The financial impact of cloud adoption must be noticed. While 94% of businesses have embraced cloud services for their agility, controlling cloud expenditure is crucial for ensuring long-term financial benefits.
As an elite Validated AWS Well-Architected Partner Program (WAPP) partner, Ubertas Consulting’s team reviews hundreds of workloads yearly, and remediating the Cost Optimisation pillar is often the highest priority.
With that in mind, Ubertas made the AWS Cost Awareness topic the core of its Cloud Power-Up webinar, hosted by Alex Kearns, Head of Consulting and AWS Ambassador, with Ubertas, Head of Customer Success Henry Hill, and Head of Delivery Keith Lynass.
Ubertas, a Premier AWS consulting partner (the highest-tier partnership in existence), has served hundreds of clients over the past 16 years and recently merged to become part of Devoteam, a global consulting firm increasingly focused on AI.
Cost Optimization vs Cost Awareness
Kearns kicked off the webinar by emphasizing that although “cost optimization and cost awareness are almost exclusive of each other, they benefit from each other.”
“Cost optimization consists of evaluating cloud services to take all opportunities possible to reduce usage and become more cost-efficient,” Kearns said. “A reduction in AWS usage usually results in a reduction in spending because of its pay-as-you-go model.”
However, Kearns explained that whilst reducing usage is a key form of cost optimization, often finding a way to get more value for the same amount of money is best.
“Cost optimization can be double faceted where it’s either saving money or getting more for the same amount of money,” Kearns said. “An example might be upgrading to using AWS’ in-house chips. The Graviton chips deliver better price-performance for the same amount of money.”
Kearns continued: “And then the third part of this is the alternative purchasing models. So when you start on AWS, everything is on demand or entirely pay-as-you-go. You use nothing, you spend nothing, you use a lot, you might spend a lot.” He then explained the alternative purchasing models available, including the concept of exchanging usage commitments for discounts.
Kearns reiterated the three levers for cost optimization:
- With a reduction in usage, money is saved most of the time.
- Increasing efficiencies, whether getting more for your money or finding a more efficient way to run the same processes.
- Exploring alternative pricing models that give you discounts in exchange for commitments.
He said combining these things will give the most significant benefits in terms of cost optimization.
Kearns adds that cost awareness helps with cost optimization. Awareness is understanding where money can be saved, whether something requires further review, or where things are going right.
“What I am trying to say is we need to be aware of each and every cost, investigate why there’s been a decrease in one spend and increase in another,” Kearns said. “So, there might be something wrong with configuration, unless we investigate, we will not know how to achieve cost optimization.”
Monitoring the AWS Spend
Kearns then covered AWS Cost Explorer, Cost Allocation Tags, and AWS Budgets, built as AWS services and free to use on the platform. These tools help departments, divisions, teams, and/or individuals understand costs and usage in detail. They will help increase cost awareness and cost optimization.
“Within Cost Explorer, you can look at cost allocation tags. This is where you can start to become more aware of costs based on your dimensions rather than AWS’ predefined dimensions,” said Kearns.
“So these dimensions could be things like departments or customer names, anything you want really, as long as it’s a text string that you can tag things with,” he added. “The nice thing you have with this is you can then build those reports to show different AWS costs, and then you track the cost and usage trends on those dimensions that you define, which allows you to identify which areas are increasing and which are decreasing.”
Based on forecasts, you can monitor if and which areas of your business, teams, or individuals, such as developers, are about to exceed their budget so you can act proactively rather than reactively. In essence, that’s how cost awareness enables greater cost optimization.
