AWS Costs: the 5 most common mistakes

(Mis)managing your AWS Costs

We all know that AWS lets us deploy applications in ways that would have been unimaginable using traditional IT infrastructures and processes. But for that very reason it’s a bit too easy to lose track of exactly what you have running at any one time. The end of a billing period might consequently bring unexpected AWS costs indicating that your ongoing charges have soared out of control.
To avoid this, you’ll have to better understand where these surprises can come from. In this article I will describe what I believe to be the five biggest AWS costs control and resources management mistakes people and organizations currently make.

1. Using oversized instances, too many instances, or leaving instances running idle

Carefully choosing the correct instance type is a fundamental decision you’ll have to confront. What size instances should you run? How many will you need? How will you keep track of all your resources (a good place to start is your AWS account’s Billing page)? Each infrastructure deployment has it’s own unique characteristics, so these are questions that only you and your organization can answer. Instance types that are specifically optimized for compute, memory, or storage are obviously going to cost more than low-tier or general versions. It’s your responsibility to ensure you’re not over-provisioning for your specific project. But remember: using oversized instances will cost you money, using too many instances will cost you money, and leaving unused instances running will, you guessed it, cost you money.

2. Choosing the wrong instance model

Besides instance types, there are also three three distinct ways to purchase instance resources and thereby closely control your AWS costs:

  • On-Demand Instances allow you to pay a fixed rate by the hour with no commitment.
  • Reserved Instances provide a capacity reservation, offering a significant discount over hourly on-demand prices when you commit to longer-term instance purchases.
  • Spot Instances enable you to bid your own price for instance capacity. Assuming that your applications have flexible start and end times and can survive service interruptions when instances at your bid price aren’t unavailable, this can provide significant savings.

For a first time AWS user, On-Demand Instances are the easiest to deploy and “no-commitment” sounds attractive. But using On-Demand for any sustained periods can generate unexpected AWS costs at the end of the month. Continuously stopping and starting these instances will also prove costly. If you are planning on deploying a site that needs to operate 24/7 and expect to run this site over for the next 12 months, you would be far better off with a reserved instance, since you’ll know your exact costs up front. If you’re planning to deploy infrastructure that’s a little more complex and requires Elastic Load Balancers and Auto Scaling, you will probably need to draw on a combination of both On-Demand and Spot Instances, carefully calculating the relative AWS costs. Doing this right requires some careful planning.

3. Taking too many snapshots

You can back up the data on your Amazon EBS volumes to Amazon S3 by taking point-in-time snapshots. Backing up your data is not only a smart thing to do but, more often than not, it’s critical. However, EBS snapshots should be saved in moderation, or you may find yourself suffering from snapshot sprawl…which can exponentially increase your storage costs. Make sure you have an EBS Snapshots retention strategy in place (using S3 Lifecyle rules) that’s a good fit for your particular needs.

4. Not releasing allocated Elastic IPs

AWS allows you one Elastic IP (EIP) address associated with a running instance at no charge. However, you will be charged for each additional EIP that you associate with that instance per hour on a pro rata basis. To ensure efficient use of Elastic IP addresses (which are, by definition, a limited resource), AWS also imposes a small hourly charge when these IP addresses are not associated with a running instance or when they are associated with a stopped instance or an unattached network interface. That’s right: you may just stop your instance and assume that the IP associated with it will be automatically released. Unfortunately, this is not the case, and your accrued AWS costs will prove it. So make sure that you aren’t maintaining (and paying for) any unused EIPs.

AWS costs image5. Not monitoring AWS costs using CloudWatch and Smart Alerts

Amazon CloudWatch is a monitoring service for AWS cloud resources and the applications you run on AWS. You can use Amazon CloudWatch to collect and track metrics, monitor log files, and set alarms. You can set alarms on any of your metrics to receive notifications or automatically initiate other actions (like shutting down unused or underused EC2 instances) when a metric crosses your specified threshold. You can also use Auto Scaling to add or remove Amazon EC2 instances dynamically based on your Amazon CloudWatch metrics. If you have complex infrastructure of any kind running on AWS, you really need to use CloudWatch to keep up with it.
Most importantly, however, can be the Billing Alerts you create to warn you when your monthly costs reach a certain predetermined threshold.

Control AWS Costs: plan ahead

Careful consideration of the above points will hopefully help you keep your ongoing AWS costs down. As we mentioned, Amazon is a fabulous platform for deploying large applications at prices unimaginable until recently. However if these applications aren’t carefully monitored and kept in check, you may find that the money you’d hoped to save by deploying your infrastructure on AWS is silently flying out the window.
Read also EC2 Pricing: understanding compute costs on AWS

Written by

I have been UNIX/Linux System Administrator for the past 15 years and am slowly moving those skills into the AWS Cloud arena. I am passionate about AWS and Cloud Technologies and the exciting future that it promises to bring.

