Saving Money With Creative Tagging And Compute Optimizer

Read on Beehiiv | June 27, 2024

Welcome to the second edition of The Cloud Economist!

Last week I summarized a really interesting article about 12 ways to save money on EC2 costs, the most commonly used service in AWS.

If you missed that you can read it here.

In the question of the week, I asked how can you automate the termination and recreation of EC2 instances on a schedule.

One of our readers, Wesley Franks answered this one last week: By using AWS EventBridge (formerly CloudWatch) you can schedule the creation and termination of EC2 instances. - Thanks Wesley!

This week I’ve found some valuable articles on saving money with creative uses of resource tagging and AWS Compute Optimizer.

Here are the best articles I’ve found on cloud cost savings this week, summarized.

How to Achieve 60% AWS Cost Optimization with Terraform, Functions, and Tags?

Resource tagging plays a crucial role in AWS cost optimization by providing granular visibility into resource usage and costs.

By assigning tags to AWS resources like EC2 instances, RDS databases, and S3 buckets, the Edutech company was able to generate detailed cost reports, identify idle or underutilized resources during off-peak hours, and take action to reduce expenses.

This tagging strategy, combined with serverless functions to automatically shut down non-essential resources during quiet times, helped the company achieve up to 60% savings on their AWS bills without compromising performance.

Read the article to delve into the creative ways they use tags to save money in the cloud

Using tags in AWS is an easy and great way to start good cost-savings habit early on.

Using AWS Compute Optimizer to Cut Costs and Improve Performance 

AWS Compute Optimizer can help you save money on your AWS bills by analyzing your usage patterns of your EC2 instances, Auto Scaling groups, EBS volumes, and serverless Lambda functions, and providing recommendations to right-size or reconfigure these resources.

By following these recommendations, you can reduce waste, avoid over-provisioning, and ensure that you are only paying for the resources you actually need, which leads to significant cost savings without sacrificing performance.

You can go through the article to learn how to use Compute Optimizer in minutes to help you save on these services costs.

One Tip on Cloud Cost Savings

Werner Vogels, who writes The Frugal Architect, says this about observability in the cloud:

When critical cost metrics are placed front-and-center before engineers and their business partners, more sustainable practices emerge organically. Ongoing inspection lets you spot excess spend and tune operations to trim expenses. The return on investment in observability typically far outweighs the expense.

One tip I often use and recommend is to bookmark the Billing page in your cloud platform. This way when you open up your cloud platform console, the billing and usage reports are front and center and cannot be ignored.

This Week’s Question

How can AWS Lambda end up costing you 2-3 times more expensive per function, and what is one simple way to avoid this?

You can reply with your answer and I’ll answer it next week.

Until next week.

The Cloud Economist

Uriel Bitton