Cost Optimization

Companies are today turning out to be more data-driven as their data is the fuel to their
development engine to create new products, outsmart the opposition and give clients’ better
experiences. Cost optimization is a continual process of refinement and improvement over the span
of a workload’s lifecycle. The practices in this paper help you build and operate cost ware workloads
that achieve business outcomes while minimizing costs and allowing your organization to maximize
its return on investment.

Utility Computing

It is a computing model that defines service provisioning techniques for services such as
compute services along with other major services such as storage, infrastructure, etc. Utility
computing allow the user to pay per use means whatever they are using only for that they
have to pay. It is a plug in that needs to be managed by the organizations on deciding what
type of services has to be deployed from the cloud. Utility computing allows the user to
think and implement the services according to them. Most organizations go for hybrid
strategy that combines internal delivered services that are hosted or outsourced services.

Features of Utility Computing-

 On-demand: It will decrease end-to-end preparation time for E-commerce new

services, enhancing gracefulness. Skilled services corporations, particularly those in
business method outsourcing, found this appealing. Pay for compute capacity by the
hour with no long-term commitments or upfront payments.
1. Increase or decrease compute capacity depending on the demands of your
application.
2. Only pay the specified hourly rate for the instances you use.
 Pay as you go: PAYG is a payment method for cloud computing that charges based
on usage. The practice is similar to that of utility bills, using only resources that are
needed.
 Uniform
 Available

Visibility

Visibility has to be one of the key criteria for assessing the compatibility of a cloud
provider for your applications, policies and procedures. Without visibility into your data,
it's hard if not impossible to troubleshoot, to resolve governance issues, and to ensure
that security controls are actually working. Speed, scale, complexity, and value at stake
drives the need for visibility and control.

1. Monthly Invoice
2. Billing Console default billing area where you can see every month charges and also
the projected cost of the month.
3. Cost Explores and budgets this will break out different service costs, instance cost
and family cost. Then can look on optimizing the cost.
4. Third Party tools billing file analysis and dashboards.

The Technical Pillars of optimization

 Right size and decommission unused resources

Right sizing is the process of matching instance types and sizes to your workload
performance and capacity requirements at the lowest possible cost. It’s also the
process of looking at deployed instances and identifying opportunities to eliminate
or downsize without compromising capacity or other requirements, which results in
lower costs
1. Selecting the cheapest instance (size and family) while meeting performance
needs.
2. Most commonly based storage, and network needs.
3. Doing this before/during migration via discovery tools reduces overall efforts.
Example:
 Migration/provision and Run m4.4 x-large $1.72 per hour
 Check (Network, Disc)
 Review performance
 Save 87%

Decommission unused resources

When network resources such as Internet Protocol (IP) addresses are unused, they
can continue to incur cost. Automatically identify any unassociated IP addresses and
take automated or approval-driven action to decommission them and eliminate
waste.
 Unattached Elastics IPS
 Unattached EBS
 Idle/ unattached load balancers
 Incomplete S3
 Clearing old snapshot
 Increase Elasticity
Elastic computing is the ability to quickly expand or decrease computer processing,
memory and storage resources to meet changing demands without worrying about
capacity planning and engineering for peak usage. It allows to fit today’s cost to
today’s demand.
 Auto Scaling
Autoscaling is a cloud computing feature that enables organizations to scale
cloud services such as server capacities or virtual machines up or down
automatically, based on defined situations such as traffic utilization levels. It
is a cost-effective way to optimize cloud compute. The overall benefit of
autoscaling is that it eliminates the need to respond manually in real-time to
traffic spikes that merit new resources and instances by automatically
changing the active number of servers. Each of these servers requires
configuration, monitoring and decommissioning, which is the core of
autoscaling.

 Scheduling
It allows maximum savings via automatically turning off resources at night
with manual turn-on in the morning.
 Use Reserved Instances
It is a discount billing concept in which business can obtain significant
discounts compared to standard “On Demand” cloud computing prices in
return for committing to a specified level of usage. Can provide significant
savings compared to using On-Demand instances. Sunk cost, but the longer-
term commitment delivers a lower hourly rate. The reserved instances for on
financial services customer resulted in 39% decrease in unit cost.

 Match Storage Need

Cloud storage is a cloud computing model that stores data on the Internet
through a cloud computing provider who manages and operates data storage
as a service. Elastic compute cloud provides virtual servers on demand
different sizes (small, large, double extra-large, quadruple extra-large). It
reduces Elastic block store spending by picking the class that fits your need.
 Design for cost
 Delete or migrate unwanted files after a certain date- Cloud architects can
programmatically configure rules for data deletion or migration between
types of storage. This drastically reduces the long-term storage costs. All the
major cloud providers have the feature of Lifecycle Management.
 Compress Data Before Storage - Compressing data reduces your storage
requirements. Subsequently reducing the cost of storage.
 Minimizing data transfer costs- It makes sure your Object Storage and
Compute Services in the same region because Data transfer is free in the
same region.