Amazon Web Services (AWS) allows you to control cloud costs and consistently optimize the expenses while creating modern, cost-efficient and scalable applications to meet Fintech requirements. Here are some tips that can help you reduce AWS costs.
With a wide variety of services, AWS cloud allows the applications to reach total capacity and enhances flexibility. However, AWS cost optimization is not as easy as it sounds. The path could be a little smoother for companies “born” in the cloud, but such is not the case with companies that migrated.
Why is AWS Costs Reduction Strategy Needed?
All Fintechs using public cloud services should have a cost management plan in place. It doesn’t matter if you are over budget or not; you should start with cost optimization immediately. Reducing AWS costs can be challenging, and like most companies, you too are spending money on resources you are not utilizing.
The primary sources of wasted cloud spend are:
Idle Resources
These are non-production resources used in the development, quality analysis, staging, and testing phase and are usually needed only 40 hours a week. Since on-demand AWS charges are based on the total time the resources are running, it means that on weekends and nighttime (approximately 65% of the week), the cloud spend is wasted on these resources.
Oversized Resources
AWS gives you the option of choosing different sizes for every instance, and most of the users have the default behavior of selecting the largest instance. This behavior could be because of the uncertainty of meeting future demands. However, it is seen that the average deployment of AWS resources is around 2%, thus indicating routine over deployment. By reducing an instance by one size, you can reduce the expense by 50%. If you reduce it by two sizes, you can save 75%.
Ways to Reduce AWS Costs
Fintechs can implement various solutions to reduce AWS costs. In the case of non-production instances that are utilized only during production hours, developers can switch off these instances when not in use. Developers can also create scheduling scripts for automated procedures for non-production instances.
There are specific applications where other AWS tools can be used that are beyond the on-demand resources. If you are running a non-time-sensitive application where scheduling scripts could interrupt, you can use spot instances to decrease AWS costs. If you are sure of the future capacity requirements, you can also use reserved instances or convertible reserved instances to optimize AWS costs.
Having said that, none of these solutions are pitch-perfect. Your developers may switch off non-production instances for a few days and then become irregular. Scheduling scripts could also reduce available resources for priority activities. Moreover, AWS has no easy way to take care of AWS instance sizing other than a manual review, which is not practical. Also, spot instances can be discontinued when the market price surpasses your bid, hence becoming an option for specific applications.
However, reserved instances and convertible reserved instances can help achieve AWS cost optimization. Still, they require substantial upfront payment with organizational prudence to take advantage of the best discounts. Additionally, suppose the instance pricing is cut during the time of your contract, which is usually a common occurrence. In that case, the difference between your on-demand and reserved price becomes even less.
Reserved instances are a good fit for certain production instances, but it is not the primary strategy for cost optimization. There are other ways for AWS cost optimization that you should consider.
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A more appropriate solution for cost optimization projects is AWS technology consulting partner, Cloudvisor. We help you reduce AWS costs through efficient operation. Our team of experts thoroughly audits your Fintech AWS infrastructure, deduces the areas of concern, and accordingly guides you on using AWS services correctly.
Fintech is about adopting the best cloud services and making the most of the services. For that, you must continuously optimize your cloud expenses and review your services to decipher what is working efficiently and what isn’t. At Cloudvisor, we develop tailored recommendations to improve your AWS setup and reduce your cost immediately. You quickly get hands-free governance of your AWS accounts.
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