Cost Optimization

Maximizing Revenue
Through Clever Cost-Cutting Tactics

Laptop showing cost optimization

What is Cost Optimization?

Cost optimization is an important part of any business's operations, becoming increasingly important in the cloud era. As organizations focus on using cloud services like AWS to reduce costs, understanding the tools available to optimize cost becomes ever more critical. With the right cost optimization strategies and tools, businesses can better use their resources and save millions in operational costs. In this article, we'll explore different cost optimization strategies and AWS-specific tools businesses can employ to reduce costs.

30 % of the 1056 Financial Operations Practitioners surveyed in 2022 found that the biggest problem they experienced was getting engineers to act on cost optimization initiatives throughout the organization. (Source

How to Achieve Cost Savings Initiatives

Cost Savings initiatives do not need to be hard. Its all about discipline and in most cases can be achieved by creating a low-cost support structure around the Engineers. By nature, Cloud Engineers are very technical and often do not have the time, temperament, and stick-to-itiveness to research savings opportunities, organize meetings with application owners, convince them to terminate or resize resources, schedule the changes, report the savings achieved and ensuring the save is reflected within the accounting department.

Cost Optimization Program

It is important to think of cost optimization as an ongoing program and not a one-time project. In fast-growing and complex cloud implementations, it is not uncommon to continually reduce the bill by 10-20% year over year with a disciplined program in place.
Even with the many cost optimization tools and platforms on the market today (And we encourage you to explore them) it is important to maintain the discipline and follow through to continue to be successful.

Make it someone's job or responsibility to focus on this. It does not need to be led by Cloud Engineers; much can be achieved in as little as 20 hours per week of dedicated administration support.

The following are some tips you can employ to begin a cost optimization program utilizing native cloud provider tools (Although we discuss AWS in detail, other providers i.e., Azure provides the same insight with their tools)

Native Cloud Provider Tools

This document outlines procedures and methods that can support achieving insights into cost savings optimizations and is focused on the use of AWS Trusted Advisor.
The methods discussed achieve actionable insights which require further research using your companies configuration management database CMDB or other related documentation to match resource id's and accounts to respective application support owners for technical discussions to determine and agree on either a termination of unneeded resources and/or right-sizing the service to a more cost-effective alternative (IE 2xlarge to a1.medium server).

Get started with AWS Trusted Advisor

You can access Trusted Advisor from the AWS Management Console. Use the Trusted Advisor console to review and check results for your AWS account and then follow the recommended steps to fix any issues. For example, Trusted Advisor might recommend that you delete unused resources to reduce your monthly bill, such as an Amazon Elastic Compute Cloud (Amazon EC2) instance, or show you all databases that haven't been accessed in 14 days, possibly indicating that the resource is no longer needed. To create an .xls file that includes all check results, choose Download all checks.

Under Potential Monthly Savings, you can view how much you can save for your account and the cost optimization checks for recommendations.

Example : Trusted Advisor Dashboard

AWS Trusted Advisot dashboard screenshot

Trusted Advisor Dashboard page 2

The downloaded file will include details such as account, resource name, estimated monthly savings, and utilization over a 14-day period.

Sample procedure you can leverage:

  1. Download/Export from AWS Trusted advisor Low Utilization EC2 Instances and RDS Idle DB Instances for all Accounts under consideration.
  2. EC2 Report will show 14-day average CPU usage indicating candidates for either Termination or potential candidates for the Resizing the resource
  3. RDS Idle DB Instances report will show the number of days since the last connection, which will indicate either a DB is no longer required or potentially a redundant resource used for disaster recovery etc, requiring further discovery.
  4. After an initial analysis of these reports, which only indicate the account number and resource ID the next step will be to correlate this information to your companies CMDB and/or System Administrator tools (IE Zabbix/SCOM) to obtain OS Host name, Resource Owner, and Contact information, etc.
  5. Organize meetings with the Resource owner for discussion involving the final disposition of the resource (IE, Terminate, Resize or No action)
  6. For resources with agreement to terminate, Create a change control ticket for authorization.
  7. Perform an AMI backup and stop the resources.
  8. Wait one week
  9. Delete the Instance
  10. Record the cost savings information
  11. For Resources with agreement to resize, Create a change control ticket for authorization
  12. Perform an AMI backup of resource
  13. Schedule downtime, resize and coordinate post change checkout with application owner
  14. Record the cost savings information
  15. Repeat
Process diagram for cost optimization

Cost Take-Out Opportunities

EC2 and RDS terminations and resizing are some common examples of resources that get provisioned and often forgotten about relative to cost-effective utilization and actual daily usage, as in the case of expense database resources running without any access or use by the firm.

Another common and often overlooked resource is unused AWS EBS volumes. These volumes still accrue costs even when their associated EC2 instances are no longer running. The AWS console can expose these unused or orphaned volumes so you can arrange the deletion of the resource. Simple CLI scripts can be created that will expose these resources, run a snapshot and automatically delete the unused resource. This is an example of how automation can continually discover and execute on cost take-out opportunities.

Amazon Simple Storage Service

Amazon Simple Storage Service is another area where costs can significantly increase if not monitored closely. Many organizations use AWS S3 to house ALL server backups regardless of if they run in the cloud or within your own on-premise data center. This practice can result in very large s3 stores. Looking carefully at your organization's retention policies and reducing them to something more reasonable can achieve significant savings. Server backups with unlimited or excessively long retention schedules are very costly and often overlooked.

Amazon S3 storage Lens

Using  Amazon S3 storage Lens can help you gain actionable insights on how data is stored  and accessed. Storage lens provides 29+ usage and activity metrics that can assist in gaining deeper insights.

As an example, metrics can be downloaded and stored and accessed in a database or even excel to uncover questions like – how many times in the last 90 days has an object been written (put) or retrieved (get). If there were 0 hits on this analysis, it is a safe bet that no current application is in need of this data and worthy of some further research with the data owners for potential significant cost take out opportunities.

Cloud Cost Optimization as a Service

Remember, Cost Savings initiatives do not need to be difficult. Success is about establishing discipline over what is a dynamic process with continuously changing pricing and service options. With our Cloud Cost Optimization as a Service, we can embed a proven service within your organization. Your Cloud Engineers focus on technical innovation; we can keep cost optimization in focus.

Contact us for a free 14-day assessment and start saving money today.