Best Practices and Resources to Effectively Manage and Optimize Your AWS Costs
- 1. © 2022, Amazon Web Services, Inc. or its affiliates. © 2022, Amazon Web Services, Inc. or its affiliates. Best Practices and Resources to Effectively Manage and Optimize Your AWS Costs Luis Garcia, AWS Solutions Architect Josue Martinez, AWS Solutions Architect 7/12/2022
- 2. © 2022, Amazon Web Services, Inc. or its affiliates. Agenda • Challenges and AWS Approach • Cost Optimization Pillars • Cost Financial Management Pillars • Tools and Services - Demo
- 3. © 2022, Amazon Web Services, Inc. or its affiliates. Glossary of Acronyms • EC2 – Elastic Cloud Compute – (Virtual Machine) • RI – Reserved Instance • SP – Savings Plan • EBS – Elastic Block Storage – (Virtual Hard Drive, Volume) • AZ – Availability Zone • OS – Operating System • IOPs – Input/Output Operations per second • CFM – Cloud Financial Management • LOB – Line of Business • CUDOS – An AWS Cloud Intelligence Dashboard
- 4. © 2022, Amazon Web Services, Inc. or its affiliates. © 2022, Amazon Web Services, Inc. or its affiliates. Challenges and How AWS Approaches Them
- 5. © 2022, Amazon Web Services, Inc. or its affiliates. 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?” “Can TAMs help in cost optimization activity?”
- 6. © 2022, Amazon Web Services, Inc. or its affiliates. AWS Approach • AWS works relentlessly to reduce our own costs and has passed the resulting savings to you 115 times through price reductions • Provided Tools: Trusted Advisor, Cost Explorer, Compute Optimizer, Well-Architected Cost Labs, etc.
- 7. © 2022, Amazon Web Services, Inc. or its affiliates.
- 8. © 2022, Amazon Web Services, Inc. or its affiliates. © 2022, Amazon Web Services, Inc. or its affiliates. Pillars of Cost Optimization
- 9. © 2022, Amazon Web Services, Inc. or its affiliates. The Five Pillars of Cost Optimization Rightsize your resources Pick the right pricing model Increase elasticity Measure, monitor and improve Optimize storage
- 10. © 2022, Amazon Web Services, Inc. or its affiliates. Rightsizing example m5.large $0.096 per hr 3. Rightsize 87.5% Saving 5. Save! 4. Review Performance 2. Check (CPU, RAM, network, disc) 1. Migrate/provision & Run m5.4xlarge $0.768 per hr
- 11. © 2022, Amazon Web Services, Inc. or its affiliates. The Five Pillars of Cost Optimization Rightsize your resources Pick the right pricing model Increase elasticity Measure, monitor and improve Optimize storage
- 12. © 2022, Amazon Web Services, Inc. or its affiliates. Approaches to Capacity Management Build to peak load Build to average load Build with Elasticity
- 13. © 2022, Amazon Web Services, Inc. or its affiliates. The Five Pillars of Cost Optimization Rightsize your resources Pick the right pricing model Increase elasticity Measure, monitor and improve Optimize storage
- 14. © 2022, Amazon Web Services, Inc. or its affiliates. • NON-EC2 reservations: - Billing discount only (no capacity reservation) - Most* RDS platforms are size-flexible - Apply to accounts within AWS Organizations in a same way Services that benefit from different discount types - Flexible pricing model - Commit to an hourly spend rate - Recommended for EC2 if first time buyer, or upon expiration of previous RIs *MySQL, MariaDB, PostgreSQL, Amazon Aurora and Oracle BYOL Reserved Instances Savings Plans Amazon EC2 Amazon RDS Amazon EC2 Amazon Redshift Amazon Opensearch Amazon ElastiCache Amazon DynamoDB AWS Elemental MediaConvert AWS Fargate AWS Lambda Amazon SageMaker
- 15. © 2022, Amazon Web Services, Inc. or its affiliates. Attributes Standard Convertible Term Commitment 1yr and 3yr 1yr and 3yr Payment options: No Upfront, Partial Upfront, All Upfront All three All three Can be size-flexible: Yes Yes Modify: AZ or Scope (Zonal vs Regional) Yes Yes Modify: Instance size within family Linux/UNIX All Exchange: Instance families, OS, tenancy, and payment option No Yes (to equal or higher cost) Modify/split/merge reservations: Partially Yes Purchase/sell on AWS RI Marketplace*: Yes No * To sell on AWS Marketplace, US bank account is needed EC2 RI Types – Comparison
- 16. © 2022, Amazon Web Services, Inc. or its affiliates. Greatest flexibility & up to 66% discount Types of Savings Plans Compute Savings Plans EC2 Instance Savings Plans SageMaker Savings Plans Up to 72% off the instance family within AWS region Up to 64% cost savings compared to on-demand FLEXIBLE ACROSS FLEXIBLE ACROSS FLEXIBLE ACROSS ✓ Instance families ✓ Regions ✓ OS ✓ Tenancy ✓ EC2, Fargate, Lambda ✓ Size ✓ OS ✓ Tenancy ✓ Regions ✓ Instance families ✓ Component
- 17. © 2022, Amazon Web Services, Inc. or its affiliates. The Five Pillars of Cost Optimization Rightsize your resources Pick the right pricing model Increase elasticity Measure, monitor and improve Optimize storage
- 18. © 2022, Amazon Web Services, Inc. or its affiliates. Amazon Storage Classes/Platforms • Object Storage • Backup Target – Snapshots,… Object Amazon Simple Storage Service Amazon S3 Glacier • Distributed Filesystem Amazon Elastic File System File • Server/Instance Storage • Local Filesystems • Network Volumes (EBS) Amazon Elastic Block Store EC2 Instance Store Block How do you select your storage solution?
