How to Reduce AWS Costs

If your organization is involved in any type of IT development on Amazon´s Elastic Compute Cloud (EC2) service, finding ways of how to reduce AWS costs can be an issue. Naturally you do not want to limit the resources your developers have available to them, but you also want to make sure that the projects they are working on remain within budget and are financially viable.

Why do you need an AWS Cost Reduction Strategy?

Any organization using public cloud should have a cloud cost management plan in place – whether or not you are already over budget, the best time to start is now. Reducing AWS costs can sound like a daunting challenge, but in fact, if you are like most organizations, you are probably wasting money on resources you are not actually using. We estimate that $14.1 billion will be wasted on unneeded cloud resources in 2019 alone.

There are two major sources of wasted cloud spend:

  • Idle Resources – non-production resources, such as those used for development, testing, staging, and QA, are typically only needed during a 40 hour work week. Since AWS on-demand charges are based on the amount of time that resources are left running, that means that on nights and weekends (about 65% of the week), the spend on these resources is wasted.
  • Oversized Resources – AWS offers a number of sizes for every instance options, and for many users, the default behavior is to choose the largest size available. After all, you don’t know what capacity you might need in the future, right? However, a recent study performed by ParkMyCloud found that the average utilization of deployed AWS resources was a mere 2% – indicating routine overdeployment. By reducing an instance by one size, you reduce the cost by 50%. Reducing by two sizes saves 75%.

Cutting spend on resources that are completely unnecessary is the easiest way to quickly and significantly reduce AWS costs.

Solutions to Reduce AWS Costs

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There are various solutions your organization can implement to reduce AWS costs. For non-production instances that are only needed during working hours, you can instruct development teams to switch these 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.

For some applications, other AWS purchasing options beyond On-Demand may be useful. For example, if you run non-time sensitive applications that can be interrupted, you can use Spot Instances to reduce AWS costs. If you are confident in future capacity requirements, you can achieve an AWS cost reduction by using Reserved Instances or Convertible Reserved Instances.

However, none of these solutions are perfect. Your developers may only remember to switch off non-production instances for a couple of days, and writing and maintaining scheduling scripts reduces available resources for priority tasks. There is not an easy way within AWS to address AWS instance sizing issues outside of a manual review, which is impractical.  Spot instances can be terminated as soon as the market price surpasses your bid, so they’re only an option for certain applications.

And while Reserved Instances and Convertible Reserved Instances will achieve an AWS cost reduction, they require organizational foresight and significant upfront payments if you want to take advantage of the best discounts. Plus, if AWS instance pricing is cut during the time of your contract (a common occurrence), the difference between your Reserved price and the On Demand price becomes even less. Reserved instances may be a good fit for some production instances, but ultimately we would not recommend them as a primary strategy and there are other solutions to reduce AWS costs you should also consider.

Optimizing AWS Costs with AWS Management Software

A more appropriate solution is AWS management software. AWS management software helps you reduce AWS costs automatically and make the AWS cost reduction permanent through policy-driven automation. With AWS management software you can:

  • Schedule stop/start times for non-production instances.
  • Right-size assets for both cost and performance.
  • Easily identify and terminate zombie assets.
  • Take advantage of machine learning and get recommendations about purchasing options.
  • Drive accountability and establish benchmarks.
  • Improve governance over all your cloud accounts.

Amazon offers bits and pieces of what you might look for in an AWS management software solution, but they are disjointed, not well organized, and have limitations if you operate in a multi-cloud environment or want to know in advance how much you will reduce AWS costs. Alternatively there are plenty of large and expensive cloud management platforms vendors offering ways to achieve an AWS cost reduction, but many of these over-complicate procedures – increasing the chances of human error.

In order to easily achieve AWS cost optimization, here’s what you should look for in AWS cost management tools:

  • Automation and action – too many cloud management tools provide visibility without making it easy to take action to actually reduce costs.
  • Data-based recommendations – look for features to recommend cost savings strategies based on your actual utilization history.
  • RBAC and user management – unless you’re a one-man team, you’ll want the ability to easily add and govern your existing AWS users through single sign-on (SSO) and role-based access control (RBAC).
  • Integrations – keep in mind what other tools you may want to integrate with when evaluating AWS management tools.

Reducing the Costs of AWS EC2 Simply

In order to reduce the costs of AWS EC2 simply, try ParkMyCloud. With ParkMyCloud you only have to login to your cloud account(s) via ParkMyCloud´s platform and create a permissions-limited IAM role for our app. The app conducts a discovery of all your AWS assets and makes recommendations about which are suitable for scheduling and resizing according to the tags and names you have assigned them.

