Why Worry About Public Cloud and AWS Cost Optimization?

Cost optimization is a hot topic because of the enormous opportunities for the average user to reduce AWS costs. CloudCheckr surveyed 400 of its users and found that the average potential saving exceeded 40%!

The results should not have been surprising.

Cloud cost sprawl is not a secret. CloudCheckr  and other solution providers are constantly shouting: “We can improve your ROI!”  Respected journalists such as Barb Darrow at GigaOm, Beth Pariseau of SearchCloudComputing.com, and Charles Babcock at InformationWeek all provide consistent high-quality coverage of the issue.

Why are AWS costs difficult to manage?

The results reflected a simple reality: the dynamic nature of the cloud combined with unlimited resource availability and complex pricing makes cost management very difficult. Broken out, the 4 largest contributing factors to the problem are:

• Resource choices: AWS offers 30+ services. Resource and price combinations number in the millions.
• Purchasing options: Identical resources can have dramatically different pricing depending upon purchasing method.
• Decentralized control: Resource control is fragmented and decentralized -any user with a credit card can order resources and begin incurring costs.
• Unfamiliarity: Metering and being charged by the hour is new. Users are not accustomed to diligently sizing resource and turning unused resources off. In data centers, these issues did not arise.

All of this adds up to cost optimization, control and sprawl issues.

What should I do?

First, do not ignore the problem. To repeat: CloudCheckr found that the average user could save over 40%! Over 96% of users suffered from at least one major cost exception. The survey showed that users consistently over provision and sub optimally purchase.
As the CloudCheckr survey and the stream of articles make clear:  with proper cost optimization, AWS users can reduce their costs without sacrificing functionality.

How?

Optimizing costs is not technically difficult. It does, however, require diligence. Users should follow these 5 steps to optimize costs:

1. Utilization levels need to be checked.
2. Resources need to properly sized.
3. Purchasing decisions and methods need to be evaluated. 
4. Costs need to be allocated.
5. Deployment changes need to be tracked.

To realize potential savings, users need to continually and diligently repeat these 5 steps.
For all but the smallest users, automated solutions are the logical choice. Typical users cannot afford to spend valuable man hours tracking, calculating, and comparing. CloudCheckr performs these tasks to save users both time and money.

Conclusion

Obviously, each user is different and there are no guarantees that every user will receive a 40% cost reduction. However, just as obviously, we know that the average user is able to slash costs. So, it certainly makes sense to spend 5 minutes, try it free, and see how much you can save!