Amazon Web Services offers various pricing models according to the custom needs of small to large scale companies. AWS provides an on-demand pricing model that charges on actual cloud usage and consumption. Companies can reduce the cloud costing by saving resources with Reserved Instance and decreasing the price by 30-50%.
Additionally, AWS provides Spot Instances for the highly advanced app so that users can negotiate over AWS providers and price. AWS is very easy to use, by paying more attention to proper planning and knowledge, businesses can achieve greater pricing advantage.
Here we are going to discuss primary tips to optimize cloud costs with AWS.
1. Remodelling Unused RI (Reserved Instance)
Organizations can re-purpose their unused RIs for initial instance configuration without penalty. While remodelling the RIs, businesses can change the size of RIs within the same instance family. RIs can be modified in the same availability zone as far as they are belonging from the same AWS region and can be adjusted between EC2-VPC and EC2-Classic.
Moreover, businesses can also sell the unused RIs in the marketplace as well. AWS allows for re-purposing Linux Instances too. But, it does not involve RIs remodelling from open source Linux to RHEL.
2. Pareto Principle
A research stated that block storage (EBS) and compute (EC2) resources hold over 80% of AWS costs. Usage of RDS and S3 adds another 10% resulting in an overall cost of 90%. It helps businesses in deciding which resources should or should not be considered for price optimization.
3. Monitoring of Reserved Capacity Usage
Keep tracking your cloud usage closely and be aware of your usage capacity. According to a survey, AWS users didn’t enjoy RIs due to the fear of being locked in. However, RIs holds tremendous pricing advantages with 30-60% price reduction.
Make a decision of RI purchase having a system in place to track usage. If you need to use the AWS resources for more than six or seven months in a year, then RIs are the best cost saving option.
4. Discount Rate Delta
AWS pricing method follows three payment approaches for RIs:
- All Upfront
- Partial Upfront (partial payment of the cost upfront and rest of the amount in monthly instalment)
- No Upfront (payment of fixed monthly amount for RIs)
AWS facilitates users with all required resources whenever needed. As per the new Reserved Instance pricing model, if a reserved resource is not in created or in use, businesses can lose their money as AWS continues to charge them for reserved capacity.
All upfront option facilitates businesses with a massive compound discount if they do not have cash flow constraints.
Difference of discount rates between all upfront and partial upfront is tiny. As it depends on liquidity, businesses can choose from All Upfront and Partial Upfront without concerning about discounted rate too much.
While selecting No Upfront approach, the discount rate will be substantially lower.
5. S3, S3 Glacier and Reduced Redundancy Storage (RRS)
There are three types of object storage in AWS S3, S3 Glacier, and S3 RRS.
S3 is one of the most popular object storages that has a certain level of redundancy across various available zones within a region.
Glacier provides archival services that are similar to tape backup in terms of traditional data centers. The advantage of Glacier is its very cheap, around one cent per gigabyte per month. When it comes to drawback, it takes four to five hours for object retrieval.
S3 Reduced Redundancy Storage (RRS)
If you are ready to sacrifice on redundancy reduction, then go to purchase S3 Reduced Redundancy Storage. It costs around 20% less and caters reduced redundancy than S3.
6. Discounts and Credits
AWS cloud providers offer an incremental discount as usage increases. RIs provide reduced costs, however, if the total value of RIs is over $500,00, AWS also facilitates users with 5-10% more discount. AWS also provides credits rather than offering monetary discounts. Thus, authenticated AWS Advisor helps new startups to optimize the cloud costing. Moreover, AWS provides cost reduction for greater storage usage.
7. DynamoDB and Relational Databases
While explaining AWS pricing, the key focus is on RIs for instances without informing about other options of using RIs for DynamoDB and relational databases (RDS). To make RIs a profitable investment, database plays an essential role by offering steady cloud capacity and 24/7 runtime.
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