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Defining AWS Cost Optimization

Global spend on Amazon Web Services (AWS) is predicted to exceed $100 billion in 2023. (1) As AWS spending increases, so does the need to ensure your AWS resources are used effectively and efficiently. If you’re feeling the pinch of rising AWS costs, you are not alone. In a recent cloud survey with large enterprises, respondents reported their cloud spend was 13% over budget and expect their cloud to increase by 29% in the next year. (2)

To help you with sorting out your rising AWS costs, this blog will define AWS cost optimization, identify some services and tools that you can use to optimize yourself, and explain why consulting may be necessary.

What is Cost Optimization?

Cost optimization is the process of minimizing expenses without compromising. It is an important aspect of running a successful business, especially in today's competitive market where every dollar counts. Surprisingly, most companies get cloud spend wrong. There are a number of factors that contribute to this fact, such as complicated pricing models composed of numerous configurations from instance type to data transfer, IP addressing, storage, and more! The complexity is only amplified when the number of services increases since most services have a unique pricing structure.

How to Optimize?

In order to optimize you need to identify opportunities that require optimization. In many circumstances cost optimization involves removing waste. There is a common misconception that cost optimization will hinder the performance of an application. This theory stems from the truth that cost and performance are two sides of the same coin. The common saying “you get what you pay for” comes to mind. Although, in situations where an application is over-provisioned there is an opportunity to reduce allocated resources to save money without reducing the applications performance below what is actually required.

Luckily Amazon understands the significance of cost optimization. They have created services dedicated to understanding and optimizing costs that you can leverage within your own environment. The value these services provide will depend entirely on the products you are using.

Cost Explorer

Enables you to view and analyze your costs and usage. Allows you to filter and group data so that you can better understand your costs. It can be quite difficult to optimize what you do not understand.

Compute Optimizer

Analyzes the configuration and utilization metrics of your resources. Helps you right size workloads running on EC2, ECS, and Lambda based on current utilization data. It can make recommendations like modifying instance and volume types.

Pricing Calculator

Web-based planning tool that you can use to create estimates for your use cases. Can be used to forecast costs before you provision anything. Supports numerous services with lots of configuration options that can be invaluable in understanding cost calculations.

Trusted Advisor

Provides recommendations that help you follow best practices. Can help you save cost with actionable recommendations by analyzing usage, configuration and spend. Unfortunately, only customers with business and enterprise support plans have access to all checks.

Why Consulting?

Most companies simply don’t have the time to dedicate their resources towards cost optimization. If they do expect some degree of cost optimization from their employees it is typically only a small portion of their role. After all, your employees are there to deliver business value.

The previously mentioned services and tools can be great at quick wins assuming you are using the services that they are focused on. Unfortunately in many cases ensuring the best optimization requires a need to look at more in depth changes such as: architectural updates, service replacements, or application rewrites. Since these changes require deep cloud knowledge and time to maximize savings, it may be best to seek outside help; Bravo LT can be that help.

Written by Justin Wheeler, Senior Software Engineer


1. Haranas, M. (2022, December 22). AWS Could Hit $100 Billion Revenue Milestone In 2023. CRN. Retrieved March 6, 2023, from https://www.crn.com/news/cloud/aws-could-hit-100-billion-revenue-milestone-in-2023

2. Adler, B. (2022, March 21). Cloud Computing Trends: Flexera 2022 State of the Cloud Report. Flexera. Retrieved March 6, 2023, from https://www.flexera.com/blog/cloud/cloud-computing-trends-2022-state-of-the-cloud-report

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