Blog Post|Technology Tips

How You Can Reduce Your AWS Bill By 40% or More

All for-profit organizations have two goals in common – (1) increase profits and (2) lower costs.  

In current unprecedented times, the former can be a bit of an uphill battle, as many firms have already found. However, the latter is very much doable – as long as companies understand where they are spending their money and find ways to curtail this spending.  

One key component – streamlining technology infrastructure –offers companies opportunities to reduce costs, boost ROI, and improve profitability. Many organizations spend much more on technology than is strictly required to run their operations or serve their customers.  

At Nium, our realization of this came at a very opportune time – right on the heels of the COVID-19 outbreak. Although the resilience of our businesses helped us emerge stronger on the other side of the pandemic, it was the right moment for us to consider how we can become even more efficient at running the financial technology powerhouse that is called Nium! 

2020 was the year where every business had to relook at all expenses and try optimizing their cost structure I Source : Shutterstock

As a future-focused organization, Nium relies heavily on technological solutions like Amazon Web Services (AWS), as well as its compute power, database storage, and content delivery functionalities to manage our technology stack. This scalable, reliable and secure cloud services platform enables us to run web and application servers, securely store our files, build new applications, and do a lot more to increase organizational productivity and competitiveness.  

When building applications and workloads on AWS, it is critical to control the economics of the architecture. This means that although AWS’ pay-as-you-go pricing model offers significant cost advantages, it is still important to keep an eye on the AWS bill.  

During any given month, if your AWS bill is higher than usual, it may give the impression that the business is growing, and therefore needs greater AWS support. Now, this may be occasionally true – but not always. In fact, during a crisis, such as the one caused by the COVID-19 pandemic, if your AWS bill is on an upward trajectory month over month, it may still be that the bill is not corresponding to the usage. In order to lower your AWS bill, you need to take a closer look at how to effectively use and optimize its services. 

Optimizing the AWS spend was more of an effectiveness exercise than a cost cutting exercise for Nium I Source : Shutterstock

And this is exactly what we did at Nium. We set a goal for ourselves – to optimize our AWS costs and reduce the size of our monthly bill. In less than four months, we managed to reduce our AWS bill by a whopping 42% which contributed to meaningfully grow our operating profits.  

How did we do this? This is the key question we aim to answer with this new blog series. In each article of the series, we will discuss in detail some of the tangible steps we took to reduce the cost of each AWS service we use here at Nium. Every blog will address a particular aspect of our cost-saving journey, and explain some of the lessons we learned along the way. 

These vital lessons will go beyond the focus of reducing your AWS cost through cosmetically analyzing your bills and reports. They will seek to take you on a mindset-changing journey that leads to realizing technological efficiencies as well as unlock scalability at an architectural level. So, don’t be surprised if some of these lessons would require you to roll up your sleeves and undertake code level changes to create meaningful optimizations in the way you use web services. 

Source : Amazon Web Services

Some of the topics covered include: 

  • How to read your monthly bills: There is a lot of information in your bill that you need to uncover and deeply analyze. This is probably the first game-changing move you will make.  
  • How to use inbuilt graphs and data provided by AWS: Your monthly AWS bill opens your eyes, while its graphs and data complement your ideas, and help you pinpoint the underlying problem(s). 
  • Elastic Compute Cloud (EC2) virtual machinesThis is one of the most highly-used compute elements of AWS, and is likely to constitute a major part of your bill. This will be a major focus area in one blog so you can save most of your money. 
  • Elastic compute services containerization: Think of this as AWS renting its servers for us to use, which we then rent within our organization for reuse. Ideally, we do not want any unutilized server area because we want to extract the maximum value out of each server. We will show you how in this one blog dedicated to elastic compute services containerization. 
  • RDS (Database)Usually, this is the second-highest cost attributed to an organization’s AWS bill. We will talk about the steps you can take to reduce your organization’s AWS database bill. 
  • Load balancer (ALB or ELB)This is one of the AWS services that helps us utilize our infrastructure more efficiently. Unfortunately, we tend to keep adding ALB to our AWS workload without checking if is really required. Result: a monthly load balancer bill that really bites our budget! 
  • EBS volumeThis is the storage that we attach to the server. This aspect can be attributed to habit, wherein we unknowingly keep attaching heavy volumes and do not clean up. 
  • S3 (Simple Storage Service)S3 is usually used to store objects like files, folders, images and documents. Usually, it is quite cheap (The per GB storage price has fallen by 80% since it was first introduced in 2006). However, if you leave it unmonitored and uncontrolled, S3 too will start showing itself as the most expensive element of your AWS bill. 
  • Neptune (Database): This graph database service helps us solve many complex problems due to its speed, reliability, and scalability. However, when it comes to cost, hardly any optimization options are provided by AWS so we need to devise our own cost-optimization strategy. In this blog, we will show you how! 
  • Redis (Remote Dictionary Server)This fast, in-memory key-value data store is used as a database, message broker, queue and for caching. It is a frequently used AWS feature in any company. Redis is meant to be lightweight and extraordinarily flexible. But if you do not handle it properly, then from a cost perspective, it transforms very quickly from lightweight to heavyweight! 
  • Lambda serverless: We are huge fans of this serverless technology that allows you to run multiple functions in the cloud. It even solves a number of complex problems at a very low cost. But is it suitable for all use cases? Can we end up paying more rather than less? We will answer these questions in this blog. 
  • In the last blog of this series, we will provide a lot of smart tips and tricks to help organizations and even individuals who use personal account for POC, to lower their AWS bills.  

Now, before we wrap up, we should mention one point that may seem slightly counter-intuitive – reducing AWS costs is not just a Science, but also an Art. This is because there are many ways to reduce your bill, and you need to find the way (or ways) that best fit your organization’s needs.  

In short, one size does not fit all. For example, you can use reserved instances, spot instances, etc. to control your costs – but another organization may choose to follow a different path. You will need to apply your artistic – not to mention analytical, comparison, and judgment – skills to explore different options, do a cost/benefit analysis, and identify the most relevant solutions for your company. 

See you in the next #TechTalks blog! 

Author: Sovit Jain, VP & Technology Head at Nium

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