How To Optimize EC2 Costs

Incepted with the aim of reducing costs of acquiring hardware upfront, the Amazon Elastic Compute Cloud (EC2) of the Amazon Web Services (AWS) has made development and deployment relatively faster and less costly.

However, the retaining costs from some unused storage, Instances and features of the Amazon EC2 remains a glitch in EC2 cost-effectiveness.

In this article, I’ll be highlighting some ideal ways to optimize your AWS EC2 costs using;

- Amazon provided cost management tools and some

- Best Practices for Reducing Your Amazon Web Service EC2 bills

    AWS Costs Management Tools

    Amazon has provided us with a good number of analytics and automation tools to help streamline AWS data analysis and otherwise, heavy tasks. I’ve listed a number of these tools, with a brief explanation of how they work and how you can use them to optimize and reduce your AWS EC2 costs.

    AWS Cost Explorer

    The Amazon Cost Explorer is a tool that provides a well-detailed interface that presents various data from your Amazon Web Services.

    It shows you the usage, costs, and return on investment for Amazon services over the last twelve months.

    Thereby helping you keep up with trends and effectively predict estimated future costs of your Amazon Web Services EC2.

    Amazon Web Services EC2 Amazon Web Services EC2

    Cost Explorer can also be accessed directly from your preferred web analytics tool using the Cost Explorer API.

    AWS Instance Scheduler

    Using data from Cost Explorer, the Amazon Instance Scheduler tool helps you automatically stop Instances. In extension, it also helps to scale and schedule Amazon Web Services EC2  based on your expected utilization pattern, requirements and needs.

    Using Instance Scheduler To Optimize EC2 Costs Using Instance Scheduler To Optimize EC2 Costs

    AWS Cost and Usage Report

    This tool provides an hourly, daily, or monthly report of costs, usage, services, pricing, and other additional AWS data in the most comprehensive form. Using this tool aids in giving insights on EC2 cost consumption based on usage.

    AWS Cost and Usage Reports Tool AWS Cost and Usage Reports Tool

    Data presented by this tool can be further enhanced using Cost Allocation tags and Cost Categories.

    AWS Operation Conductor

    The Operation Conductor tool helps to automatically resize the Elastic Compute Cloud(EC2) Instances based on data gotten from the Cost Explorer tool.

    Recommended read:AWS Cost Optimization Checklist.

    AWS Trusted Advisor

    The Amazon Web Services Advisor offers a range of functionalities which includes cost optimization. EC2 reserved instance optimization and lease expiration are some of the recommended aspects, aided by the Trusted Advisor tool, to help reduce costs to maximum effectiveness.

    AWS Trusted Advisor Dashboard AWS Trusted Advisor Dashboard

    Best Practices For a Reduced Amazon Web Service EC2 Cost

    Based on information and experience from using AWS services, below are some best practices highlighted by experts for a higher cost-effective AWS EC2 service.

    Purchase Savings Plan for Effective Capacity

    As the name depicts, the AWS Savings Plan is specially curated to help you use the best Amazon EC2 service available while paying a minimal price. The Savings Plan boasts of up to 72% price saving over the normal Reserved Instances, stating a significant cost cut.

    Identify and Terminate Unused Instances

    Identifying, downgrading, and deleting underutilized or unused instances can help make a great save of storage and of course, cost. You can use data provided by the various management tools to identify used instances and downgrade it to a more generic instance or better still, delete if it’s basically of no use. This will make a good cost save for your AWS EC2.

    Verify That Instances Types Still Reflects the Current Workload

    Using the provided AWS CloudWatch CPU, network, and memory metrics, you get to know various changes in the AWS environment, thereby tracking and eliminating unused instances.

    Verify That the maximum I/O Performance of the Instance Matches the EBS Volume

    Knowing the EC2 Instance type limits the maximum throughput to all connected Elastic Block Storage (EBS) volumes, making sure it matches with the configuration of your EBS volumes. The EBS volume type and provisioned IOPS define the maximum throughput. You should check out the EBS Optimized Instances for more information.

    Use Spot Instances for Stateless and Non-production Workload

    Spot instances are EC2 Instances that can be purchased for a lower price. When working with stateless and non-production workloads, it's recommended to use the EC2 Spot Instances instead of the regular EC2 Instances. With up to 90% cost optimization, Spot Instances should be preferably be used for stateless workloads.

    Amazon EC2 Spot Instance Amazon EC2 Spot Instance

    You should however be aware that your Spot Instance is subject to termination before production use, if the spot price exceeds your bid.

    Switch To Latest Instance Types

    Apart from the fact that you'll be getting a well improved overall performance, switching your EC2 Instance to the latest Instance types reduces AWS cost up to 6%.

    Make Use Of AMD or ARM-based Instances

    Using Intel based Instances like Advanced Micro Devices (AMD) or ARM has proven to be a great cost saver.

    An AMD based EC2 Instance saves up to about 10% while an ARM-based Instance has been recorded to save up to 40% in AWS cost.

    Move Cold Data to Cheaper Storage Tiers

    S3 Infrequent Access, S3 Glacier and S3 Deep Archive Glacier are different tiers offered by the Amazon S3 for non-frequently-accessed data. You can automatically identify data when it is no longer needed for active production use and move it to the cheapest cold storage tier. Cold storage can reduce storage costs per GB notably from $0.023 to as low as $0.00099.

    Switch to Amazon Linux or any other Open Source Operating System

    The broad cost-saving advantage of the free Amazon Linux Open Source Operating System managed by Amazon itself is a great cost-saving choice to consider. Migrating might mean a lot of work but it is definitely worth it.

    It’s generally advisable to try out the free plan of the Amazon Web Services in order to get insightful data to calculate estimated costs of AWS that'll best suit your business needs.


    It’s generally advisable to try out the free plan of the Amazon Web Services in order to get insightful data to calculate estimated costs of AWS that'll best suit your business needs.

    You should also consider this Checklist for AWS cost optimization to help you in maximizing all possible ways to make your Amazon EC2 more cost-effective.

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