Introduction

‍This article summarizes AWS cost optimization in 2022, focusing on session information from AWS Re:Invent, which was held for the first time in about three years in 2022.

What You Can Learn from This Article

• A list of cost optimization sessions held at AWS Re: Invent in 2022.
• Types and methods of AWS cost optimization as of 2022 (overview level).This article aims to be useful for those facing challenges in AWS cost optimization.

Summary of Cloud Cost-related Sessions at Re:Invent 2022

‍AWS Re:Invent, which had been held online in 2020 and 2021 due to the coronavirus pandemic, was held as a regular event this year for the first time in about three years. It became a massive event with over 60,000 attendees. Over 1,500 sessions were held during the five-day event, and some key topics on cost optimization are summarized below.

The COP (Cloud Operations) category includes sessions fundamentally related to cost, with the following sessions focused primarily on costs:

• (COP203) Manage and control your AWS costs
• (COP205) Simplify your AWS cost estimation
• (COP207) Moving from paying for what you use to what you need
• (COP202) Cloud metrics strategy and customizable billing
• (COP208) Optimize other services
• (COP217) Ways to avoid cost surprises
• (COP218) Measuring your cloud unit economics
• (COP307) Track and visualize your AWS cost and usage KPI targets
• (COP335) Customize billing and cost reporting with AWS Billing Conductor
• (COP336) Visualize, understand, and manage your AWS costs

Reference URL: AWS re:Invent 2022 Cloud Financial Management program preview

In addition to the above sessions, multiple cloud cost-related sessions were held. Compared to last year's online event, there seems to be an increased importance placed on costs. While sessions in the past three years primarily focused on resource visualization, management, and transparency, this year there was an increase in services focused on FinOps and Cloud Financial Management (*2), giving a strong impression that AWS is now focusing more on cloud optimization solutions as opposed to just cloud migration.

About AWS's Proposed Cost Optimization

‍A session discussed the process of cloud cost optimization (cloud optimization journey), which I summarize below.

Agenda:

1. What's necessary for cloud cost visualization
2. Means of cost optimization

What's Necessary for Cloud Cost Visualization

‍The beginning of the session mentioned the importance of understanding the current state for cost optimization. Many companies start with cost reduction measures rather than understanding the current state, leading to an inability to set accurate KPIs and achieve goals. Rick Ochs (Principle Product Manager, Cloud Optimization at AWS) explained the process leading up to cost visualization as the "Cloud Cost Visualization Journey," broken down into stages:

1. Chaos
2. Awareness
3. Safeguards
4. Governance
5. Cloud Optimization

The "Chaos" stage refers to a state where a company does not understand the cloud costs appropriate for their business. It's a stage with no direction, including selecting cloud services and setting KPIs for cloud operations. From there, "Awareness" begins to develop as experts in cloud become more prevalent, with services, projects, and departmental goals becoming clearer. "Safeguards" involve compliance and security improvements from a company's perspective based on past initiatives and knowledge. Many companies move to the next stage with the support of AWS and partners due to the difficulty in adapting to this stage.

In "Governance," management of tags and the introduction of Organization Units help understand the relationship between services used by the entire organization and business. Finally, the journey moves to the "Cloud Optimization" stage. By passing through these stages, a company can build an infrastructure that is optimal for its business while performing cloud optimization.

Means of Cost Reduction

‍Once a company understands the best way to use the cloud for their business, there are four main methods for optimization:

1. Cost reduction through discount options
2. Elimination of unused resources
3. Optimization of resources
4. Stopping resources

The expected reduction rates for each method are as follows:

• 30%: Cost reduction through discount options
• 20%: Optimization of resources
• 20%: Stopping resources
• 5%: Elimination of unused resources

The total of the reduction methods is 65% instead of 75% because some target resources overlap. It's important to choose the right method according to the environment. For example, for a production environment that continuously uses resources

Production Environment:

Validation Environment:

The methods for cost reduction vary depending on the environment and the services used, but this article summarizes the steps that should be taken and how often they should be reviewed.

As for the order of operations, since optimizing resources can change the target RI and SP to be purchased, it is recommended to first implement resource optimization and stopping of resources. Regarding the frequency of purchasing RI and SP, it is better to go through the cycle of purchase, evaluation, and repurchase as quickly as possible. However, since the optimal solution varies depending on the company, it is recommended to carry out at a frequency that does not become an operational burden.

The author believes that it is important to understand the overall picture and choose the means of optimization according to the situation, as the best solution for cost reduction methods and implementation steps also varies depending on the company. It is good to consider the cost reduction methods that should be implemented in accordance with the current phase of cloud adoption and the cost target values.

For example, to reduce the usage fees of a production environment that is already operating stably, first review the parts that can be optimized in terms of resources, and then consider purchasing RI and SP. Then, review this about once a quarter, and set opportunities to summarize repurchases and reduction effects for operation.

So far, the focus has been on explaining the methods and concepts of cloud cost optimization. In the various sessions held at AWS Re:Invent 2022, the sessions were composed with a focus on the aforementioned cost visualization and cost reduction methods.

The interest in cloud costs is higher than in previous years, as evidenced by the increase in sessions about FinOps. From these points, it is believed that cloud optimization will become a topic of interest throughout 2023. Alphaus Inc. plans to continue providing information centered on cloud cost-related topics, so please look forward to it.

References

‍AWS re:Invent 2022 - Cloud cost optimization: Only paying for what you need (COP207)

AWS re:Invent 2022 Cloud Financial Management program preview