How to Lower Your Amazon AWS Bill

Cloud users generally start researching how to lower your Amazon AWS bill just before the third stage of a process known as “cloud awareness” – the first two stages being cloud adoption and cloud deployment. The third stage – cloud cost optimization – is when you realize in your eagerness to adopt the cloud, you have deployed more instances on Amazon´s Elastic Compute Cloud (EC2) or other AWS services than is good for the health of your budget, and left them running when they are not actually being used.

Without taking control of your AWS bill, it is impossible to plan ahead for future projects and capacity requirements. With a little creative thinking it is possible to come up with several ways to lower your Amazon AWS bill, but many of these have pitfalls or can cost you more than you would actually save.

Why Do You Need A Plan to Lower your AWS Cloud Bill?

Many companies using AWS should have a plan in place to lower their AWS cloud costs – even if they are not over budget. Naturally, companies may not want to limit the resources developers have available to them but want to make sure that the projects they are working on remain within budget and are financially feasible.

AWS charges for EC2 and RDS by the second – so every second your resources are running and you’re not using them, you’re wasting money. Idle resources — resources paid for by time running that are not actively being used – are one of the two main sources of cloud waste. Typically, this kind of waste occurs in non-production environments – that is, those used for development, testing, staging, and QA. About 44% of compute spend is on non-production resources. The second main source of wasted spend is oversized infrastructure — that is, resources running at a larger capacity than needed, which cost more than smaller resources.

Lowering AWS billing may seem like a daunting task, but in fact, it’s easier than some might think to quickly and significantly reduce your AWS services cost, and depends on the approach. For example, for non-production AWS EC2 instances that are only needed during working hours, you instruct development teams to switch the instances off when they are not using them. Or, you can have your developers take the time to develop scheduling scripts for this same purpose. But, is this a distraction instead of a benefit? In fact, yes, these manual processes take away from your development team’s focus on creating value for your business.   

Options to Lower Your Amazon AWS Bill

One of the first places you will likely look at is AWS pricing options. It may be possible you can change regions or instance types to benefit from lower AWS cloud costs, or pay upfront for Reserved Instances to take advantage of a discount, but they have limitations.

AWS Reserved Instances 

AWS Reserved Instances will only make a useful addition to your toolbox in a limited set of circumstances: namely, for long-term, predictable production workloads. AWS Reserved Instances billing is based on a contract. You commit now to pay for capacity for a set period of time. They are a “use it or lose it” system, and it’s far too easy to commit to more capacity than you need – or to think you’re using your RI, only to find out that something about the instance, whether region, instance type, or availability zone, didn’t match the criteria you paid for. 

These measures, however, are only temporary fixes and do not help you take control of your AWS expenditure. Furthermore, if Amazon continues to reduce its AWS EC2 prices over the next couple of years, the savings you make by paying upfront may be minimal.

AWS Spot Instances

AWS spot instances are not a specific type of instance – rather, this is the name of a purchasing option that allows users to take advantage of spare capacity at a low price, with the possibility that it could be reclaimed for other workloads with just a two minute notice. If the price goes above your maximum set price, your workload will also be interrupted.

Some common use cases for spot instances include:

  • Batch processing
  • Web services
  • CI/CD development
  • Hadoop data processing
  • Image rendering
  • Big data analytics 
  • Machine learning
  • Video transcoding
  • Massively parallel computations  

Contract Options

AWS EDP, which stands for Amazon Web Services Enterprise Discount Program, is basically another way AWS can provide enterprises a discount off its services with a commitment based on consumption.

Simply explained, if you commit to spend $5MM on AWS services for the next 3 years, and receive a set discount (such as 10% across the board). Even if you don’t spend $5MM you still owe them $5MM, and of course, if you go over you would get billed for the overage.

Use Only What You Need

A more permanent way to lower AWS costs is to evaluate the instance size and turn off non-production AWS EC2 instances when they are not needed. Most development, testing and staging instances are not needed outside of working hours; so, by turning off unnecessary AWS EC2 instances between 8.00 p.m. and 8.00 a.m. and at weekends, you could lower AWS costs for non-production AWS EC2 instances by almost 65%. There are three ways this can be achieved:

  • Tell your developers to turn off their development, staging and testing instances when they are not needed. The pitfall in this scenario is that developers may forget to turn them off, in which case you will still be paying for the compute resources reserved for the instances.
  • The “forgetfulness scenario” can be resolved by reassigning your developers to write scheduling scripts in order to automate the turning off process. This is only a good solution to lower your Amazon AWS bill until you factor in the developers´ hourly rates, the cost of maintaining the scripts and the delayed delivery of the core projects they are working on.
  • The third option to lower your Amazon AWS bill is off-the-shelf scheduling software. Provided you don´t go overboard, and implement a suite of cloud computing management software full of features you will never use, the payback time for off-the-shelf scheduling software is usually a couple of months. Furthermore, the software will help you gain control over your AWS costs.

Properly Size Your Resources

Don’t forget that every time you go down an instance size, you can save 50% of the cost. With RightSizing, you can quickly and easily – even automatically – make these sizing changes to save money. When you RightSize an instance, you find the optimal virtual machine size and type for its workload. A single instance change can save 50% or more of the cost. At scale, the savings potential can be dramatic.

