Title

AWS re:Invent 2022 - Cloud cost optimization: Only paying for what you need (COP207)

Summary

• The session focused on cloud cost optimization strategies and shared insights from Fidelity's FinOps journey.
• The visibility journey in cloud cost management starts with chaos and matures through awareness, safeguards, governance, and finally optimization.
• Four major methods to optimize cloud costs were discussed: discounts (reservations, savings plans, EDPs), deleting unused resources, right-sizing (scaling resources dynamically), and suspending non-production workloads during off-hours.
• A poll was conducted to understand which optimization methods the audience's organizations have used.
• Discounts are the most popular optimization method because they do not require deep architectural changes or discussions.
• The potential cumulative savings from using all optimization methods can be substantial, potentially up to 65%.
• Compute Optimizer is an AWS product that helps with right-sizing by providing recommendations based on resource utilization.
• Compute Optimizer now supports memory metrics from external sources, which can lead to more accurate and valuable recommendations.
• Noel from Fidelity shared their FinOps journey, emphasizing cost transparency, financial controls, purchasing strategies, and optimization.
• Fidelity's approach to FinOps includes setting KPIs for reservation coverage, spot usage, and unit discount, evolving these KPIs over time to focus more on optimization.
• The culture of accountability is crucial for cloud cost optimization, and Fidelity's FinOps practice has been instrumental in driving this culture change.

Insights

• Cloud cost optimization is a journey that requires a clear understanding of goals, strategies, and the alignment of cloud technology with business needs.
• Organizations can achieve significant cost savings by adopting a multi-faceted approach to cloud cost management, including discounts, right-sizing, suspending, and deleting resources.
• The use of AWS Compute Optimizer can lead to substantial cost savings by providing recommendations for right-sizing instances based on actual usage data.
• The integration of memory metrics from external sources into Compute Optimizer can unlock additional savings and provide more accurate recommendations.
• Fidelity's FinOps journey highlights the importance of setting clear KPIs, evolving optimization strategies over time, and fostering a culture of accountability to ensure cost-effective cloud adoption.
• The session emphasized the importance of incremental and smaller purchases of reservations and savings plans to maintain flexibility and avoid large-scale repurchasing at the end of contract periods.
• The narrative from Fidelity demonstrates that a centralized FinOps practice with a hub-and-spoke model can effectively drive cost optimization across different business units within an organization.
• The cultural shift from fixed provisioning and cost in data centers to a flexible and elastic cloud environment is a significant change that organizations must navigate to optimize cloud costs effectively.