The 2021 State of the Cloud report from Flexera states that 31 percent of respondents (nearly double last year’s 16 percent) reported an annual spend of at least $12 million ($1 million per month) on public cloud, while 76 percent spend $1.2 million or more per year ($100,000 per month). That’s a lot of money!

That may be money well spent, but it’s likely your organization doesn’t have that kind of budget. For purposes of this article, we’ll talk about cost optimization and efficiency while using AWS specifically. With that said, what are some of the keys to successfully managing your AWS environment to reduce costs?

Tip 1: Use AWS billing/cost optimization tools

AWS has many tools within its ecosystem to help its customers monitor their environments and see exactly where their spend is going. Their cost management products are accessible directly through links in the services menu on the AWS Management Console, as well as via the AWS Billing & Cost Management console. The AWS Cost Explorer also provides opportunities to optimize costs, including recommendations on purchasing reservations (think bulk-buying servers at Costco instead of buying individual servers at your local grocery store). See this tutorial from Amazon for more information about getting started with cost management.

Tip 2: Exercise third-party tools to help manage costs

AWS itself offers some good places to get started, but unless you have the knowledge and skillset to navigate the platform and understand the reports (that also means having the time to read the reports), enlisting some outside help will likely be a simpler approach. There are lots of cloud optimization tools in the market today that can help you easily identify spend trends, and some go above simple identification to make recommendations for lowering your spend. Using these tools is a great way to help you identify cloud waste, as mentioned below.

Tip 3: Plan and manage waste

Cloud waste is no joke. Waste includes a number of things, such as allocating the wrong number of resources to an environment or running instances inefficiently. There are multiple reasons for this that could be discussed in a whole other post, including a lack of visibility into your environment and the complexity that comes with your cloud bill (think thousands of line items). That wasted spend --up to 35 percent by some estimates -- adds thousands each month to your bill that could be better spent elsewhere. What policies and processes, if any, do you have in place to prevent these kinds of wasteful practices? How often do you review your environment to ensure it is optimized?

Tip 4: Tag your resources appropriately

Resource tagging is a huge key to successfully managing your AWS environment. Tags are essentially metadata that help you quickly see where your resources are being allocated. It’s much easier to see who’s using what when your resources are tagged appropriately. You’ll need to choose the structure that makes the most sense for your business, but tagging by department, project or access control are just a few examples. AWS has a very helpful blog post for more information on resource tagging.

Tip 5: Optimize your environment

Once you’ve gained an understanding of where your money is currently going, it may be appropriate to re-architect your environment. Keep your approach flexible. What works well one month (or quarter) may not work as well the next. It all depends on your business and how you typically manage customer peaks and lows.

Successfully managing your AWS environment isn’t easy, which is why nearly everyone is searching for the magic formula. By following the above tips, you’ll be well on your way to discovering the secret to success.

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