- 19. © 2022, Amazon Web Services, Inc. or its affiliates. Amazon Storage Classes/Platforms … Examples Example A Volume Requirement – 300GB with 3000 IOPS Option Breakdown: • gp2 – 3TB Size, 3000 IOPS - $102.40 • gp3 – 300 GB Size, 3000 IOPS - $20.00 • io1 – 300 GB, 3000 IOPS - $226.25 80% savings between gp2 – gp3 91% savings between io1 – gp3 Example B Image Storage Requirement – 300GB Option Breakdown: • EFS Standard – 300 GB, $90.00 • S3 Standard – 300 GB, $9.65 89% savings All numbers were calculated using the AWS Pricing Calculator
- 20. © 2022, Amazon Web Services, Inc. or its affiliates. The Five Pillars of Cost Optimization Rightsize your resources Pick the right pricing model Increase elasticity Measure, monitor and improve Optimize storage
- 21. © 2022, Amazon Web Services, Inc. or its affiliates. © 2022, Amazon Web Services, Inc. or its affiliates. Pillars of Cloud Financial Management
- 22. © 2022, Amazon Web Services, Inc. or its affiliates. Cost management is more than just cost optimization … and it requires evolving capabilities to embrace the cloud Predicting the cost associated with variable usage Awareness of resource costs Cost governance in a continuous manner
- 23. © 2022, Amazon Web Services, Inc. or its affiliates. Cloud Financial Management - CFM Manage, optimize, and plan AWS cost and usage Plan Save Run See Planning and forecasting Cost optimization Cloud financial operations Measurement and accountability
- 24. © 2022, Amazon Web Services, Inc. or its affiliates. Cloud technology consumption Model Engineers and Finance acting as one Spend is dynamic and less predictable Procurement is instant Low cost of failure Deploy Operate Optimize Technology teams Finance organization
- 25. © 2022, Amazon Web Services, Inc. or its affiliates. Start your Cloud Financial Management journey 2. Partnership Create a Finance/Technology partnership and establish a regular communication cadence to create and maintain alignment Education Identify cloud-focused training offerings from AWS Training and Certification to eliminate knowledge blind spots for all stakeholders 1. Ownership Identify a named owner (individual or team) responsible for driving cloud financial management activities 3. Cost allocation enablement Implement an account structure (using AWS Organizations), and tagging strategy to enable allocation of cost to lines of business 4. Cost visibility Establish efficiency KPIs and report cloud costs (using AWS Cost Explorer) to Technology teams in order to raise cost awareness 6. Cost forecasting Improve cost predictability (AWS Budgets) 5. Cost optimization Leverage tools (AWS Cost Explorer) to identify and execute cost optimization opportunities AWS Cost Explorer AWS Cost Allocations Tags AWS Organizations AWS Cost Explorer (EC2 Rightsizing Recommendations) AWS Budgets
- 26. © 2022, Amazon Web Services, Inc. or its affiliates. Tags provide a more granular view of your organization's consumption pattern Cost allocation tags Environment Project Team Application ID Cost Center AWS Organizations – allocate cost by account Start with the AWS Account, then use Tags AWS Cloud AWS Organizations Master Workloads OU Retail-Prod OUs SCP Retail-Dev Retail-Staging Eng-Prod Eng-Dev Eng-Staging
- 27. © 2022, Amazon Web Services, Inc. or its affiliates. © 2022, Amazon Web Services, Inc. or its affiliates. Demo Time AWS Tools and Services
- 28. © 2022, Amazon Web Services, Inc. or its affiliates. © 2022, Amazon Web Services, Inc. or its affiliates. Thank You
- 29. © 2022, Amazon Web Services, Inc. or its affiliates. © 2022, Amazon Web Services, Inc. or its affiliates. Laying the Foundation: Setting Up Your Environment for Cost Optimization Right Sizing: Provisioning Instances to Match Workloads CUDOS - Demo AWS Well Architected Labs – Cost Optimization AWS Cost Management User Guide AWS Pricing Calculator Trusted Advisor AWS Well Architected Framework Tagging Best Practices