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Select components of this workload to optimize cost in line with organization priorities

PostedDecember 20, 2024
UpdatedMarch 21, 2025
ByKevin McCaffrey

Evaluating the cost of various components is crucial for achieving financial efficiency while maintaining operational effectiveness. By considering total cost of ownership (TCO) across services like managed services, containers, and open-source software, organizations can align their cloud strategy with budgetary priorities and long-term financial sustainability.

Best Practices

Utilize Managed Services to Reduce Costs

  • Evaluate the workload requirements and identify potential managed services (e.g., Amazon RDS, Amazon S3) that can reduce operational overhead.
  • Leverage AWS Cost Explorer to analyze historical spending and forecast future usage with managed services, helping align with budgets.
  • Implement auto-scaling for managed services to ensure that you only pay for what you use based on demand.

Optimize Resource Selection

  • Analyze the total cost of ownership (TCO) for different services, considering factors like on-demand vs reserved instance pricing for Amazon EC2.
  • Implement instance right-sizing based on utilization metrics to avoid over-provisioning and unnecessary costs.
  • Use Amazon CloudWatch or AWS Trusted Advisor for monitoring usage and receiving optimization recommendations.

Incorporate Open Source Solutions

  • Identify opportunities to use open-source software that is compatible with AWS services to avoid licensing fees.
  • Evaluate offerings like Amazon EKS for running Kubernetes workloads without extensive licensing costs while still leveraging powerful orchestration.
  • Ensure that the chosen open-source solutions are well-supported and maintainable to avoid hidden costs in the future.

Implement Cost Monitoring and Alerts

  • Set up AWS Budgets to closely monitor costs and receive alerts when spending approaches budget limits.
  • Use AWS Cost Anomaly Detection to identify unusual spending patterns and take corrective actions immediately.
  • Regularly review billing dashboards to track cost allocation across different services and teams, ensuring accountability.

Questions to ask your team

  • Have you assessed the total cost of ownership for the selected services, including both direct and indirect costs?
  • Are you regularly reviewing your service usage to identify and eliminate underutilized resources?
  • Have you evaluated whether managed services can replace self-managed solutions for better cost efficiency?
  • Are you using pricing calculators and cost estimation tools provided by AWS to forecast expenses accurately?
  • Have you considered the potential for cost savings by switching to serverless architectures or on-demand services?
  • Are you monitoring your spending and usage trends to ensure alignment with your budget and project requirements?

Who should be doing this?

Cloud Architect

  • Evaluate and select AWS services that align with cost optimization goals.
  • Analyze the total cost of ownership for various service combinations and architectures.
  • Incorporate managed services and serverless architectures to reduce administrative overhead and optimize costs.
  • Monitor and assess utilization of resources to identify potential cost-saving opportunities.

Financial Analyst

  • Provide insights into budget constraints and financial priorities for cloud workloads.
  • Assist in identifying and forecasting costs associated with different AWS services.
  • Analyze costs associated with licensing and recommend open-source alternatives where feasible.

DevOps Engineer

  • Implement cost-optimized infrastructure configurations and maintenance practices.
  • Automate resource provisioning and scalability to minimize idle resources.
  • Monitor application performance and costs to ensure adherence to budget and organizational priorities.

Project Manager

  • Ensure that cost optimization is considered throughout the project lifecycle.
  • Facilitate communication between stakeholders regarding financial impacts of architectural decisions.
  • Align project objectives with organizational cost management strategies.

What evidence shows this is happening in your organization?

  • Cost Optimization Strategy Template: A structured template to help organizations assess and document their approach to optimizing costs while selecting AWS services, including managed services, serverless, and containers. This template guides teams in aligning service selection with organizational priorities.
  • AWS Cost Evaluation Checklist: A comprehensive checklist for evaluating the cost implications of various AWS services chosen for workloads. It includes factors to consider such as licensing costs, operational overhead, and the benefits of managed services versus traditional options.
  • Cost Optimization Report: A report format that helps teams analyze and document the cost evaluation findings for selected AWS services. This report includes cost comparisons, justifications for selected components, and alignment with organizational cost priorities.
  • Service Selection Decision Matrix: A decision-making matrix that helps teams visualize the trade-offs between different AWS services based on cost, performance, and operational overhead. This matrix aids in aligning service selections with cost optimization goals.
  • Cost Efficiency Playbook: A playbook that outlines best practices and guidelines for achieving cost efficiency in AWS workloads. It includes examples of how to choose components strategically to minimize costs while meeting operational needs.

Cloud Services

AWS

  • AWS Cost Explorer: Allows you to analyze your spending patterns and optimize costs based on resource usage and historical billing.
  • AWS Savings Plans: Flexible pricing model that provides savings on your AWS usage in exchange for a commitment to a consistent amount of usage.
  • AWS Trusted Advisor: Provides best practices recommendations for improving your AWS account’s performance, security, and cost-effectiveness.

Azure

Google Cloud Platform

Question: How do you evaluate cost when you select services?
Pillar: Cost Optimization (Code: COST)

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