Title

AWS re:Invent 2023 - Saving on AWS? If not, what are you waiting for? (COP218)

Summary

• Rahul Subramaniam, CEO of CloudFix and CTO for a group managing 40,000 AWS accounts, shares insights on AWS cost optimization.
• Three main topics covered: shocking usage statistics, struggles of FinOps organizations, and effective strategies for realizing savings.
• EC2 instances have an average utilization of just 6%, with dev and staging environments contributing to waste.
• Over 90% of S3 objects are accessed only once, leading to unnecessary costs at standard access pricing.
• Default networking configurations can be 300% more expensive than optimized setups.
• RDS instances are often self-managed, leading to higher costs compared to serverless options.
• Strategies for cost optimization include EC2 modernization, retyping, right-sizing, intelligent tiering for S3 and EFS, and using GP3 volumes.
• Networking optimizations include addressing idle resources, using VPC endpoints, and avoiding unnecessary provisioned IOPS.
• Financial engineering through AWS savings plans and reserved instances can offer significant discounts.
• Implementation challenges include lack of leadership prioritization, absence of FinOps culture, and stakeholder buy-in.
• Solutions include creative chargeback mechanisms, enabling teams with automation, and continuous process repetition.
• CloudFix is introduced as a tool that automates many of the recommended optimizations.

Insights

• EC2 Utilization and Waste: The low average utilization of EC2 instances, particularly in dev and staging environments, indicates a significant opportunity for cost savings through right-sizing and scheduling.
• S3 Object Access Patterns: The statistic that over 90% of S3 objects are accessed only once suggests that many users are overpaying for storage and could benefit from lifecycle policies and intelligent tiering.
• Networking Costs: The insight that default networking configurations can be costly emphasizes the importance of understanding AWS networking and implementing best practices to avoid unnecessary charges.
• Database Management: The high percentage of self-managed RDS instances points to a lack of awareness or hesitation to adopt serverless database solutions, which can offer cost and management benefits.
• Cost Optimization Strategies: The detailed strategies for EC2, S3, EFS, and networking optimization highlight the complexity of AWS cost management and the need for specialized knowledge or tools to effectively reduce costs.
• Financial Engineering: The discussion on AWS savings plans and reserved instances underscores the importance of financial planning and commitment to long-term cost savings.
• Implementation Challenges: The common challenges faced by FinOps teams, such as lack of prioritization and culture, reflect broader organizational issues that can impede cost optimization efforts.
• Chargeback Mechanism: The innovative approach to chargeback by taxing unwanted behavior and subsidizing desired behavior is a strategic way to drive cost-conscious behavior and build a FinOps culture.
• Automation and Tools: The emphasis on automation and low-friction tools for developers to implement cost savings highlights the need for solutions that are easy to adopt and trusted not to disrupt operations.
• Continuous Improvement: The necessity of repeating the cost optimization process and staying updated with AWS innovations indicates that cost management is an ongoing effort requiring constant attention.