Cost-effective resources - AWS Well-Architected Framework

Cost-effective resources

COST 5  How do you evaluate cost when you select services?

Amazon EC2, Amazon EBS, and Amazon S3 are building-block AWS services. Managed services, such as Amazon RDS and Amazon DynamoDB, are higher level, or application level, AWS services. By selecting the appropriate building blocks and managed services, you can optimize this workload for cost. For example, using managed services, you can reduce or remove much of your administrative and operational overhead, freeing you to work on applications and business-related activities.

Best Practices:

  • Identify organization requirements for cost: Work with team members to define the balance between cost optimization and other pillars, such as performance and reliability, for this workload.

  • Analyze all components of this workload: Ensure every workload component is analyzed, regardless of current size or current costs. Review effort should reflect potential benefit, such as current and projected costs.

  • Perform a thorough analysis of each component: Look at overall cost to the organization of each component. Look at total cost of ownership by factoring in cost of operations and management, especially when using managed services. Review effort should reflect potential benefit: for example, time spent analyzing is proportional to component cost.

  • Select software with cost effective licensing: Open source software will eliminate software licensing costs, which can contribute significant costs to workloads. Where licensed software is required, avoid licenses bound to arbitrary attributes such as CPUs, look for licenses that are bound to output or outcomes. The cost of these licenses scales more closely to the benefit they provide.

  • Select components of this workload to optimize cost in line with organization priorities: Factor in cost when selecting all components. This includes using application level and managed services, such as Amazon RDS, Amazon DynamoDB, Amazon SNS, and Amazon SES to reduce overall organization cost. Use serverless and containers for compute, such as AWS Lambda, Amazon S3 for static websites, and Amazon ECS. Minimize license costs by using open source software, or software that does not have license fees: for example, Amazon Linux for compute workloads or migrate databases to Amazon Aurora.

  • Perform cost analysis for different usage over time: Workloads can change over time. Some services or features are more cost effective at different usage levels. By performing the analysis on each component over time and at projected usage, you ensure the workload remains cost effective over its lifetime.

COST 6  How do you meet cost targets when you select resource type, size and number?

Ensure that you choose the appropriate resource size and number of resources for the task at hand. You minimize waste by selecting the most cost effective type, size, and number.

Best Practices:

  • Perform cost modeling: Identify organization requirements and perform cost modeling of the workload and each of its components. Perform benchmark activities for the workload under different predicted loads and compare the costs. The modeling effort should reflect potential benefit: for example, time spent is proportional to component cost.

  • Select resource type and size based on data: Select resource size or type based on data about the workload and resource characteristics: for example, compute, memory, throughput, or write intensive. This selection is typically made using a previous version of the workload (such as an on-premises version), using documentation, or using other sources of information about the workload.

  • Select resource type and size automatically based on metrics: Use metrics from the currently running workload to select the right size and type to optimize for cost. Appropriately provision throughput, sizing, and storage for services such as Amazon EC2, Amazon DynamoDB, Amazon EBS (PIOPS), Amazon RDS, Amazon EMR, and networking. This can be done with a feedback loop such as automatic scaling or by custom code in the workload.

COST 7  How do you use pricing models to reduce cost?

Use the pricing model that is most appropriate for your resources to minimize expense.

Best Practices:

  • Perform pricing model analysis: Analyze each component of the workload. Determine if the component and resources will be running for extended periods (for commitment discounts), or dynamic and short running (for spot or on-demand). Perform an analysis on the workload using the Recommendations feature in AWS Cost Explorer.

  • Implement regions based on cost: Resource pricing can be different in each region. Factoring in region cost ensures you pay the lowest overall price for this workload

  • Select third party agreements with cost efficient terms: Cost efficient agreements and terms ensure the cost of these services scales with the benefits they provide. Select agreements and pricing that scale when they provide additional benefits to your organization.

  • Implement pricing models for all components of this workload: Permanently running resources should utilize reserved capacity such as Savings Plans or reserved Instances. Short term capacity is configured to use Spot Instances, or Spot Fleet. On demand is only used for short-term workloads that cannot be interrupted and do not run long enough for reserved capacity, between 25% to 75% of the period, depending on the resource type.

  • Perform pricing model analysis at the management account level: Use Cost Explorer Savings Plans and Reserved Instance recommendations to perform regular analysis at the management account level for commitment discounts.

COST 8  How do you plan for data transfer charges?

Ensure that you plan and monitor data transfer charges so that you can make architectural decisions to minimize costs. A small yet effective architectural change can drastically reduce your operational costs over time.

Best Practices:

  • Perform data transfer modeling: Gather organization requirements and perform data transfer modeling of the workload and each of its components. This identifies the lowest cost point for its current data transfer requirements.

  • Select components to optimize data transfer cost: All components are selected, and architecture is designed to reduce data transfer costs. This includes using components such as WAN optimization and Multi-AZ configurations

  • Implement services to reduce data transfer costs: Implement services to reduce data transfer: for example, using a CDN such as Amazon CloudFront to deliver content to end users, caching layers using Amazon ElastiCache, or using AWS Direct Connect instead of VPN for connectivity to AWS.