Cost governance in AWS or any cloud is an ongoing process. Multiple departments or divisions using a corporate or agency credit card without strict AWS cost governance policies in place usually do not result in the best outcomes. Leaders need to have cloud cost spend visibility. I have seen inadequate cloud cost governance with poor cloud cost visibility on many occasions that had led many projects to failure. This article expects to guide those who have failed and those who are initiating AWS cost governance for your projects with the best tips to manage AWS cloud cost.
How to begin with…
The first and foremost step in your cloud cost governance procedure should be creating a cost-conscious culture within your organization. You can take the support of your organizations’ Cloud Center of Excellence team that oversees the technical and architectural quality of your cloud resources to roll out towards your cost-conscious agenda.
For example, you can appoint an individual/s from the Cloud Center of Excellence team who is/are responsible for organization-wide cloud cost awareness and who can learn themselves the basics of AWS cost management using AWS training resources. They can evangelize the organization on AWS cost awareness and can help establish basic governance best practices, cost allocation strategies, reporting methodologies.
The following AWS cloud governance practices can commonly adopt to any organization for cost optimization and cost governance process optimization.
Macro Best Practices that Reduce Your AWS Bill
AWS Billing and Cost Management Console is the best place to get started with cost management. Its AWS Cost Explorer, AWS Budgets, and Cost and Usage Reports tools can give you the fine-grain information necessary for optimum cost management. So you can quickly identify and resolve the source of any unanticipated costs.
AWS Cost Explorer
You can use AWS Cost Explorer to gain visibility to your AWS costs and usage data over time. Generally, AWS Cost Explorer produces 12 months of historical usage data, ongoing cost and usage data for the current month, and a cost and usage forecast for the next three months. However, except for the available default reports on Cost Explorer you can also create personalized reports to capture granular data based on API operation, AWS services, AWS regions, availability zones, usage types, instance types, linked accounts, purchase options, and cost allocation tags.
Same as you are budgeting for other IT infrastructure on your annual, bi-annual, or quarter budget, you also can perform budgetary procedures for AWS resources on AWS Budgets and arrive at predictable resource procurement and cost patterns. You can create a monthly, quarterly, or yearly budget to track AWS cost and usage using the same filters in AWS Cost Explorer on AWS Budgets.
Moreover, you can create up to five threshold alerts for each budget on AWS Budget that alerts up to ten email subscribers. Also, you can publish these alerts to an SNS topic that may trigger a proactive action for optimum resource utilization (if specified).
Consolidated billing is a common cost governance strategy helping to lower costs in general in finance. AWS Organization’s Consolidated Billing feature lets you apply this strategy to lower your monthly AWS cost. If you have multiple accounts using AWS resources in your department or organization, Consolidated Bills produce a combined invoice for all those accounts. However, the actual perk of Consolidated Bills is that you can obtain a detailed cost report for every AWS account associated with your paying (main) account.
The other advantage is you can move up the ladder of AWS pricing tiers from the more expensive on-demand model to more cheaper Pay-Less-by-Using-More tier and Save-when-you-Reserve tier. A consolidated bill captures higher resource usage that AWS rewards with lower prices. You will also be able to allocate AWS instances more economically when you are billing as a consolidated bill, as you can allocate unused reserved instances in one account to another account’s instance usage.
Micro Best Practices that Reduce Your AWS Bill
In addition to the above macro practices, there are also micro cost governance practices that can majorly affect your AWS bill and so, never miss. I like to name the most prominent five of them as the “five micropillars of AWS cost optimization”.
1. Rightsizing Instances
You can cut down a fair amount of your AWS cost by downgrading underutilized EC2 instances (below ~45% of their peak utilization). Also, you can move such EC2 instances to different instance families by timely analysis of utilization metrics.
For example, suppose you initially selected an i3.metal storage optimized instance for an analytics application that you later find as more of a memory-intensive application. So, moving that EC2 instance to a memory-optimized instance family can save bucks from your bill in the long run.
2. Instance Scheduling
You can save around 65% from your EC2 instance bill if you schedule weekly regular on/off-hours (e.g., 8.00 am to 5.00 pm on weekdays) for instances in non-production environments. Surprisingly, you can save even more if teams work in irregular shifts at irregular hours.
However, you should analyze utilization metrics to schedule instances more practically and more cost-efficiently. Also, consider always stopped instance schedules with instances that can be accessed if only required.
3. Terminate Obsolete Resources
Often, EBS volumes, obsolete snapshots, and unused Elastic IP addresses incur unnecessary hidden costs. You can easily track such zombie resources using the AWS Trusted Advisor tool and delete them.
4. Reserved Instances and Spot Instances
Spot instances can save up to 60% than on-demand instances. Reserved instances provide 30-50% cost savings if reserving instances in advance for 1-3 years. But, effective management of reserved instances is crucial to eliminate sacrificing over wrong reserved instances plans and underutilized instances.
5. Move Cold Data to Lower Cost Tiers
Cold storage management can lower storage costs to as low as $0.00099/GB per month. There are three Amazon S3 cold storage options with lower price points as S3 Infrequent Access, S3 Glacier, and S3 Deep Archive Glacier.
You can establish an automated mechanism to pick data when accessing infrequently in active production use and are less critical in the storage recovery point. So, you can move them to lower storage tiers.
Final Thoughts in AWS Cloud Governance Practices
Without strong cloud cost control measures, the initiative ROI is at risk. Both cost optimization and consolidation measures eliminate waste, so they should be taken into consideration at every opportunity in your cloud journey. You have to constantly monitor your AWS cloud to actively and timely identify unused excess capacity to reduce your cloud bill. And, always be mindful to architect and engineer for cost avoidance!