Title

AWS re:Invent 2022 - Put your cloud cost on track (ARC209)

Summary

• Speakers: Raven (Principal Technologist, Sydney) and Ben (Cost Optimization Pillar Lead, Melbourne).
• Focus: Cost optimization, managing spend, and gaining visibility of costs on AWS.
• Tools: Emphasis on free tools unless stated otherwise.
• Customer Challenges: Balancing cost efficiency with team productivity, managing costs, gaining visibility, reducing bills, right-sizing without impacting performance, and explaining cost spikes to financial teams.
• Agenda: Discuss cost optimization design principles and best practices from the well-architected framework, strategies for cost reduction, tool demonstrations, and takeaways for starting the cost optimization journey.
• Well-Architected Framework: Six pillars including the newly added sustainability, security, performance, reliability, cost optimization, and operational excellence.
• Cost Optimization Pillar: Five design principles - implement cloud financial management, analyze and attribute costs, adopt a consumption model, stop spending on undifferentiated heavy lifting, and measure overall workload efficiency.
• Best Practices Sections:
  1. Expenditure and usage awareness: Detailed billing reports, decommissioning unused resources, governance, and tagging for organizational insights.
  2. Choosing cost-effective resources: Embedding cost into the design phase, selecting the right pricing model, managing data transfer costs, and using AWS Compute Optimizer for right-sizing.
  3. Managing demand and supply of resources: Utilizing cloud elasticity, auto-scaling, and scheduling, and identifying low-hanging fruits for immediate cost reduction.
  4. Practicing cloud financial management: Establishing a dedicated team, partnerships between technology and finance, setting budgets and forecasts, and continuous education.
• Tools and Services: Cost Explorer, AWS Budgets, Cost Anomaly Detection, Compute Optimizer, Reserved Instances, Saving Plans, Spot Instances, EC2 Instance Scheduler, Trusted Advisor, S3 Intelligent Tiering, EFS Lifecycle Management, AWS Application Cost Profiler, and Tag Editor.
• Takeaways: Leverage the well-architected framework, focus on the five areas of cost optimization, and utilize AWS tools and services for cost management.

Insights

• Visibility is Key: Repeated emphasis on the importance of visibility into costs for effective management and reduction strategies.
• Tagging Strategy: Critical for gaining granular insights into costs, allowing for filtering by cost center, environment, or project.
• Right-Sizing: AWS Compute Optimizer is a significant tool for right-sizing resources, potentially leading to substantial cost savings.
• Spot Instances: Offer up to 90% discount over on-demand prices, suitable for non-critical, interruption-tolerant workloads.
• Managed vs. Self-Managed Services: Encouragement to use managed services to reduce the total cost of ownership by saving time and effort on undifferentiated heavy lifting.
• Low-Hanging Fruits: Simple implementations like EC2 Instance Scheduler can lead to significant cost reductions, especially for non-production workloads.
• Cloud Financial Management (CFM): Establishing a dedicated CFM function is crucial for ongoing cost optimization and should involve a partnership between technology and finance.
• Cost Categories and Application Cost Profiler: These tools provide advanced capabilities for grouping costs meaningfully and tracking tenant-based resource consumption, which is particularly useful for shared resources or multi-tenant applications.
• Continuous Education: Staying updated with AWS announcements can lead to cost optimization opportunities and performance improvements.
• Executive Sponsorship: Essential for establishing a cost-effective cloud consumption culture within an organization.