AWS Cost Optimization

To run any successful and scalable business in contemporary times, you need to digitize it. For successful digitization, businesses need either cloud or infra as a service. Both options have their pros and cons. However, if a business is opting for the latter and choosing AWS, then it needs to understake AWS Cost Optimization practices.

Cloud is gaining a lot of popularity as businesses no longer purchase and maintain their own servers to meet their needs. You can save the efforts and variable costs that come with onsite servers and their maintenance. Furthermore, with the help of Cloud, you don’t only auto-scale but can easily manage disaster recovery and successfully carry out your IT Services in a pay-as-you-go mode scale. Cloud providers manage all the on-premise functions, and businesses only pay for the resources they need and use, saving a lot of costs. 

Amazon Web Services (AWS) is one of most famous cloud providers for business IT infrastructure in today’s time. 

AWS has changed the way businesses manage and store their data, irrespective of their sizes. It is by far the biggest cloud platform globally, with a 33% market share, compared to Microsoft Azure’s 21% and Google Cloud’s 10%. AWS help businesses expand their capabilities and facilitate growth, without investing significant capital.  

However, there are two sides to a coin. While cloud computing platforms are cost-effective, many times small expenses go unnoticed. The overtime addition of such expenses results in high monthly bills. Therefore, AWS cost management and optimization are important practices for a business. Follow some tips to reduce AWS bills and enjoy a cost-effective cloud platform.  

AWS Cost Optimization Best Practices:   

Best practice of AWS cost optimization
AWS Cost Optimization

1. Reserve the right instances and strategically use spot instances 

AWS offers pre-payment options for EC2 Reserved Instances (RI) and provides considerable discounts related to customers’ on-demand pricing. Discounts may go up to 75% off the regular price.   

AWS offers different RI types with discounts and varying terms. You can choose based on the number you require, the flexibility you need for your reservations, and lastly, the duration you need your instances for. This AWS cost optimization practice helps you to avoid getting into a RI commitment that becomes costly over the long term.   

Spot instances use spare EC2 capacity to allocate it to users, conditional to availability and at a cost that is less than the on-demand price. Those who opt for spot instances may get access to compute resources at a discount as high as 90% off regular prices, allowing users to enjoy access to higher capacity than what their regular budget would have accommodated.   

Spot instances may be useful in reducing costs if the business uses containerized systems like Docker, stateless web servers, or any other high-performance or Big Data systems.   

A series of presentations are available on Spot Best Practices which would help you get a better understanding of spot instances and their uses. And while you are visiting the AWS website also read through Spot Fleet, which allows one to define a capacity pool, including Spot and On-Demand capacity. To optimize AWS cost, factor in different options that allow you to choose the lowest-priced instances, or more capacity depending on weighted preferences. Spot instances significantly help in AWS cost management and optimization as they can be terminated easily and returned to AWS once the requirement is met.  

AWS cost management and optimization.

2. Down-scaling during off-hours 

Awareness about instances not in use at all can help a business optimize its AWS cost. Some EC2 instances supported applications may be accessed only during office hours, and dependencies on Amazon’s Relational Database Service (RDS) occur at particular hours during the day.

AWS Instance Scheduler assist business with creating a start and stop schedule for both instances. Despite around-the-clock usage of applications and data sources, weekends and even some periods during working days experience considerably reduced demand for instances. You can schedule down-scaling for these periods or off-hours using automated development infrastructure like CI/CD resources and test environments to reduce business efforts and optimize AWS costs.   

Components of the AWS Instance Scaler Solution  

To use the Instance Scaler solution, you need to create an AWS Lambda that gets triggered by timer events originating from Amazon CloudWatch. Amazon DynamoDB is the source for scaling configurations, and the Lambda function then scales your EC2 and RDS infrastructure based on the same. 

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3. Save costs through private IPs 

Using private IPs to access the database and communicate with internal servers is a good practice to optimize AWS costs. Public IPs are relatively costly and charge internet costs for downloading and uploading data. You should carry out internal communications and access to data through private IPs instead of spending big bucks on public resources.   