How to Lower AWS Costs with Scheduling Software

Off-the-shelf scheduling and RightSizing software is not only the most reliable and cost-effective way to lower AWS costs, and it is also easy to use. System administrators connect to the company´s Amazon AWS account via a SaaS app and create roles for each of the development teams. Each development team is then assigned their own AWS EC2 instances.

When the development and testing teams sign into the SaaS app, they see only their assigned AWS EC2 instances and recommendations about which non-production AWS EC2 instances are suitable for scheduling or “parking” as we call it, this is when you schedule stop times for your compute resources. For example, if you have a set of development instances that are only needed from Monday through Friday during a 9 AM to 6 PM workday, you could schedule those to be “parked” from 6 PM to 9 AM and on weekends, so you’re not spending money on hours you’re not using. The teams select which of the recommended instances they want to park (if not all), and either choose a pre-configured parking schedule or create a parking schedule of their own.

Not all the non-production AWS EC2 instances have to be assigned the same parking schedule. Instances can be parked according to individual schedules or parked according to policies created by the system administrator via the scheduling software. The software also makes it possible to “snooze” parking schedules, rather than create a new schedule if out-of-hours access is required, and has safeguards in place to return instances to their dormant state if developers forget to park them again.

Users can also “RightSize” their resources. With RightSizing software, users can quickly and easily – even automatically – resolve instance sizing discrepancies to save money.  Not only can rightsizing provide significant savings, but it makes automatically managing idle, unused and overprovisioned resources a breeze, freeing up time users would otherwise be spending on manual or scripted solutions. It takes the burden of tedious and repetitive tasks and decisions off the shoulders of users.

How to Lower Your Amazon AWS Bill to the Minimum

To make AWS cost-effective, it was mentioned above you could lower AWS costs for non-production AWS EC2 instances by almost 65% by shutting down the instances out of working hours. This figure represents how much you could lower AWS costs in total if all your AWS EC2 instances are used for development, staging and testing, and your working week is 8.00 a.m. to 8.00 p.m. Monday to Friday.

Another way to optimize AWS EC2 costs is by sizing the instances to fit your workload. EC2 instances can often become over-provisioned or redundant as their demand lessens by lowering by one size, you can reduce the costs by 50%, and by reducing by two sizes, you can reduce by 75%.

Most companies deploy a mixture of production and non-production instances on Amazon´s Elastic Compute Cloud, so the total savings can be harder to predict. To take the speculation out of how much you might lower AWS costs by, the scheduling software shows you projected savings over the next thirty days once the parking schedules are set, and actual savings once they are operational.

In order to lower your Amazon AWS bill to a minimum, what you could do is schedule all your non-production AWS EC2 instances to be permanently parked and tell your development teams to “snooze” the schedules whenever they want access to the instances. A permanently parked schedule will lower your Amazon AWS bill to the minimum, especially during vacation times.

How to Lower Your AWS Bill to the Minimum
DaysStart TimeStop TimeYou Save
Monday – Sunday7.00 a.m.9.00 p.m.42%
Monday – Sunday8.00 a.m.8.00 p.m.50%
Monday – Saturday7.00 a.m.9.00 p.m.50%
Monday – Saturday8.00 a.m.8.00 p.m.57%
Monday – Friday7.00 a.m.9.00 p.m.58%
Monday – Friday8.00 a.m.8.00 p.m.65%

Better AWS Management and Increased Accountability

It was also mentioned above that, in order to lower AWS costs meaningfully, you have to take control of your AWS expenditure. Scheduling software helps you do this by enabling better AWS management and increased accountability. You will also make indirect cost savings while instances are parked, as they will not need to be monitored by network security teams.

The better AWS management comes from the scheduling software´s single dashboard view of your Amazon accounts. Using the single dashboard view, administrators can easily identify unused or underused instances and reassign them, place them into a cheaper region, place them in a different pricing plan, or retire them altogether.

Administrators have access to reports that show how much AWS costs are being reduced by team, user or credential. This information increases the accountability of development teams and can provide valuable data for accurate project and capacity planning. The reporting function is also a useful tool for keeping an eye on the health of your budgets.

Free Cloud Cost Optimization from ParkMyCloud

ParkMyCloud is a versatile and lightweight scheduling app that conducts a discovery of resources in your Amazon account and finds non-production AWS EC2 instances suitable for parking. Not only a reliable and cost-efficient way for to lower your Amazon AWS bill, ParkMyCloud allows administrators to create policies, better manage your Amazon accounts, and increase governance over development teams.

More than 1,000 companies use ParkMyCloud’s, including:

  • A global fast food chain is managing 3,500+ resources in ParkMyCloud and saving more than $200,000 per month on their cloud spend
  • A global registry software company has saved more than $2.2 million on their cloud spend since signing up for ParkMyCloud – an ROI of 6173%
  • A global consumer goods company with 200+ ParkMyCloud users saves more than $100,000 per month on their cloud spend

ParkMyCloud has a competitive pricing structure that, for a standard tier customer, will pay for itself within two months. However, before committing to anything, we invite you to try ParkMyCloud free of charge for fourteen days in order to evaluate our scheduling software in your own environment and see by how much you could lower AWS costs by parking your non-production AWS EC2 instances.

To take advantage of this opportunity, simply click the “Try it Now“ button on this page. If you have any questions before starting your free trial, feel free to contact us. Our team will be happy to answer your questions and explain in further detail how to lower your Amazon AWS bill by using ParkMyCloud to schedule on/off times for non-production AWS EC2 instances.