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Perform pricing model analysis

Optimizing cloud costs requires a thoughtful approach to selecting the right pricing models for your specific resources. This entails analyzing workload components to determine the most advantageous pricing, whether through commitment discounts or dynamic options like Spot and On-Demand instances.

Best Practices

  • Analyze Workload Requirements: Review your application’s resource requirements and usage patterns. Determine if long-term commitment through Reserved Instances or Savings Plans is beneficial, or if transient demand could be met effectively with Spot Instances. Regularly evaluate this as workloads and pricing options evolve.
  • Utilize Cost Management Tools: Leverage AWS Cost Explorer or AWS Budgets to gain insights into spending patterns. Establish alerts for anomalies in spending and create detailed reports to surface savings opportunities based on trends and historical data.

Supporting Questions

  • Are you regularly reviewing pricing models to ensure they still align with your workload needs?

Roles and Responsibilities

  • Cloud Financial Analyst: This role is responsible for analyzing financial data related to cloud services, identifying cost optimization strategies, and providing recommendations on pricing models based on usage trends.

Artifacts

  • AWS Cost Explorer: A tool that provides a visual interface to understand your AWS spending and usage patterns over time, enabling informed decisions regarding pricing models.
  • AWS Budgets: A service that allows you to set custom cost and usage budgets and alerts you when you exceed them, ensuring you stay on track with your overall cost optimization strategy.

Cloud Services

AWS

  • AWS Pricing Calculator: This service helps estimate the cost of AWS services based on your anticipated usage patterns, enabling better planning and optimization of price models.
  • Amazon EC2 Spot Instances: Allows you to take advantage of unused EC2 capacity at discounts, providing a cost-effective option for workloads that are flexible in timing.
  • AWS Savings Plans: A flexible pricing model that provides significant savings on your AWS usage in exchange for a commitment to a specific amount of usage for a one- or three-year term.

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

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