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  5. Introduction to AWS Cost Management

Pricing Calculator

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Overview
Difficulty
Intermediate
Duration
52m
Students
199
Ratings
4.3/5
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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

With the AWS Pricing Calculator, you have a powerful tool to estimate costs, reduce running expenses and find the cheaper, better suited solution for your environment. Welcome to the section about the AWS Pricing Calculator.

The Pricing Calculator has undergone many name changes and innovations over the years. The current version as of fall 2020 is a great help to estimate the total cost of your AWS environment, find the right instance sizes and compare services across different regions.

Let's have a look at how the tools work exactly. When you generate an estimate, you can either add services directly to your estimate or create a group and add the services to your group. This time I will show to set up a group with an Amazon EC2 instance that you can use to perform tasks, such as, run a small program or host a website.

We'll now create an estimate and assign it to a region. So we click on, Create Estimate and we need to look up the service we're looking for. Wanna estimate an EC2 instance, so we're looking here for EC2 and click on, Configure. We have to choose a region.

Bear in mind, every region has a different pricing. There are cheaper and there are more expensive regions. We will take Frankfurt as this is where I'm sitting currently. You can either create quick estimate or an advanced estimate. We will go for the advanced estimate, because this gives us the option to also choose the kind of workload that we have.

Let's assume we have an online blog and we have many users or visitors over the weekends. So we choose daily spike traffic. And we assume that we have a lot of visitors on Friday, Saturday and Sunday. We have a baseline of, let's say, three instances and during peak times over the weekend, we have 10. Peak times are eight hours and we need to find an instance.

Let's say we need two CPUs and four gig of RAM and the tool tells us which instance would be the cheapest, as you can see here. Let's say we take the t3a. The A stands for an AMD chip set. We can see we have four gigs of memory. Two CPUs. Enough network traffic. And that's good enough.

Here you can choose the pricing models. We will cover this later within the course. So we'll just go for On-Demand here. 10 gigs of storage is enough. Daily, two daily snapshots. We also have some data transfer. Let's say, 10 gigs. Intra-region transfer, no. Outbound, yeah, let's say also 10 gigs, just to get some numbers in here. And you can see here, we would have EC2 costs monthly of $72 and some storage costs of $50. 

We have $87 total cost for our EC2 instance and bare in mind that we have a spikey workload. So these with these usage patterns are already calculated in here. We can now add this calculation to our estimate and see how much our website or our blog would cost us for 12 total months.

We could now save our estimate or add another service. For example, let's say we also need a database, maybe like MySQL database. Notice that's a huge instance here. Let's go for a small one, m5.2xlarge. It's also a big a one, but it's just for numbers, right? On-Demand is fine. 20 gigs of storage.

Then we can see the database would cost us $592, plus a little bit of storage. We can also add this to our estimate and we can now see the total price here and so it goes on. You can add the services and tools that you need here and get a very accurate estimate for your total costs.

About the Author
Avatar
Oliver Gehrmann
FinOps Consultant & CEO of kreuzwerker Frankfurt
Students
306
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.