AWS Cost best practices for EC2

Amazon Elastic Compute Cloud (EC2) is a core component of AWS that allows you to run virtual servers in the cloud. While EC2 provides flexibility and scalability, managing costs effectively is crucial to make the most of the service. This article outlines some best practices for optimizing Amazon EC2 costs without compromising performance or reliability.
March 12, 2023
min read
Yehonatan Rumyantsev
Cloud Specialist
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TL;DR

Amazon Elastic Compute Cloud (EC2) is a core component of AWS that allows you to run virtual servers in the cloud. While EC2 provides flexibility and scalability, managing costs effectively is crucial to make the most of the service. This article outlines some best practices for optimizing Amazon EC2 costs without compromising performance or reliability.

  1. Choose the Right Instance Type

Selecting the right instance type for your workloads is essential for balancing performance and cost. Analyze the resource requirements of your applications and choose instance types that best fit their needs. Consider using tools like AWS Compute Optimizer or Amazon CloudWatch to make informed decisions based on your current usage patterns.

  1. Use Spot Instances

Amazon EC2 Spot Instances allow you to bid on unused EC2 capacity at a significantly reduced cost compared to On-Demand pricing. Spot Instances can provide cost savings of up to 90% for fault-tolerant and flexible workloads, such as batch processing, data analysis, and testing environments.

  1. Leverage Reserved Instances and Savings Plans

For predictable and consistent workloads, consider purchasing Reserved Instances or Savings Plans to commit to a specific usage level in exchange for significant discounts. Reserved Instances can provide up to 72% savings over On-Demand pricing, while Savings Plans offer more flexibility and can be applied across various AWS services.

  1. Implement Auto Scaling

Auto Scaling allows you to adjust the number of EC2 instances based on demand automatically. By scaling your instances up or down according to your workload's requirements, you can ensure that you're only paying for the resources you need and not wasting money on idle capacity.

  1. Optimize Data Transfer

Minimize data transfer costs by deploying your EC2 instances and associated services in the same region or VPC. Data transfer within the same region is typically free or comes at a reduced cost compared to cross-region transfers. Use caching mechanisms like Amazon CloudFront or Elasticache to further reduce data transfer costs.

  1. Turn Off Unused Instances

Regularly identify and turn off unused or underutilized EC2 instances to avoid unnecessary costs. Consider using AWS Instance Scheduler or custom Lambda functions to automate the process of starting and stopping instances based on your usage patterns.

  1. Use Hibernation or Instance Stop

For instances with long startup times or a need to preserve the in-memory state, consider using hibernation or the instance stop feature. Hibernation allows you to pause an instance and resume it later, while instance stop stops the instance and releases the underlying resources. Both options can help you save costs compared to running instances continuously.

  1. Monitor and Analyze EC2 Costs

Regularly monitor and analyze your EC2 costs using tools like AWS Cost Explorer, AWS Budgets, and AWS Trusted Advisor. Identify trends and inefficiencies to optimize your EC2 cost management strategy accordingly. Consider setting up cost allocation tags to gain granular insights and control over your EC2 costs.