While moving to consumption based spending from a data center can be advantageous for many reasons, companies still need to pay attention to their spends and have the ability to optimize them beyond just through workload management. This article will explore options to help mitigate costs from the procurement level.
Compute Savings Plans
The lowest hanging fruit for any company is to purchase a saving plan to cover consistent compute spend. The keyword here is consistent as the spend commitment is on an hourly rate. If your workloads are extremely burst-like, this approach may not afford much in savings unless that burst workload can be spread out more consistently. Savings Plans have matured over the last couple of years and now include no upfront cost options as well. My current recommendation is to slowly commit into Saving Plans and true up on a regular basis (usually quarterly) to avoid under utilization of the plans.
Reserved Instances (RI)
For RDS, reserved instances provide the same benefit as Compute Savings Plans with a discount in exchange for the term commitment.
Enterprise Discount Program (EDP)
The foundation for larger accounts, the EDP provides an across the board discount in exchange for a guaranteed spend commitment to AWS. Working with your Account Executive (AE), and hopefully having Savings Plans and RIs in place, your AE can build the business case and assess an appropriate discount and spend commitment. Savings Plans and RIs can help demonstrate a solid baseline if an aggressive spend target is sought for a significant discount. The rates are in a predetermined table, so the only way to increase the discount is to increase the spend commitment.
Pro Tip: If you use a third party to manage your AWS spend (so your account is not AWS direct billed), there supposedly is a 2% burden attached to the discount (so if you would get a 10% discount directly, through your third party it will only be 8%). In reality there’s not really a good reason anymore to not direct bill and your AE should be able to build the business case for you without third party help.
AWS Marketplace
While not a direct discount, in conjunction with the EDP, this can be a valuable tool to increase your overall discount on AWS. The AWS EDP allows a certain amount of the spend commit to be retired through AWS Marketplace purchases. So while not a direct discount, by running as much spend as possible through your AWS bill, you can increase your overall AWS discount by increasing your AWS spend commit to include these marketplace purchases.
Pro Tip: Your AWS AE is an ally in saving you money. The more they understand the tools and services you use – even those beyond AWS – the more they can advocate for and help identify these potential savings. By understanding your other vendor purchases, they can help identify what can be purchased on the Marketplace and then further use that information to advocate for the larger commitment agreement and discount through the EDP program.
Rate Cards
Heavy usage of a service like S3 can be further optimized by the use of a Rate Card. By committing to usage and growth on the service for a period of time, AWS is able to offer a significant discount. For storage services with predictable growth levels, this can be useful.
Pro Tip: S3 rate cards need to be carefully looked at as Glacier Deep Archive charges are handled differently. Unlike other discount programs, rate cards are generally “use it or lose it”, and there is no rollover allowed. So rate cards should be developed more conservatively.
POC Credits
It’s not unusual for AWS to push a new service. They want you to try the latest features and services they think can help you. When this happens, or if there is a new service you want to test out, it’s appropriate to ask for some POC credits. While there are internal minimums they will be looking for (expected size of the final production environment if the POC is successful), and limits on how many of these POCs they are willing to fund, it can help defer significant costs for validating the technology.
Pro Tip: Again another reason why your AWS AE should be aware of what you are working on. They cannot advocate for you and get you funding without knowing what is going on. Counterintuitively, the AE’s job is not to get you to spend more money – you’ll do that on your own just fine. Their job is to facilitate your usage of AWS and build that long term relationship. They’ll give you the first bump for free, so don’t leave it on the table.
Incentive Programs
I can write a whole article on each one of these so I’ll group them here in aggregate for now. AWS offers incentive programs periodically when they want to encourage you and facilitate you to do some particular action. More recently it’s been Migrations and Graviton conversions. Programs like these are designed to offset service costs and potentially even labor costs (in the case of MAP) to help companies streamline modernization efforts. These programs can offer significant savings and I’ll discuss these in a future article.
Conclusion
In addition to actual technical optimization of services, AWS has many procurement level options for companies to take advantage of to begin the cost savings exercise. The biggest advice for any of this is to communicate with your AWS account teams as they can help facilitate the savings. Good AEs want to save you money. What they want in return is just long term commitments (at least 1 year depending on the program but up to 3 or 5 in some cases). If you’re moving to AWS or are already on AWS, the chances you’re shifting to another platform overnight are low. So the commitments they want are really a low effort ask. There are a lot more benefits than risks treating your AE as an advocate than as an adversary that is trying to take all your money (you’ll do that anyways when your developer deploys a runaway EC2 cluster).