Thereafter, to schedule start/stop times for the recommended assets, simply apply a schedule from a list of preconfigured schedules or create a new one using an intuitive GUI. Different schedules can be assigned to different assets or, if you have development teams that work irregular hours or in irregular patterns, you can apply an “Always Parked” schedule which can be overridden when access is required with the click of a mouse or through a command in your favorite ChatOps tool. Similarly, review ParkMyCloud’s recommendations of resources that can be reduced in size and accept recommendations to rightsize them for cost savings.

You can use ParkMyCloud’s automated policy engine to automate schedule and sizing actions based on your tags, and add resources and users to teams for simplified governance.

By How Much Can You Reduce AWS Costs?

Cost reductions through scheduling are easy to estimate. Based on a pre-configured schedule of running non-production EC2 and RDS instances only between 8.00 a.m. and 8.00 p.m. Monday to Friday, you will reduce AWS costs by 64%. Your AWS cost reduction on non-production instances could be higher or lower depending on the schedules you actually apply and the number of times they are interrupted outside those hours as the table below demonstrates.

By How Much Can You Reduce AWS Costs?
Schedule Start Time Stop Time Hours Saved You Save
Mon-Sun 8.00 a.m. 8.00 p.m. 84 per week 50%
Mon-Sun 9.00 a.m. 5.00 p.m. 112 per week 66%
Mon-Sat 8.00 a.m. 8.00 p.m. 96 per week 57%
Mon-Sat 9.00 a.m. 5.00 p.m. 120 per week 71%
Mon-Fri 8.00 a.m. 8.00 p.m. 108 per week 64%
Mon-Fri 9.00 a.m. 5.00 p.m. 128 per week 76%

However, rather than estimate by how much you can reduce AWS costs, ParkMyCloud´s interface displays the exact projected savings as you apply each schedule. Once the schedules are activated, the GUI displays a second figure which represents how much of an AWS cost reduction you have achieved in the current month. If you cannot wait to find out how much you could reduce AWS costs by scheduling start/stop times, try our Cloud Cost Savings Calculator now.

Here are just a few examples of organizations that are saving money with ParkMyCloud’s AWS cloud management platform:

  • A global fast food chain is managing 3,500+ resources in ParkMyCloud and saving more than $200,000 per month on their AWS and Azure spend
  • A global registry software company has saved more than $2.2 million on their AWS 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 AWS and Azure cloud spend

Further Ways to Achieve an AWS Cost Reduction

Leaving non-production assets running is one of the biggest contributors to “cloud waste” – estimated to represent around 30% of all cloud spend – and whereas scheduling stop/start times for non-production instances will eliminate some of the waste, it will not eliminate all of it. This is because assets are often deployed in the cloud with more CPU, memory and storage than they need, or because demand decreases over time, or because assets are left active when they are no longer required.

ParkMyCloud can further help you achieve an AWS cost reduction by highlighting which assets are over-provisioned and making recommendations about their optimal configurations – or recommending they are terminated if they are serving no useful function. Thereafter, you can apply policies to maintain optimization, and to alert you to opportunities to move data to a cheaper storage option or purchase Reserved Instances.

Try ParkMyCloud´s AWS Cost Automation Software Free

ParkMyCloud is a lightweight SaaS app that enables businesses running AWS EC2, auto scaling groups, and RDS instances to pay only for the resources they use. By scheduling start/stop times for non-production instances, resizing overprovisioned instances, and taking advantage of the other elements of ParkMyCloud´s AWS cost automation software, you effectively get hands-free governance of your accounts.

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To discover how much our AWS cost automation software could be reducing the cost of AWS EC2 deployments in your organization, you are invited to try ParkMyCloud free for a trial period. There are no setup costs, no credit card required, and no commitment to continue with the service once the trial period has expired. Whatever amount you reduce your AWS costs by – that is yours to keep.

To find out more about this special offer, or for more information about how to reduce AWS costs, please do not hesitate to contact us. Our friendly team will guide you through the account creation process, walk you through the ParkMyCloud GUI and provide advice about how to view and download reports, or how to integrate ParkMyCloud with existing automation and continuous delivery tools.

  • ParkMyCloud automates the process of switching non-production instances on and off.
  • The software makes recommendations about which instances are suitable for scheduling and rightsizing.
  • Businesses discover in advance how much each schedule will reduce AWS costs and can easily report savings to management.
  • Administrators gain total visibility to increase governance and enforce accountability.
  • Teams save time and keep developers focused on creating value for your business.
  • Take a free trial of ParkMyCloud today and see by how much you can reduce AWS costs.