4. Eliminate unused capacity 

Running applications or services on a large and powerful instance type might lead to additional money spending and non-optimized AWS costs and capacity. The performance profile of your application would have unused capacity and a wrongly matched instance type.   

Instances are provided across various EC2 instance types. Different types and generations within each family further offer different configurations catering to the needs of your application. A clear understanding of the application performance enables a business to match the same with a more suitable and specialized instance type, facilitating better performance and lower hourly costs. This is an effective way of AWS cost optimization.   

5. Delete unattached EBS volumes 

Elastic Block Storage (EBS) service providers store Elastic Cloud Compute (EC2) instances in the provided space. Keeping storage resources separated from the compute instance enables a business to detach the storage volume and attach it to a new instance, as and when required.   

Since getting rid of an EC2 instance does not result in the deletion of any associated EBS volumes, it is no surprise for accounts to have unattached volumes. Looking for such accounts and deleting them is a practice that leads to AWS cost optimization. You can easily find EBS volumes for each region in your AWS account. Just log in to your account and view the EC2 Dashboard. Concerns may come up around the need to access the content of the volume in the future. You can create and restore an EBS snapshot as per requirements in such a case.

Large establishments can set up automated processes to look up unattached volumes and delete them. These automated processes can also obtain confirmation of the volumes not being in use for a set period before deletion.    

6. Turn on scaling  

Post automated scaling- down of your instances during off-hours, continuously running applications and services could be used to identify usage patterns and potential areas for further tuning, by accessing the usage history. Different approaches could be undertaken depending upon whether you go for horizontal scaling of the infrastructure or vertical one. The former involves adding supplementary instances of the same service while the latter is done by increasing the size of the same instance running your application.  

Scheduled and dynamic scaling is an option for horizontal scaling. It scales your Auto Scaling Group (ASG) concerning a schedule or traffic and resource usage. For more specialized scaling needs, third-party solutions work well. Online retailers such as Ticketmaster, for instance, can anticipate a demand increase by looking at the scheduled release of tickets for trending events, and using custom solutions in order to scale their infrastructure out ahead of the demand surge.   

For vertical scaling, automate the process of starting an application and restarting it on a different instance size in response to changes in demand, using an AWS CloudFormation template. Although this process may take up to a few minutes to carry out, it facilitates an automated change, and execute the same in a timely scheduled manner.   

7. Identify and track cost changes   

Be wary of the changes happening in your surroundings and the potential financial consequence of any such change. This would help you to anticipate and identify any unknown additions to your month-end bill.   

However, it is not that easy to keep a track of all deployed resources and their potential outcomes. Here, AWS Cost Explorer comes to your rescue, provided your infrastructure is tagged properly. This tool helps businesses to view costs and arrange the same from high- low for each tagged group. Furthermore, some additional tools help to identify and track changes and adjusting thresholds assist with configuring change notification time and have an impact on costs.   

track AWS cost management


While some above-mentioned practices can be implemented easily, within a few minutes, others may demand research and resource planning. Furthermore, at the time of implementing these AWS cost-optimizing practices, you might come across some additional cost-effective/saving measures specific to the nature of the organization and its needs.   

Be vigilant and always keep an eye out for running discounts in order to manage and optimize your AWS costs.   


Q1. Which cloud platform is cheaper Azure or AWS? 

Cloud costs depend upon the servers used and business needs.  
While AWS might be more affordable in Linux and Open-Source tech, Azure is cost-effective in Windows platform. 

Q2. How can you reduce AWS cloud cost?

There are plenty of ways to managing and reducing your AWS costs. You can reserve the right instances at discounts, use spot instances to gain cost advantages, practice down-scaling during off-hours, identify changes as and when they happen, use private IPs for data base.  

Q3. How to optimize cost in AWS?

AWS costs can be optimised by eliminating unattached EBS volumes, getting rid of unused capacity and scale tuning. 

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