How to Reduce AWS Costs: Detailed Overview

  • 03 Oct 2023
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How to Reduce AWS Costs: Detailed Overview

Amazon Web Services (AWS), a comprehensive cloud computing platform for businesses, provides a variety of services to efficiently manage large-scale data infrastructure. Given its broad service offerings, there are many ways to take a flexible approach to cost optimization. Still, some users face challenges in controlling their AWS expenses due to various factors. They may seem difficult to control when looking for ways to reduce AWS operating costs. It requires constant monitoring, analysis, and tracking of workloads, instances, performance, and expense. This article will provide insights and strategies to help you reduce your AWS expenses. By using AWS, businesses can reduce their AWS bills, increase performance, and handle capacity requirements efficiently. Users can refine their financial structure through the diverse pricing and billing models offered by AWS. Although AWS is widely used, many organizations find it challenging to optimize costs, this is where AWS cloud consulting services come in handy.

The purpose of this article is to detail the process of formulating a strategy and making informed decisions regarding AWS costs. A basic understanding of how AWS pricing models operate is essential to effectively achieving cost reductions.

AWS Cost Reduction: When to Consider It

In 2019, an estimated $14.1 billion was wasted on unnecessary AWS spending. Prioritizing AWS cost optimization becomes important when your billing exceeds your initial budget by 2-3 times, especially if you are operating under tight financial constraints. Take a deeper look at your current costs using the AWS Cost Management tool to find out if your current expenses have increased. Imagine the possibilities of reallocating those funds to promote and grow the business. Although it may seem difficult to understand the intricacies of AWS pricing, keep reading to understand the basics and get started on the journey toward a more affordable AWS bill.

10 strategies to reduce your AWS expenses

Before taking any measures to reduce costs, it is imperative to uncover the expenses associated with the AWS services you use. AWS Consulting services can be availed to avail cost-free usage within the predefined limits for each service offered under the AWS Free Tier. 

You can check and assess your AWS costs and consumption using AWS Cost Explorer. This tool allows you to track spending and usage at the macro level (for example, AWS accounts, AWS services) or at a granular level by individual resources (for example, EC2 instance IDs). Employ the "Monthly Cost by Linked Account report" to pinpoint the primary accounts that track expenses. Use the "Monthly Cost by Service Report" to identify the services that are the main contributors to the cost of each of these accounts. Filter and identify key resources being spent by leveraging hourly and resource-specific details.

Here are some ways to reduce AWS costs using AWS tools:

  • Disable unused EC2 instances:- If you have any inactive EC2 instances, consider shutting them down. Remember that stopping just one instance will not cut EBS costs; you need to eliminate this to prevent both EC2 and EBS expenses. This also applies to other instance types like Elastic Cache.
  • Customize instance and volume size:- To make cost-effective decisions in this regard, analyze your metrics, focusing on at least one month's data, taking into account seasonal variations. Note that EBS volumes cannot be resized directly; you will need to create new volumes of appropriate size and migrate the data.
  • Use private IP:- To prevent inter-region data transfer charges, avoid using public IPs within the AWS EC2 network, even if your instances are in the same Availability Zone. This caution also applies to elastic IP addresses and elastic load balancers.
  • Delete snapshots and inactive EBS volumes:- Identify EBS volumes with minimal activity (less than 1 IOPS per day) over a seven-day period by using Trusted Advisor's Low Utilization Amazon EBS Volume Check. After taking the snapshot (for possible future use), delete these volumes. Amazon Data Lifecycle Manager can automate snapshot creation.
  • Create a strategy for AWS cost savings:- If your business's resource needs are stable, consider making a one- or three-year commitment to EC2 and Fargate instances. This commitment will result in a significant discount of 30% or more for agreed usage, with any additional usage billed on a regular basis.
  • Deploy Reserved Instances (RIs) to reduce expenses for RDS, Redshift, ElastiCache, and Elasticsearch:- The AWS Cost Explorer RI tool provides purchasing recommendations tailored to your use of RDS, Redshift, ElastiCache, and Elasticsearch. You can customize RI parameters for a one-year commitment with no upfront costs, typically reaching a cost-neutral point between seven and nine months.
  • Get a reserved EC2 instance through AWS Marketplace:- Use the AWS Marketplace to get reserved instances, which can potentially cut costs even more. Although this option offers increased savings, it may present challenges in finding an instance with the desired type, availability zone, and remaining reserve period. Fortunately, the flexibility to adjust the availability zone after purchase provides more options.
  • Harness Amazon EC2 Spot Example for EC2 Cost Optimization:- Leverage spot instances within EC2 to reduce costs by up to 90%, especially when running fault-tolerant workloads. Examples of such workloads include big data processing, containerized applications, CI/CD pipelines, web servers, and high-performance computing (HPC) tasks. Employ EC2 Auto Scaling to seamlessly launch both spot and on-demand instances to meet your desired capacity, even in scenarios where spot instances might be disrupted.
  • Implement AWS Autoscaling effectively:- Optimize your spend by configuring auto scaling for instances that remain under-utilized for significant periods. By setting up automatic triggers, you can efficiently manage instance starts and stops both vertically and horizontally. Autoscaling provides versatile scaling options, making it compatible with applications that use spot instances.
  • Strategically choose AWS availability zones and regions:- Keep in mind that AWS costs may vary depending on the region in which your resources are deployed. Additionally, keep in mind that data transfer between availability zones incurs additional charges. To reduce data transfer costs on AWS, streamline your operations and consider using a Single Availability Zone when possible.


Frequent monitoring and regular check-ins are integral aspects of achieving cost savings in an AWS environment. Furthermore, it is essential to recognize that cost optimization is a complex undertaking that requires patience, in-depth knowledge and expertise. If you have any questions, please feel free to contact Goognu. We specialize in DevOps, infrastructure, and architectural design and infrastructure migration services. We are proud to be a trusted provider of reliable DevOps solutions.

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