Cost Optimization

• The question it answers
  • Are we delivering business value at the lowest price point?
• Design principles
  • Implement cloud financial management (FinOps) as a capability.
  • Adopt a consumption model — pay only for what you use.
  • Measure overall efficiency — cost per business outcome, not raw spend.
  • Stop spending money on undifferentiated heavy lifting — let AWS run the data center.
  • Analyze and attribute expenditure — cost allocation tags and consolidated billing.
• Typical services and levers
  • AWS Cost Explorer, AWS Budgets, AWS Cost and Usage Report, AWS Compute Optimizer, AWS Trusted Advisor.
  • Pricing levers: Savings Plans, Reserved Instances, Spot Instances, Right-sizing, S3 lifecycle policies.
• Ties to
  • fixed costs vs variable costs — the core economic shift of moving to cloud.

Methods

• Right-sizing
• Increasing Elasticity
• Choosing the right pricing model
  • e.g., Instance Pricing Options