Related Posts

— November 28, 2018

Two New EC2 Instance Types Announced at AWS re:Invent 2018 – Monday Night Live

Let’s look at what benefits these two new EC2 instance types offer and how these two new instances could be of benefit to you. Both of the new instance types are built on the AWS Nitro System. The AWS Nitro System improves the performance of processing in virtualized environments by...

Read more
  • AWS
  • EC2
  • re:Invent 2018
— November 21, 2018

Google Cloud Certification: Preparation and Prerequisites

Google Cloud Platform (GCP) has evolved from being a niche player to a serious competitor to Amazon Web Services and Microsoft Azure. In 2018, research firm Gartner placed Google in the Leaders quadrant in its Magic Quadrant for Cloud Infrastructure as a Service for the first time. In t...

Read more
  • AWS
  • Azure
  • Google Cloud
Khash Nakhostin
— November 13, 2018

Understanding AWS VPC Egress Filtering Methods

Security in AWS is governed by a shared responsibility model where both vendor and subscriber have various operational responsibilities. AWS assumes responsibility for the underlying infrastructure, hardware, virtualization layer, facilities, and staff while the subscriber organization ...

Read more
  • Aviatrix
  • AWS
  • VPC
— November 10, 2018

S3 FTP: Build a Reliable and Inexpensive FTP Server Using Amazon’s S3

Is it possible to create an S3 FTP file backup/transfer solution, minimizing associated file storage and capacity planning administration headache?FTP (File Transfer Protocol) is a fast and convenient way to transfer large files over the Internet. You might, at some point, have conf...

Read more
  • Amazon S3
  • AWS
— October 18, 2018

Microservices Architecture: Advantages and Drawbacks

Microservices are a way of breaking large software projects into loosely coupled modules, which communicate with each other through simple Application Programming Interfaces (APIs).Microservices have become increasingly popular over the past few years. The modular architectural style,...

Read more
  • AWS
  • Microservices
— October 2, 2018

What Are Best Practices for Tagging AWS Resources?

There are many use cases for tags, but what are the best practices for tagging AWS resources? In order for your organization to effectively manage resources (and your monthly AWS bill), you need to implement and adopt a thoughtful tagging strategy that makes sense for your business. The...

Read more
  • AWS
  • cost optimization
— September 26, 2018

How to Optimize Amazon S3 Performance

Amazon S3 is the most common storage options for many organizations, being object storage it is used for a wide variety of data types, from the smallest objects to huge datasets. All in all, Amazon S3 is a great service to store a wide scope of data types in a highly available and resil...

Read more
  • Amazon S3
  • AWS
— September 18, 2018

How to Optimize Cloud Costs with Spot Instances: New on Cloud Academy

One of the main promises of cloud computing is access to nearly endless capacity. However, it doesn’t come cheap. With the introduction of Spot Instances for Amazon Web Services’ Elastic Compute Cloud (AWS EC2) in 2009, spot instances have been a way for major cloud providers to sell sp...

Read more
  • AWS
  • Azure
  • Google Cloud
— August 23, 2018

What are the Benefits of Machine Learning in the Cloud?

A Comparison of Machine Learning Services on AWS, Azure, and Google CloudArtificial intelligence and machine learning are steadily making their way into enterprise applications in areas such as customer support, fraud detection, and business intelligence. There is every reason to beli...

Read more
  • AWS
  • Azure
  • Google Cloud
  • Machine Learning
— August 17, 2018

How to Use AWS CLI

The AWS Command Line Interface (CLI) is for managing your AWS services from a terminal session on your own client, allowing you to control and configure multiple AWS services.So you’ve been using AWS for awhile and finally feel comfortable clicking your way through all the services....

Read more
  • AWS
Albert Qian
— August 9, 2018

AWS Summit Chicago: New AWS Features Announced

Thousands of cloud practitioners descended on Chicago’s McCormick Place West last week to hear the latest updates around Amazon Web Services (AWS). While a typical hot and humid summer made its presence known outside, attendees inside basked in the comfort of air conditioning to hone th...

Read more
  • AWS
  • AWS Summits
— August 8, 2018

From Monolith to Serverless – The Evolving Cloudscape of Compute

Containers can help fragment monoliths into logical, easier to use workloads. The AWS Summit New York was held on July 17 and Cloud Academy sponsored my trip to the event. As someone who covers enterprise cloud technologies and services, the recent Amazon Web Services event was an insig...

Read more
  • AWS
  • AWS Summits
  • Containers
  • DevOps
  • serverless