Navigating Your Way to Lower Expenses in the Cloud with AWS Cost Optimization

Cloud usage and adoption are rapidly growing, in particular among segments like infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS).

As businesses increasingly rely on the cloud, they often face rising costs and increasing complexity and are not aware of cloud cost optimization techniques.

The latest Flexera 2024 State of the Cloud Report states, “There’s a 21% increase YoY in organizations spending $1 million or more per month on cloud.”

Moreover, the expected annual growth spend for the following year confirms the tendency:

Graph showing how much organizations are planning to spend on cloud next year

Many companies are investing in next-gen tools like generative AI (GenAI) and sustainability, but they still care about keeping cloud costs down. It’s tough to balance both things at once.

Considerable expenditures are still being spent on cloud services, with almost half of all workloads and data now stored in the public cloud. Controlling cloud costs has become a top problem along with security. This shows that organizations are focused on finding ways to manage cloud expenses better and make things run more efficiently.

When asked about challenges and initiatives, the answer from executives and IT strategy stakeholders is well-defined: cloud costs and savings come in the first place:

Graph showing the main initiatives on cloud that companies plan to make progress on

Save on AWS: start by being Well-Architected

AWS Cost Optimization is one of the 6 pillars that lays the foundation of the AWS Well-Architected Framework, which describes key concepts, design principles, and architectural best practices for designing and running workloads on AWS cloud.

The process of performing a full Well-Architected Framework Review is based on answering foundational questions and using key findings from available tools on AWS.

This review will immediately show how well your architecture aligns with cloud best practices and offer guidance for making improvements.

The AWS cost optimization pillar focuses on avoiding unnecessary costs. Key topics include understanding spending over time and controlling fund allocation, selecting resources of the right type and quantity, and scaling to meet business needs without overspending.

10 Tips for optimizing your cloud expenses on AWS

  • Take charge of your cloud expenses by being proactive instead of reacting after the fact. It’s natural for spending to go up, but you can prevent paying for things you don’t need.
  • Start by getting a better understanding of how you’re currently using AWS so you can predict how your usage and costs will grow over time.
  • Stay ahead of unexpected cost spikes and go over your budget by regularly keeping track of and analyzing your expenses.
  • Watch closely how you use your resources to catch any inefficiencies early and make quick adjustments to make sure you’re getting the most out of every dollar spent.
  • Analyze past data and trends to build a model that helps you estimate your future costs, considering things like how your workload will expand and the resources you’ll need.
  • Use powerful tools like CloudHealth for detailed monitoring and visual reports, which provide a clear view of how your spending is trending and help you make smarter, more cost-effective decisions.
  • Keep control over your cloud expenses by turning any potential problems into opportunities to optimize.
  • When planning for future workloads, use tools like the AWS Pricing Calculator to get quick estimates of costs and think about more than just the costs of running resources. This includes issues like potential data transfer fees and backup costs that might come up. While it might be hard to get exact numbers, having a rough idea and being ready for cost changes based on how you use your workload can help you make more accurate predictions.
  • When you create new resources, set up tagging rules right away. This ensures that all new workloads get tagged correctly from the beginning. Tags make it simpler to track and report costs, whether it’s across different departments, projects, or applications.
  • Use AWS alerts and notifications to keep an eye on your spending. AWS has features that let you set up alerts for specific cost limits. This means you’ll get notified if your spending goes over those limits, so you can spot any sudden increases in costs and deal with them before they become a bigger issue.

PurpleBox: Your Partner for Cost Optimization

  • Businesses must manage their AWS cloud costs effectively to make the most of their investments and keep growing profitably. Predicting cloud expenses accurately, adjusting resources to the right size, analyzing cost increases, and controlling transfer costs are some ways businesses can gain better control over their AWS spending.However, dealing with the complexities of cost management can be tough, especially as businesses grow and manage multiple AWS accounts. As an AWS Services Partner, PurpleBox has extensive knowledge of cloud services, the best ways to optimize costs, and access to advanced tools and resources. Our experienced team of cloud advisors can help with cost monitoring, optimizing resources, negotiating agreements, and getting the most value out of the cloud.Our AWS cost optimization design principles include:
    • Practice cloud financial management (CFM)
    • Adopt a consumption model
    • Measure overall efficiency
    • Stop spending money on undifferentiated heavy lifting
    • Analyze and attribute expenditure
    • Involvement from many teams on your organization
    • Accurate information
    • Actionable intelligence
    • Easy access and self-serve

Take the next step towards optimizing costs and make sure your cloud expenses match your business goals. Get in touch with a PurpleBox advisor to unleash the full potential of your cloud infrastructure and achieve optimal cost management.