AWS Cost Optimization Best Practices


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While AWS has a number of advantages over traditional on-premise infrastructure, its inherent elasticity and scalability can lead to uncontrollable expenses. AWS expenses can be complex to interpret and evaluate, and without a system in place to identify where they come from and how to control them, they can quickly eat into your profit margin. AWS as a cloud service provider provides a number of tools and best practices that enable users to take control of their costs and to continuously optimize their cloud budget.

In this post, we’ll look at some of the best AWS cost optimization tools available from AWS and how to apply best practices on the same.

How to Optimize AWS Cost: Best Practices

(i) EC2 Instance Rightsizing    

One of the most important needs when moving deployments to the cloud is to provide the hardware specifications. Such hardware specifications include CPU, storage, memory, availability zones, cost, and networking performance. To ensure that no unutilized resources are accessible, one should be able to match instance size to workload and performance needs. This would lower cloud costs. This is referred to as right-sizing. Another option to save cost by right-sizing is to identify unused EC2 instances and downsize the instance or relocate to a different instance family. It is vital to remember that right-sizing an EC2 instance is a continuous process. Businesses should review their performance and usage needs or patterns on a regular basis to find more cost-cutting options.

(ii) Instance Scheduling

AWS provides ample computing capabilities, allowing businesses to separate their test, development, and production server environments. Once the technology infrastructure has been set up, it is possible to save costs by turning off some instances while they are not in use. There’s no reason to keep the test and development environment up and running during non-working hours, wasting further billable capacity. These instances should be turned on and only used when absolutely necessary.

(iii) On-Demand vs Reserved vs Spot AWS EC2 Pricing

AWS offers three main pricing options such as on-demand, reserved, and spot instance pricing model. On-demand stands as the most expensive pricing option since the user pays no commitment fee upfront. Instead, the user just provisions and uses on the go. Users can make a one-year or three-year commitment with a reserved instance, which helps them to save money on the commitment. This choice provides a 40-60% discount. The spot instance is the final major choice. It is the cheapest pricing option, with reductions ranging from 50 to 60%. As a cost-cutting strategy, you should plan and strive for a reserved and spot pricing model. Make sure that you carefully select the spot and reserved instance to ensure the firm is getting the most out of the cloud deployment at the least possible price. 

(iv) Cheaper storage technologies

AWS offers three storage tiers including S3 standard, S3 intelligent tiering, S3 infrequent access, S3 infrequent Access for a single zone, S3 Glacier as well as S3 Deep Archive Glacier. It is important to determine which storage technology works for your data needs. Factors to consider include how often the data is accessed as well as data restoration efforts. Data that needs constant and frequent retrieval will cost more than infrequently accessed data. Adopting a lower storage tier such as 23 Glacier Deep Archive storage will mean it will take more hours to retrieve the data. Therefore it would cause more restoration efforts during a disaster. Below is a breakdown of the various storage categories and recommendations for use. 

  • S3 Standard – Best used for general-purpose storage of frequently accessed data
  • S3 Intelligent-Tiering – Best used for data with unknown or changing access patterns
  • Amazon S3 Glacier and Amazon S3 Glacier Deep Archive – for long-term archive and digital preservation
  • S3 Standard-Infrequent Access and S3 One Zone-Infrequent Access – for less frequently accessed data

Amazon Web Services (AWS) Simple Storage Service (S3) provides an easy option for storing documents, data and other information in the cloud. If you are interested in going deeper and learning more about S3 buckets, this article provides a step by step guide to secure and protect aws S3 buckets

(v) Patch Management

AWS introduces new features to its extensive range of products to keep up with the newest technological advancements. Upgraded versions tend to include improved performance and security. It is usually a best practice to upgrade to the most recent stable product versions. This is important because it provides greater performance at the lowest possible cost.


Finally, for many businesses, migrating to the cloud will result in significant cost reductions in terms of technology infrastructure. The cloud enables organizations of all sizes to efficiently compete on a global scale. This is thanks to reduced on-prem expenditure and a pay-per-use model. Despite the many advantages of cloud computing, organizations should examine their cloud settings on a regular basis. Doing this will help them to identify areas where they may save money while still achieving a good return on their investment. Cost optimization is a continual activity that should take place throughout a technology product’s life cycle. Click here to learn more about AWS Cost Optimization.

Faith Kilonzi is a full-stack software engineer, technical writer, and a DevOps enthusiast, with a passion for problem-solving through implementation of high-quality software products. She holds a bachelor’s degree in Computer Science from Ashesi University. She has experience working in academia, fin-tech, healthcare, research, technology, and consultancy industries in both Kenya, Ghana, and in the USA. Driven by intellectual curiosity, she combines her passion for teaching, technology, and research to create technical digital content.


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