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22 March 2024·6 min read

Jonas Jovaišas

Customer Success Manager, Cloudvisor

AWS Cost Optimization: how startups can save up to 40% on Amazon Web Services

Burn rate is one of the biggest challenges facing every startup founder. Every unnecessary cent spent brings your organization one step closer to the end of its runway, and a grueling fundraising round, or even the end of your startup. One way that many startups begin is by opting to use flexible AWS cloud infrastructure. This avoids the huge upfront cost of physical infrastructure, and proper AWS Cost Optimization can help startups maximize this benefit. 

Let’s take a look at common AWS errors that startups make, and how the right techniques, and AWS partners, can help your startup thrive. 

Why should startups use AWS? 

Before we jump into specific cost saving tips, let’s take a look at why startups should use a cloud infrastructure provider like AWS in the first place. Infrastructure, particularly physical infrastructure, can become a huge slice of a startup’s budget. 

Flexible cloud infrastructure offers a simple way for startups to avoid this. It can be scaled up or down, depending on current demand, and outsources a large amount of work to a highly specialized organization that knows how to maximize savings, and pass that onto their clients. 

However, this doesn’t mean that cloud infrastructure is cheap. Improper optimization can lead to runaway bills. This is why Amazon Web Services makes AWS Cost Optimization a key pillar in the AWS Shared Responsibility Model and Well-Architected Framework. It is up to AWS customers to ensure that they have properly configured their infrastructure, but they’re not alone. AWS themselves offers a number of optimization tools baked in, and AWS partners can lend a helping hand as well. 

Top AWS optimization tips

Now that we’ve covered the benefits of AWS, let’s take a look at some specific AWS Cost Optimization tips: 

Never use more cloud resources than you need

The key to understanding AWS Cost Optimization is knowing that you only ever pay for resources that you use. This is somewhat of a double-edged sword. With proper optimization, you can realize incredible savings, but if you don’t do it right, your bill at the end of the month might give you a heart attack. 

Conversely, if you over-optimize, you may find yourself unable to access resources that you need in a pinch, and compromise the overall performance of your product, especially during unforeseen spikes in traffic. 

The key here is rightsizing, and the best moment to do it is when you first set up your AWS implementation. By understanding what resources you actually need, and the best AWS tools to use them, you can get yourself some serious long term savings, and avoid any unforeseen financial headaches. 

Take advantage of on demand pricing 

If you know that you’re going to have periods of low, burstable, or zero demand, you can use on-demand pricing. This allows you to use as few, or as many, resources as you want without taking on any long term commitments. When done correctly, startups can achieve potential cost savings of up to 75%, when compared to a continuous usage model. 

Aside from On Demand Pricing, it can also make sense to look at the other pricing tiers offered by AWS. Many of these are specialized to specific use cases, and can lead to big savings down the line. For example, if you have essential data that doesn’t need to be accessed regularly, it can make sense to take advantage of the Glacier Storage Class. This is specifically designed to hold archived data for extended period, and has a very low price compared to other S3 data storage tiers. 

Take advantage of AWS cost management tools 

AWS provides a variety of tools to help automate your infrastructure and maximize any potential savings. These tools all require proper setup, but can be a powerful ally in helping to reduce your overall AWS bill. 

One of the most useful is the AWS Cost Explorer. This provides an intuitive interface that helps you to visualize and manage your AWS costs and usage over time. It’s easy to analyze costs by service, instance type, and region, while also forecasting future spend based on historical data. Additionally, this tool automatically identifies trends, anomalies, and areas for optimization. 

Another important one is the AWS Budgets tool. This lets you set up custom alerts that tell you when your spending is exceeding your specified budget. These budgets can be based on cost, usage, or reserved instance utilization, and notifications can be sent by email or the Simple Notification Service (SNS). 

Finally, the AWS Trusted Advisor automatically offers recommendations on ways to optimize your AWS infrastructure. The check identifies potential opportunities by analyzing existing usage and spend, providing constant optimization opportunities. 

Work with an AWS Partner 

Aside from these more general tips, the most surefire way to optimize AWS costs for your startup is to find a certified AWS Partner to work with. These companies specialize in AWS, and some, like Cloudvisor, specifically work with the challenges that startups will face. 

A good AWS cloud provider will offer a variety of ways for startups to save money. For example, they may provide access to a Well Architected Framework Review (WAFR), which can help startups identify problem areas, and easily correct them. Others may also provide access to the AWS Activate program, which helps startups to obtain AWS Activate credits which can be spent on AWS products or services. 

However, one of the most immediate ways that startups can save money is to join Cloudvisor’s AWS Resell program.

How does AWS resell work? 

The exact way it works depends on which AWS Partner you choose to work with, but to get a basic understanding of the service, let’s take a look at an offer from an Advanced Tier AWS Partner: Cloudvisor

Their package includes an immediate 3% discount on all AWS Spend, and a 50-90% reduction on all CloudFront rates. In addition to this discount, enrolling in their AWS Resell program gives startups access to free AWS cost optimization consultations, an annual WAFR, and even access to the AWS Activate program. 

The signup process is simple: startups simply book a no-commitment intro call, fill out an onboarding form, switch their AWS Billing to Cloudvisor, and reap the savings!

AWS cost optimization is the key to cloud success

These tips should put you well on the way to optimizing your AWS implementation. While it is possible to do a lot of this yourself, it is often better to work with an AWS Partner like Cloudvisor. This will help you ensure you’re not only getting the most of AWS, but also help you avoid many of the common pitfalls of cloud infrastructure. 

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