscaling for idle resources optimization. This way, you just need to pay for the instances you are using actually.

Furthermore, you can reduce the cost with Spot instances to scale the resource usage.

Reduction Steps of EC cost:

  • Reduce instances sizes
  • Avoid using auto scaling to minimize the number of idle resources.
  • Keep instances reserved on AWS
  • Prefer Standard instances to save more
  • Give spot instances a try.
  • Prefer new instances to upgrade to new generations.
  • Enable enhanced network to ensure max performance.
  • Select North Virginia to get a benefit from the price difference for different regions.

Elastic Block Store (EBS)

Ensure that you aren’t backing up your data here. Rather backup that at S3. Understand that when the exact EBS volume is linked to each instance, each volume must be of right size and correct type.

Keep in mind that the cost of SSD volumes is 2x the price of Magnetic volumes.

Steps for EBS cost reduction

  • Terminate your instances rather than stopping them.
  • Use magnetic storage rather than SSD.

Simple Storage Service (S3)

Selecting an appropriate storage class is important for every data type. Use cheaper S3 Glacier for instances than S3 Standard for data achieving. This only approach can let you save up to 400% on storage being used for archiving.

Understand and monitor your S3 requests. Install S3 endpoint on VPC to ensure an internal S3 route. The charges will be cheaper than using a public transfer considerably.

Steps for S3 cost reduction

  • Choose an appropriate class for S3 storage.
  • Place an S3 endpoint in VPC.
  • Always manage and monitor your S3 requests.
  • Prefer not to use EBS for your data backup.

Save on the cost of Data Transfer (ELB and S3)

When using a cache, you can ensure extensive savings on your data transfer costs. Therefore, always ensure that endpoints are connected with CDN service.

With AWS you can use three major ways to incur data transfer. These ways are Inter AZ, Inter Regions and Transfer Out. Some tweaks we have mentioned here can help you in saving cost on data transfer:

  • Moving Transfer Out to the Cloud Front.
  • Combine all non-critical applications under one Inter region.
  • While, combine entire critical applications under Inter AZ.

Use of GraphQL API instead of REST API can also help you in making savings by reducing per data transfer out requests significantly.

Steps for Data transfer cost reduction

  • Use GraphQL than REST API
  • Ensure your connection to a CDN service
  • Move to Cloud Front and save money potentially.
  • Use single availability zone to reduce inter-AZ costs

Get the same data usage level with CloudFront

CloudFront even gives you the same data usage level, but it is cheaper as compared to ELB. AWS can let you enjoy discounts on long-term contracts and large volumes. The CloudFront Transfer cost can be as low as $0.02 per GB based on your usage volume and negotiation power.

Take advantage by asking for credits

Startup credits can bring the majority of saving. Take advantage from multiple startup perks AWS offers, this can be up to $100,000 in the credits. Besides startups, enterprises and software businesses can also ask for credits to test services. The amount can be low substantially.

Monitor and Report

Some internal tools like Cloud Watch and Watch Explorer can be used for expenditure monitoring on AWS. However, integration of third-party services like Sumo Logic and Dynatrace are effective too, for monitoring AWS performance. These can let you save enough on AWS.

How monitoring can decrease AWS expenditure?

  • Create effective goals for cost reduction
  • Establish a consistent cost saving routine
  • Tag everything properly
  • Reduce instances sizes
  • Avoid using auto scaling to minimize the number of idle resources.
  • Keep instances reserved on AWS
  • Prefer Standard instances to save more
  • Give spot instances a try.
  • Prefer new instances to upgrade to new generations.
  • Enable enhanced network to ensure max performance.
  • Get benefit from price differences in multiple regions.
  • Prefer to terminate instances always
  • Use magnetic storage rather than SSD
  • Don’t forget to review volume sizes of EBS
  • Replace REST with GraphQL API
  • Connect with a CDN
  • Move to CloudFront to save more
  • Prefer using a single availability zone


What are steps to reduce EC2 costs?

How can you save costs with EBS?

How to reduce cost on data transfer?

We hope this above discussed guide will let you know everything related to AWS and its costs. If you still have any confusion, you can consider reading above article once more. Would you like to learn more? Please read the article How to Reduce AWS Costs.

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2020 Loretta Osakwe Awosika