How to optimize your AWS costs?

| back4app blog 8/5/19, 11(17 PM

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How to optimize your AWS costs? 10 ways

to reduce your AWS bill
LEARN (HTTPS://BLOG.BACK4APP.COM/CATEGORY/LEARN/)

Back4App is a heavy Amazon Web Services user and we run most of our infrastructure on this
cloud provider. We will show you how we delivered $500,000 in yearly Amazon Web Services
savings. Software development companies, startups, and enterprises can benefit from this ar-
ticle because:

It provides effective and proved ways to reduce AWS spending;

We show how to have short-term and low hanging fruit gains;
Most of the procedures are simple and demand only planning and hard work.

The actions described in this article are based on our own experience managing cloud in-
frastructure and translated in successful cost reductions. Here is a brief checklist of what you
will find reading this report.

https://blog.back4app.com/2019/06/24/optimize-aws-costs/ Page 1 of 6
How to optimize your AWS costs? | back4app blog 8/5/19, 11(17 PM

EC2 – Reduce instance sizes

EC2 – Optimize idle resources with auto-scaling
EC2 – Reserve instances on the Marketplace
EC2 – Standard instances are cheaper than Convertible instances
EC2 – Try Spot Instances
EC2 – Upgrade to new generation instances
EC2 – Enable enhanced network for maximum performance
EC2 – Cost varies by region. North Virginia is the cheapest option
EBS – Terminate Instances instead of stopping it
EBS – Prefer Magnetic storage over SSD
S3 – Choose your S3 storage class
S3 – Place an endpoint in your VPC
S3 – Monitor your S3 requests very closely
S3 – Backup your data here. Avoid EBS for this purpose
Data Transfer – Make sure you are connected to a CDN service
Data Transfer – Moving to CloudFront may save you a lot of money
Data Transfer – Single availability zone will reduce inter-AZ costs
CloudFront – Evaluate a long term Private Contract
Global – Get volume discounts bundling all your accounts
Global – Request credits every time there is an AWS related downtime
Credits – Look for AWS credits every time as you can
Monitoring & Reporting – Have clear cost reduction goals
Monitoring & Reporting – Establish a regular cost-saving routine
Monitoring & Reporting – Tag everything

Our cost reduction actions were monitored using a simple but very effective spreadsheet. You
can download it using with the link below:

Download your AWS Cost Reduction Template Here

(https://back4app.typeform.com/to/CEQh9o)

1. EC2 – Elastic Compute Cloud

The most straightforward savings are obtained optimizing EC2 – Elastic Cloud instances. Usu-
ally, it’s not so hard to have easy and fast gains simply reevaluating instances sizes and shut-
ting down unused ones. Please make you use last generation instance types. They are cheap-
er and have more processing power.

Please download the spreadsheet that will support you in this process.

Download your EC2 Cost Reduction Template Here

(https://back4app.typeform.com/to/CEQh9o)

The next cost-saving step is to have long-term (12 or 36 months) reservations for the in-
stances you run 24/7. You can reserve the instances directly from AWS or purchase them on
AWS Marketplace. If you use Elastic Cache (Redis), you can also reserve nodes.

A more sophisticated action is to implement autoscaling to optimize idle resource utilization.

Pay only when you actually use the instances. To reduce costs even further, use Spot Instances
to scale-up your resources.

2. EBS – Elastic Block Store

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How to optimize your AWS costs? | back4app blog 8/5/19, 11(17 PM

Generally speaking, please make sure you don’t backup data here. Use S3 for it.

Understand if you have the right EBS volume attached to each instance. Each volume must
have an accurate size and the correct type. SSD volumes are twice as expensive as Magnetic
volumes.

3. S3 – Simple Storage Service

Choose the correct storage class for each type of data. For example, S3 Glacier is 5x cheaper
than S3 standard and should be used for data archiving.

Monitor and understand your S3 requests. Bear in mind every time you move data from one
storage class to another, you will incur in S3 API request costs.

Here a very useful tip for high volume accounts. Installing an S3 endpoint in your VPC pro-
vides any traffic to S3 its internal road, and AWS won’t charge you like public transfer.

