Here are the primary strategies and mechanisms for achieving discounts and optimizing your AWS spending:
1. Leverage AWS Savings Plans:
- Commitment: You commit to a consistent hourly spend for compute services (EC2, Lambda, Fargate) for 1 or 3 years.
- Savings: You can achieve significant discounts, up to 72% compared to On-Demand rates.
- Flexibility: Compute Savings Plans offer the most flexibility, applying across different instance types, regions, and operating systems within the compute services. EC2 Instance Savings Plans offer deeper discounts but are tied to specific instance families within a region.
2. Utilize AWS Reserved Instances (RIs):
- Commitment: You reserve capacity for EC2 instances for a 1 or 3-year term in a specific Availability Zone.
- Savings: RIs can provide discounts of up to 75% compared to On-Demand pricing.
- Types: Standard RIs offer the deepest discounts with less flexibility, while Convertible RIs allow you to change instance attributes during the term for a smaller discount.
3. Explore the AWS Enterprise Discount Program (EDP):
- For Large Enterprises: This program is designed for customers with a substantial and long-term commitment to AWS (typically $1 million or more in annual spending).
- Tailored Discounts: EDP offers customized discounts on your overall AWS bill based on your spending level and commitment duration (1-5 years).
4. Take Advantage of AWS Promotional Credits:
- AWS Programs: AWS offers credits through various programs like AWS Activate for startups, AWS for Nonprofits, AWS Educate, and for specific events or research projects.
- Application: These credits are applied to your AWS account to offset eligible service charges. Keep in mind they usually have an expiration date and may not apply to all services.
5. Employ Spot Instances for Flexible Workloads:
- Unused Capacity: Spot Instances allow you to bid on spare EC2 capacity at significantly reduced prices (up to 90% off On-Demand).
- Interruption Risk: These instances can be terminated with little notice if the Spot price exceeds your bid or if capacity becomes scarce. Suitable for fault-tolerant applications.
6. Implement Cost Optimization Best Practices:
- Right Sizing: Ensure your AWS resources (EC2 instances, databases, etc.) are appropriately sized for your actual workload. Use tools like AWS Compute Optimizer for recommendations.
- Elasticity: Leverage Auto Scaling to automatically scale your resources up or down based on demand, avoiding paying for idle capacity.
- Stop Idle Resources: Turn off resources that are not in use, such as development or testing environments outside of business hours. AWS Instance Scheduler can automate this.
- Choose the Right AWS Region: Prices for AWS services can vary between regions. Select the most cost-effective region that meets your latency and compliance requirements.
- Optimize Storage Costs: Use appropriate Amazon S3 storage tiers (e.g., Intelligent-Tiering) and implement lifecycle policies to manage data costs effectively.
- Minimize Data Transfer Costs: Be mindful of data transfer, especially data going out of AWS regions, as it can be expensive. Consider using services like AWS CloudFront for caching.
- Consolidated Billing: For organizations with multiple AWS accounts, consolidate billing can help you take advantage of volume discounts across all accounts.
- Tagging and Cost Allocation: Implement a comprehensive tagging strategy to track your AWS costs by department, project, or environment. Use AWS Cost Explorer and AWS Budgets to analyze and monitor your spending.
By implementing a combination of these strategies, you can significantly reduce your overall AWS bill. Regularly reviewing your usage patterns and exploring the various cost optimization tools and pricing models offered by AWS is key to continuous cost management.