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Implement pricing models for all components of this workload

Utilizing the appropriate pricing models for your resources is fundamental to reducing costs in AWS. Selecting a mix of Reserved Instances, Savings Plans, Spot Instances, and On-Demand Instances allows for a tailored approach to minimize expenses while ensuring resource availability according to workload demands.

Best Practices

  • Leverage Reserved Instances and Savings Plans: Utilize Reserved Instances or Savings Plans for resources that run consistently to achieve significant cost savings. This approach guarantees capacity while reducing costs. Regularly evaluate your resource usage to ensure that your reserved capacity aligns with your current requirements.
  • Employ Spot Instances for Flexibility: Use Spot Instances for workloads that are flexible and can be interrupted. They offer lower pricing compared to On-Demand Instances, resulting in substantial savings. Spot Fleets can help manage and allocate these instances effectively.
  • Limit On-Demand Instances to Critical Loads: Reserve On-Demand Instances for workloads that cannot tolerate interruptions and have unpredictable usage. This strategic limitation on On-Demand utilization helps manage costs while maintaining the necessary elasticity for critical applications.

Supporting Questions

  • Have you assessed the cost-benefit analysis of your current pricing model against your workloads?

Roles and Responsibilities

  • Cloud Architect: Responsible for designing the architecture that aligns with cost optimization strategies, ensuring that the pricing models are appropriately applied across the workload.
  • DevOps Engineer: Responsible for implementing and managing the resource allocation and scaling strategies, continually evaluating the effectiveness of different pricing models.

Artifacts

  • Cost Management Dashboard: A visualization tool that provides insights into cost trends, enabling teams to monitor and analyze expenses associated with different pricing models in real time.

Cloud Services

AWS

  • Amazon EC2: Provides a variety of pricing models including On-Demand, Reserved Instances, and Spot Instances, allowing users to optimize costs based on workload characteristics.
  • AWS Pricing Calculator: Helps estimate the cost of AWS services under different pricing models to aid in decision-making for cost optimization strategies.

Question: How do you use pricing models to reduce cost?
Pillar: Cost Optimization (Code: COST)

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