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partner)

4. Data Transfer (ELB & S3)

Please make sure your endpoints are connected to a CND service. This will save you data
transfer related to the data that could be cached.

AWS has three major data transfer costs that are Transfer Out, Inter-Regions and Inter AZ.
Some ideas below to reduce costs:

Transfer-Out: Move to CloudFront

Inter AZ: Centralize noncritical applications under a single AZ
Inter-Region: Centralize noncritical applications under a single Region

5. CloudFront
Generally speaking, for the same levels of usage, CloudFront is cheaper than ELB data trans-
fer. AWS is much more flexible in providing volume discounts and signing long-term con-
tracts. Depending on your negotiation and volume, CloudFront transfer costs may be re-
duced to $0.02/GB.

6. Global
If you run several AWS accounts, please make sure you link all of them to a root account. This
simple action will give you volume discounts, and the charged will be based on the total us-
age of all accounts.

Let’s consider you have 10 AWS accounts and each account stores 50TB.

If the accounts are not linked, you will be charged as follows:

50TB x $0.023 x 10 = 50 x 1024 GB x $0.023 x 10 = $11,776/month

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How to optimize your AWS costs? | back4app blog 8/5/19, 11(17 PM

If you bundle the accounts, you will be charged as follows

Total Storage: 500TB

50TB x $0.023 = 50 x 1024 GB x $0.023 = $1,177.60/month
450 x $0.022 = 450 x 1024 GB x 0.022 = $10,137.60/month
Total Cost = $11,315.60

So, in the hypothetical scenario, you would save $460.80/mo or $5,529.60/year linking all your
AWS account.

This same logic can be applied to data transfer, CloudFront, etc.

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(https://www.back4app.com/partners/become-a-software-development-
partner)

7. Credits
Most of the gains here are related to Startup credits! AWS has several startup perks, and the
amount of credits can go up to $100,000. Enterprises or software development companies
can always ask for credits to test AWS services, but the amount you will receive will be much
smaller in comparison to the number of credits delivered to Startups.

8. Monitoring & Reporting

You can monitor AWS spending using its own internal tools like Cost Explorer or Cloud
Watch. You can also integrate to external services like Sumo Logic or Dynatrace.

Do you need more detailed information on how to implement AWS savings? If that is the
case, please read the detailed version accessing here.

Reduce AWS Costs (https://medium.com/@george_51059/re-

duce-aws-costs-74ef79f4f348)

So, do you like the results we produced? Has it benefited you to optimize AWS costs?

Should you would like to add to this article, email me at george@back4app.com, and I will be
happy to incorporate your contribution.

Your comments are also welcome!

Are you a development company? Join our Partner Program now!

(https://www.back4app.com/partners/become-a-software-development-
partner)

To read a Portuguese version of this article please use the link below:

Reduzir Custos AWS (https://www.linkedin.com/pulse/como-reduzir-os-custos-da-

aws-george-batschinski/)

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George Batschinski
I’m a entrepreneur, leader and strategist with experience in software and aviation industries. I’m expert to develop new
businesses and start ups.

Comments ( 2 )

July 2, 2019 Reply (https://blog.back4app.com/2019/06/24/optimize-aws-costs/?

replytocom=48708#respond)

OPROL EVORTER (HTTP://WWW.OPROLEVORTER.COM/)

Very interesting information!Perfect just what I was searching for!

July 8, 2019 Reply (https://blog.back4app.com/2019/06/24/optimize-aws-costs/?

replytocom=48951#respond)

INDY (HTTPS://STACKARMOR.COM/STACKARMOR-OPSALERT/)

Hi George, this is a very informative article.Thanks for the cost optimization suggestions. We believe
however most organizations do not have the resources, time or lack simple metrics to detect consumption
efficiency. stackArmor OpsAlert has developed a unique algorithm that detects cloud wastage. stackArmor
OpsAlert provides the Cloud Idle Score and Cloud Idle Cost to quickly detect idling capacity. Looking
forward to your thoughts.

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