Tolga Talks Tech: AWS Cost Optimization

Tolga Talks Tech is a weekly video series in which Onica’s CTO Tolga Tarhan tackles technical topics related to AWS and cloud computing. This week, Tolga discusses AWS cost optimization with Tim Fox, VP of Managed Cloud Services at Onica.  For more videos in this series, click here.

There are a lot of reasons to move to the cloud but the one we hear most is probably  cost savings. Do customers really see cost savings when they move to the cloud?

Yes, they do. It does take a little bit of effort to optimize those savings though, because you have to remember you are going to an environment where you pay for what you use. So every time you spin something up, you do have that concept of another coin going in the bucket. As long as there are some controls in place though, you absolutely will save money when you move to the cloud.

Going from an environment where you make big purchases a couple of times a year into a more dynamic environment, how do you control what you’re spending and how much you’re spending?

With AWS there are some tools such as cost controls and cost explorer you can use to see spend. You can actually put budgets in place so to see when users are actually doing things. There are also some third party tools like Cloud Health, CloudChecker, and Cloud Ability, that actually give insight into where your money is going across all your regions and all your different accounts so you have a good understanding of where your money is going.

We are seeing some of our customers take some of those toolsets and are looking at how they can do cost analysis or the concept of cost showback, and taking it to the point where they can even do cost chargeback internally, so they can actually say “This is what an application costs.”

In fact, we have one customer whose whole goal was to get down and understand the exact cost per subscriber for their SaaS based solution to the point they were able to say their entire AWS infrastructure was costing about $2.75 per user per month, and were able to report that information to the board by using some of these tools.

Amazon has some cost savings programs as well, like reserved instances.

Correct. So that’s another way you can do it. There are ways to look at how you’re spending and optimizing. Reserved instances (RIs) is one way to do that. You can save up to 60% in any given period of time depending on the type of RI you buy and where you buy it. But there are some other things you can do as well. Architectural changes will allow you to save costs. If you re-architect your environment from being able to do auto-scaling groups, or if you engineer it so you can shut things down on the weekends so you’re no longer paying for Dev and QA environments to be up. Sometimes its a matter of looking at how you’re using your environment, like saying “Can I use CloudFront as compared to using S3 for delivery?” which actually saves you money which many people don’t actually realize.

So clearly there are some financial engineering products and solutions, and then there’s also some architectural things that can help save costs. How do we at Onica help customers accomplish these?

On the financial side, we have Cloud Optimizer which allows us to delve into our customers AWS environments, give them a good understanding, and give them access to cloud business analysts that work on their behalf. The business analysts will actually do the slicing and dicing of where they’re spending their money, and give them reports so the customer can understand how to do showback and how to do chargeback. On the other side, when you talk about architectural changes that can be made, we have Cloud OpsPilot which is our managed services offering. This gives us a capability to actually make those changes for our customers on an on-going basis.

Our belief is that we want to make our customers better cloud consumers, and Cloud OpsPilot is one of the ways to do that because you can use our pod of engineers to make those adjustments that will help reduce your costs long term.

For more tips and tricks on how to optimize your AWS costs, check out our on demand webinar on Cost Optimization! You can also learn more about how Onica can help actively manage your AWS costs on our Managed Services page.

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