The document outlines an AWS cost optimization strategy that emphasizes measuring and tagging resources, turning off unused instances, and utilizing auto scaling, reserved instances, and spot instances. Key recommendations include leveraging Amazon S3 storage classes and optimizing DynamoDB capacity units to reduce costs further. Additional tools such as AWS Trusted Advisor and CloudWatch are suggested for ongoing assessment and optimization.

1. AWS Cost Optimization Strategy
2014
Rob Sell

2. True Story
Cab driver asks me why I am in Vegas. I say, “Amazon
conference. You know… the cloud?”
He sighs and says, “I hate the cloud! I don’t know what
the cloud is but I know all my music has gone
somewhere else and I don’t know where. Even the name
is bad. Why did they call it the cloud? It sounds so
mysterious. Is it going to evaporate? Those Amazon guys
made a big mistake calling it the Cloud.”
“If they were smart they would have called it The Safe!
Now that would make me feel better! The cloud… ha!”

3. Top 10 Recommendations
1. Measure
2. Tag
3. Turn off unused instances
4. Use Auto Scaling
5. Use Reserved Instances
6. Use Spot Instances
7. Leverage Amazon S3 Storage Classes
8. Optimize Amazon DynamoDB Capacity Units
9. Offload your Architecture
10. Review / Further Optimize

4. Measure
• First step of improving is to measure.
• Ensure “Receive Billing Reports” is checked.
• Predict with AWS Calculators:
– AWS TCO Calculator (compare on-prem or colo to AWS)
• Analyze: Cost Explorer / Usage Report
• Netflix Ice – Free (Open Source) Cost Monitoring Tool
• Article on Netflix Ice on Netflix blog
• Netflix Ice on GitHub
• Cloudability – Commercial Cost Monitoring Tool

5. Tag
• Tag everything to categorize and track costs.
• Common tags include type of environment, platform and
name. I suggest including requestor and project for
billing.
• Automate tagging in templates.
• Ensure your tags provide meaningful reporting
• Show back at minimum
• Charge back could be ideal to ensure efficiency
• Tagging can also be used for other cool stuff like Auto-
Scaling

6. Turn off Unused Instances
• Likely your most effective cost reduction technique.
• Turn off unused or underused capacity.
• Reduce instance usage during off peak times
• Turn off test/dev environments when not in use
• Turn off dormant data when not in use
• EC2 Scheduling

7. Use Auto Scaling
• Scale up or down as needed:
• By schedule
• By policy
• Automate
• From min to max instances
• Triggers to scale up / down
• Load balancing
• Health checks

8. Use Reserved Instances
• Reserved Instances
• Upfront fee then lower hourly cost
• 1 or 3 year term (42 to 71% cost reduction over on-demand
instances)
• Flexible with instance family

9. Use Spot Instances
• Spot Instances
• Cheap (10% of demand price)
• Not always appropriate.
• Price depends on instance type and the AZ
• Add Autoscaling + Route53 (+ health checks) for failover

10. Leverage Amazon S3 Storage Classes
• Different classes will have different costs.
• Standard Storage (cheap)
• Reduced Redundancy Storage (cheaper)
• Glacier Storage (cheapest)

11. Optimize AWS DynamoDB Capacity Units
• Amazon DynamoDB lets you specify the request
throughput you want your table to be able to achieve.
• Behind the scenes, the service handles the provisioning of
resources to achieve the requested throughput rate.
• Rather than asking you to think about instances,
hardware, memory, and others that could affect your
throughput rate, they ask the throughput level you want
• In order to optimize your costs across AWS services, large
objects or infrequently accessed data sets should be
stored in Amazon S3, while smaller data elements or file
pointers (possibly to Amazon S3 objects) are best saved in
Amazon DynamoDB.

12. Offload your Architecture
• The more you offload the less infrastructure you need to
maintain, scale and pay for.
• Offload popular traffic to Amazon CloudFront and S3
• Introduce Caching

13. Review / Further Optimize
Use the following tools to further assess:
• AWS Trusted Advisor (business support)
• CloudWatch
• Amazon EC2 Usage Reports