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  5. Introduction to AWS Cost Management

Economies of Scale

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Overview
Difficulty
Intermediate
Duration
52m
Students
52
Ratings
5/5
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Description

This course provides an introduction to cost management in AWS. It starts by looking at the economics of the cloud in general, including economies of scale and total cost of ownership, and you'll also learn why cost optimization is important.

We'll also cover the AWS Pricing Calculator and the AWS Well-Architected Framework and how these allow you to optimize your AWS environment and also calculate how much it will cost. We round off the course by taking a look at terminology across areas including software development, DevOps, finance, and general AWS terminology.

Learning Objectives

  • Get a foundational understanding of cost optimization in AWS
  • Learn the fundamentals of cloud economics including economies of scale, total cost of ownership, and why cost optimization is important
  • Learn about the AWS pricing calculator
  • Learn about the AWS Well-Architected Framework and how it can help to make your AWS environment more efficient and cost-effective
  • Understand a range of terminology linked to cost management in AWS

Intended Audience

This course is intended for cloud architects, business management, or anyone looking to manage their costs effectively in AWS.

Prerequisites

To get the most out of this course, you should already have some experience with the AWS platform.

Transcript

Welcome to this section about economies of scale. Every time you attend AWS Re:Invent, the largest AWS conference worldwide, you can see this slide. 

The only thing that changes every year is the number of price reductions. Currently, this number is 69. 

How does AWS manage to reduce prices continuously?

The answer is quite simple: Economies of scale. But what does that mean?

Let's take a look at this cycle. More customers lead to higher AWS usage which leads to more infrastructure. The economies of scale effect occurs because costs can now be spread over a larger number of customers. The infrastructure becomes cheaper, prices can be reduced and new customers benefit from the lower prices. And then the cycle starts all over again. 

With AWS you’re likely to experience lower prices over time as their infrastructure grows and the economies of scale takes place.

About the Author
Avatar
Oliver Gehrmann
FinOps Consultant & CEO of kreuzwerker Frankfurt
Students
127
Courses
3

Oliver Gehrmann is a FinOps Consultant and CEO of kreuzwerker Frankfurt, a German consulting firm with a strong focus on AWS, software engineering, and cloud financial management. He's worked in IT for over 10 years, facilitating the migration from physical servers in data centers to modern cloud infrastructures.
He and his team have experienced first-hand that costs in the cloud are becoming more and more of a challenge when about 2.5 years ago more and more customers approached them with this topic. Costs ran out of control and could not be addressed to business values.
Since that time, we have worked extensively on the topic of cloud financial management and have already been able to save our customers many millions of dollars. He now shares this knowledge in order to help others.