Cloudability logo
Registration is Now Open for CloudyCon 2019
Cost Optimization

Your end-of-year AWS cost efficiency checklist

By Andrew Nhem on December 22, 2016
We asked our Customer Success crew for some end-of-the-year AWS cost efficiency tips and tricks that they recommend to their customers to wrap up the year. Get the best practices that we believe help any organization improve their cloud cost efficiency.

We asked our Customer Success crew for some end-of-the-year AWS cost efficiency tips and tricks that they recommend to their customers to wrap up the year. While these might vary in effectiveness since user types and business sizes can vary, they’re based on best practices that we believe help any organization improve their cloud cost efficiency.

We’re heading toward the end of the year and attention spans at the office might be dwindling as vacations and family time approaches. Use this guide as a quick checklist to kick off a bigger process of cloud cost management that can continue into the new year.

Check for expiring Reserved Instances

The end of the year is a great time to check for upcoming expiration dates. There are various types of Reserved Instances that come in one- and three-year terms that help people save on AWS. Note: Not monitoring these expiration dates could lead to a surprise jump in AWS costs if the RIs associated with your EC2 instances, RDS, Redshift, or ElastiCache resources revert back to On-Demand pricing.

Our team recommends looking into the expiration dates of all your Reserved Instances now and addressing ones that might need conversions or renewals during this quarter or early into next year. This requires looking back at purchase histories of your RIs to see if their one- or three-year terms are coming to an end.

Here’s an example report:

From this larger report, keep an eye out for expiring RIs:

ri-expiration-focus

If you’re a Cloudability user, you can quickly generate these types of reports to alert you and other decision makers about imminently expiring RIs.

Report on all RIs purchased over the year

AWS’s pay-as-you-use model increases everyone’s accessibility to the cloud. This means folks can spin up and turn off resources whenever they need to across teams, departments, and projects. This can also cause a bit of complexity when tracking what was purchased over the course of an entire year for larger organizations.

Use the end of the year as a time to start compiling reports such as:

ri-ytd-coverage

This type of reporting can help teammates recognize the increase in Reserved Instance coverage over the course of the current year and can influence RI planning for the new year.

Note: These types of YTD reports can be generated quickly and shared to key decision makers using Cloudability.

Identifying value as well as costs

As our VP of product, Bill Lynch, mentioned during his AWS re:Invent 2016 talk, cost-efficiency businesses aim to get the most value from the resources that they provision. This means accounting for how much RIs cost, but also looking at how much of them were actually utilized. In other words, did people get the most bang for their buck?

These end-of-year reports can shed light on how much you saved on RIs and at what costs, but they can also be an opportunity to discuss how to better utilize RIs for the new year to achieve even more savings.

Create an optimization plan for next year

With the right value-based reports created, it’s time to start discussions with the right decision makers (whether it’s Operations, IT, Engineers, other management) about how to optimize AWS costs in the next year. Our team recommends creating infrastructure change plans based on the RI reports.

For example, could there be small infrastructure adjustments that could help make better use of existing RIs in the first couple of quarters in 2017? Examining AWS cost and usage data alongside RI utilization data can yield key insights that can help improve RI cost efficiency.

For Cloudability users, you can build thorough dashboards to represent this exercise. These dashboards can include YTD instance reports by family that include usage hours and resource counts to compare against RI reports. This is great material to kickoff key discussions about optimization for the new year, as you’ll be able to identify infrastructure and RI waste, while identifying opportunities to reduce it and save on cloud costs.

Our comprehensive eBook, “Mastering the Fundamentals of AWS Cost Efficiency”, covers the process of getting the right AWS cost and usage data to the right people to start the discussions that improve AWS cost efficiency. We invite anyone interested to check it out.

It’s all about building a broader culture of cost management

While this quick checklist is nice at the end of the year, it’s one part of a larger, longer process that should be done frequently. It’s a component of building what we like to call a culture of cost management here at Cloudability.

Getting the right cost and usage data and RI reporting to the right people starts the right discussions, observations, and insights that help organizations spend as efficiently as possible on AWS. It’s all toward getting the most value out of AWS as your business grows. Who doesn’t like that?

For help with creating these key reports, or to see how it can be done with Cloudability, we invite anyone interested to speak with one of our Reserved Instance experts. If you’re more of the D.I.Y.-type, we have a free trial available as well.

Being in the know feels great