AWS Cost Optimization Overview This guide covers AWS cost management tools, strategies, and best practices for reducing cloud spend while maintaining performance and reliability. Cost optimization is a key topic across all AWS certification exams.
Tool Purpose Access Cost Explorer Visualize and analyze spending AWS Console / API Budgets Set spending alerts and thresholds AWS Console Cost and Usage Report (CUR) Detailed billing data S3 export Compute Optimizer Right-sizing recommendations AWS Console Trusted Advisor Cost, security, and performance checks AWS Console Savings Plans Flexible commitment pricing AWS Console Reserved Instances Fixed commitment pricing AWS Console Cost Anomaly Detection ML-based spending anomaly alerts AWS Console Billing Conductor Custom billing and pricing AWS Console
Compute Cost Optimization EC2 Pricing Models Model Discount Commitment Best For On-Demand 0% None Unpredictable, short-term workloads Savings Plans (Compute) Up to 66% 1 or 3 year Flexible compute (EC2, Fargate, Lambda) Savings Plans (EC2 Instance) Up to 72% 1 or 3 year Specific instance family in a region Reserved Instances Up to 72% 1 or 3 year Steady-state workloads Spot Instances Up to 90% None (can be interrupted) Fault-tolerant, flexible workloads Dedicated Hosts Varies On-demand or reserved Licensing, compliance
Right-Sizing Strategies Strategy Tool Action CPU/Memory analysis Compute Optimizer Resize to recommended instance type Utilization monitoring CloudWatch metrics Identify under-utilized instances Generation upgrade Trusted Advisor Move to latest instance generation (e.g., m5 to m7i) ARM migration Compute Optimizer Move to Graviton for 20-40% savings Auto-scaling Auto Scaling Groups Scale based on demand
Serverless Cost Optimization Strategy Service Impact Right-size memory Lambda Smaller memory = lower cost (use Power Tuning) Optimize duration Lambda Faster execution = lower cost Use Provisioned Concurrency wisely Lambda Only for latency-sensitive paths Fargate Spot ECS/EKS Up to 70% savings for fault-tolerant tasks Container right-sizing ECS/EKS Match CPU/memory to actual usage
Storage Cost Optimization S3 Storage Classes Class Use Case Cost (per GB/month, us-east-1) S3 Standard Frequently accessed ~$0.023 S3 Intelligent-Tiering Unknown access patterns ~$0.023 + monitoring fee S3 Standard-IA Infrequent access (30+ days) ~$0.0125 S3 One Zone-IA Non-critical infrequent access ~$0.01 S3 Glacier Instant Retrieval Archive with instant access ~$0.004 S3 Glacier Flexible Retrieval Archive (minutes to hours) ~$0.0036 S3 Glacier Deep Archive Long-term archive (12+ hours) ~$0.00099
Storage Optimization Strategies Strategy Action Savings Lifecycle policies Transition to cheaper classes 50-90% Intelligent-Tiering Auto-tier based on access 20-40% Delete unused snapshots Clean up old EBS snapshots Variable gp3 over gp2 Migrate EBS volumes 20% EFS Infrequent Access Lifecycle for EFS 85% for IA files
Database Cost Optimization Strategy Service Action Reserved Instances RDS, ElastiCache, Redshift 1 or 3 year commitments Aurora Serverless v2 Aurora Scale to zero for dev/test Read replicas RDS/Aurora Offload reads, smaller primary DynamoDB On-Demand DynamoDB For unpredictable workloads DynamoDB Reserved DynamoDB For steady-state workloads Graviton instances RDS 10-20% lower cost, better performance
Network Cost Optimization Strategy Description Savings VPC endpoints Avoid NAT Gateway data charges ~$0.045/GB saved CloudFront Cache at edge, reduce origin traffic 20-60% egress savings Same-AZ traffic Keep resources in same AZ when possible $0.01/GB saved S3 Transfer Acceleration Only when needed (not always) Avoid unnecessary charges PrivateLink Private connectivity without NAT Avoid internet egress Compress data Reduce data transfer volume Proportional to compression ratio
Organization-Level Optimization Strategy Description Consolidated Billing Aggregate usage for volume discounts Savings Plans sharing Share across accounts in Organizations RI sharing Share Reserved Instances across accounts Tagging strategy Tag all resources for cost allocation Budget alerts Set budgets per account/team/project CUR analysis Detailed billing analysis with Athena/QuickSight
Cost Optimization Checklist Documentation Links AWS Cost Management: https://docs.aws.amazon.com/cost-management/ AWS Compute Optimizer: https://docs.aws.amazon.com/compute-optimizer/ AWS Savings Plans: https://docs.aws.amazon.com/savingsplans/ AWS Pricing Calculator: https://calculator.aws/ AWS Cost Optimization Pillar: https://docs.aws.amazon.com/wellarchitected/latest/cost-optimization-pillar/