How AWS Offers IT Infrastructure at a Lower Cost

If you’re already familiar with Amazon Web Services (AWS) you’ll be aware that it offers obvious cost-saving benefits. It enables you to:

  1. Maximise reserved instances for compute with high uptime
  2. Implement automated and user-enabled start/stop for low uptime on-demand compute
  3. Right size your compute through horizontal and vertical scaling
  4. Religiously clean up (snapshot) storage and orphaned volumes
  5. Optimise your storage across storage types

Be aware that implementing these five strategies – and in particular your storage management – is critical to ensuring you get the lowest possible cost.

How Lemongrass Add Value

Lemongrass provide additional value that other vendors tend not to offer as we:

  1. Enable business insight in and oversight over the day-to-day AWS cost
  2. Manage the cost in small logical buckets
  3. Use the AWS Marketplace for software licences
  4. Actively trade Reserved Instances on the marketplace
  5. Buy Reserved Instances of the convertible type

Let’s look at these points in more detail…

1. Enable Business Insight in, and Oversight over the Day-to-Day AWS Cost

Graphs by Lemongrass Consulting demonstrating business insight for SAPLet’s face it, technical people don’t always manage budgets and finance particularly well. We have changed our technical team’s vocabulary from the cool-sounding ‘provisioning of instances’ to ‘buying instances’.

After a long period of time spent trying to get them to manage AWS cost, we have accepted the reality of the situation and have created a mobile app that enables executives and managers – the people that do care about cost – to see, on a day-to-day basis, what is being spent against plans and budgets.

We believe that enabling strong business insight and oversight will save 25% of your month-by-month AWS spend, and we have some examples to prove it.

Our mobile app exposes AWS cost and enables the business to easily spot trends. The business can also identify if expected behaviour is adhered to: stopping systems in the weekend should show a dip in cost, and a cost reduction should show the same.

Once identified, this can be actioned by the technical team, and proof that actions have been taken can be seen directly in a change in cost.

2. Manage the Cost in Small Logical Buckets

When you spend tens, if not hundreds of thousands per month, spotting anomalies for such a large sum is very challenging.

If you haven’t broken cost into logical buckets, it is hard to understand the cost patterns and make sensible observations that can lead to improvements.

That is why we enable the creation of organisational units in our cost app, so that the Project Manager has the responsibility for the project cost; we can for example see cost for a sandbox system, separate to the cost of a production system that has very different potential behaviours.

Why is the sandbox ‘always one’ during the day?

We have enabled users to start/stop the systems independently, so why not shut them down? This results in a cost saving of over £2,000 per month, achieved in seconds with no real impact on the user community.

3. Use the AWS Marketplace for Software Licences

This enables you to consume and pay for software ‘as you go’. If you scale up your environments, the software scales with it. If you scale down, you not only reduce your AWS cost, you also reduce your software cost. Progressive Cloud Aware vendors will provide this model, but there are a wide range of vendors that will fight against it and only offer the old-fashioned lock-ins – where you can only scale up and never down.

Surprisingly enough, some of the more successful vendors that target cloud environments still use these models. Luckily, they all have more agile competitors who will ultimately overtake them using this new model.

When buying software in support of your AWS estate, always look for providers on the Marketplace first.

4. Actively Trade Reserved Instances on the Marketplace

The AWS Marketplace allows owners of Reserved Instances to sell them if they are no longer required.

When you buy a Reserved Instance on the Marketplace, you don’t pay AWS Support, as that is already paid for by the original buyer – which immediately saves on costs. The Marketplace allows you to look for and buy Reserved Instances with a short remaining useful life. This might be very beneficial if you are only planning to use your computes for a short period. So in this way, you still receive the Reserved Instances cost reduction of up to 70%.

At the same time, you can also be more aggressive in buying Reserved Instances, as if you don’t need them in the future for whatever reason, you can simply sell the remaining value. Be aware that AWS charges you a 12% fee for doing so, and that you lose your support fee that was paid for when you bought the Reserved Instance, so you need to take that into account. But in no time at all – given the amount of cost savings a Reserved Instance gives you – it is still a very worthwhile exercise. It pays to be bold.

Accepting this buying and selling process and enabling this level of agile procurement in your business can open up a whole other layer of Amazon Web Services cost savings.

5. Buy Reserved Instances of the Convertible Type

Convertible Reserved Instances allow you to trade them in – as long as your total spend does not decrease. So, when you start your new project on AWS, buy Convertible Reserved Instances as soon as your usage pattern dictates. Don’t worry about whether they are 100% the right ones – and when you need others, simply trade them in.

Change Your Culture

So here is the downside: all of this is great, but it requires a real adjustment in corporate IT culture.

Most IT organisations are used to 3-year fixed-price contracts that tend to be very easy to manage. Moving to a different, more agile model requires a fundamental change in culture – which can be hard work! In the end, it is worth it however.

To implement this, you need executive and management oversight to instigate the changes. This is where our mobile app comes into play: it facilitates change. We have experienced this first-hand in our own business.

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