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The 5 Best Ways To Reduce AWS Instance Cost

There are a number of different ways to reduce AWS instance cost, but not all are truly cost-effective. We discuss the five best ways to reduce AWS instance cost and suggest a solution for your business to achieve and maintain an AWS cost reduction quickly and easily.

There is a lot of misinformation about how much money is wasted on cloud services due to the way in which statistics are compiled. For example, one company predicted businesses worldwide are wasting $10 billion annually on cloud services based on the optimization assessments of just sixty customers. Due to the company´s high profile, the guesstimate was widely reported as being an accurate statistic.

The truth is nobody knows with any degree of certainty how much businesses are wasting on cloud services. There is no doubt millions of dollars can be shaved from cloud bills, but we suspect most businesses are wiser than the sixty customers used as the basis for the $10 billion prediction. What most businesses may not be aware of, however, is the five best ways to reduce AWS instance cost.


You might imagine that any method used to reduce AWS instance cost is worthwhile, but not all are truly cost-effective. Some cost-cutting exercises can negatively affect performance, while others may leave gaps in network security. Under-performing assets will likely result in a reduction of revenue, while the unnecessary exposure to security threats can cost more money that could possibly be saved.

Although we have compiled the five best ways to reduce AWS instance cost, these apply equally whether you use AWS, Azure, Google Cloud, or any combination of cloud service providers. Similarly, the solution to reduce AWS instance cost suggested below can be used to reduce costs, optimize performance, and enhance security in single cloud, multi-cloud, or hybrid cloud environments.

1. Rightsize over-provisioned instances

It is no secret that developers often add a little “wiggle room” when calculating the configuration of instances, or use configurations that have worked for them in the past regardless of the workloads being deployed. Over-provisioned instances—whether attributable to miscalculation, laziness or a fall in demand—may not cost a lot individually, but cumulatively can add a significant amount to AWS bills.

2. Schedule smart on/off times for non-production instances

Most businesses are aware that non-production instances used in development, testing, demo, and training environments don´t need to be running 24×7 and schedule on/off times for when the workplace is closed (i.e. “on” from 8.00 a.m. to 6.00 p.m. Monday to Friday). Although this schedule can reduce AWS instance cost by more than 70 percent (for non-production instances) further savings can be achieved by scheduling smart “on” times for when access to the instances is actually required.

3. Exercise Reserved Instance best practices

Using Reserved Instances (RIs) is a great way to achieve an AWS cost reduction, but you need to exercise RI best practices in order to obtain the maximum benefit from them. This means fully utilizing purchased RIs, identifying when savings can be made by transferring On Demand instances to Reserved Instances, and exchanging Convertible RIs when financially advantageous opportunities exist.

4. Terminate unattached EBS volumes

Although strictly speaking a storage cost rather than an instance cost, Elastic Block Storage (EBS) volumes and snapshots do not necessarily delete automatically when an instance is terminated. As you will continue paying for orphaned EBS volumes, even though you are no longer using the instance they were attached to, these should be identified and terminated.

5. Investigate AWS Spot Instances

Using AWS Spot Instances for non-critical workloads is a further way to reduce AWS instance cost. Spot instances don´t necessarily have to be used exclusively for overnight batch processing workloads as is often suggested, as they can also be loaded into one of two Auto-Scaling Groups attached to an Elastic Load Balancer (the second loaded with On Demand instances as a failover) and used to reduce AWS instance cost in many use case scenarios.

A quick and easy AWS cost reduction solution

CloudHealth provides businesses with a quick and easy way to achieve an AWS cost reduction—and maintain it—through consolidation, evaluation, optimization, and automation. Our cloud management platform:

  • Identifies which resources are over-provisioned and makes appropriate rightsizing recommendations.
  • Uses “SmartParking” technology to recommend the most cost-effective schedules for non-production instances.
  • Monitors your RI purchases in order to identify opportunities to reduce AWS instance cost by modifying or exchanging RIs.
  • Alerts you to all zombie assets (unattached EBS volumes, empty Elastic Load Balancers, idle Relational Database Services, etc.).
  • Highlights the opportunities to take advantage of Spot Instances in order to increase performance while reducing costs.

Using these capabilities, CloudHealth customers save an average of 30 – 40 percent in cloud costs every month.

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Related reading:

Lower Your Cloud Bill And Achieve Better Governance

Why Hybrid Cloud Matters—and Why You Can´t Ignore It

3 Ways To Reduce Spend In Your Google Cloud Platform