Most companies are overspending on AWS by 30-60%. Here are 10 strategies that actually move the needle, with real cost impact estimates.
1. Right-Size Your Instances
The #1 waste: oversized EC2 instances running at 5-15% CPU utilization.
How to check: AWS Compute Optimizer or CloudWatch metrics for CPU/memory over 14 days.
Typical savings: 30-50% on compute costs.
2. Reserved Instances & Savings Plans
If you run workloads 24/7 and still pay On-Demand, you are leaving money on the table.
- 1-year no upfront: ~30% savings
- 1-year all upfront: ~40% savings
- 3-year all upfront: ~60% savings
Rule of thumb: If a workload has been running for 3+ months and will continue, commit to at least a 1-year Savings Plan.
3. Spot Instances for Fault-Tolerant Workloads
Spot Instances are 60-90% cheaper than On-Demand. Perfect for:
- CI/CD build runners
- Data processing jobs
- Dev/staging environments
- Batch processing
Not suitable for: Production databases, stateful applications, single-instance workloads.
4. S3 Intelligent-Tiering
Stop manually managing S3 storage classes. Intelligent-Tiering automatically moves objects between access tiers.
Cost: Small monitoring fee ($0.0025 per 1,000 objects/month) but saves 40-70% on infrequently accessed data.
5. Delete Unattached EBS Volumes
Orphan EBS volumes are silent cost killers. Every unattached volume is burning money.
Typical finding: 10-30% of EBS volumes are unattached. Delete them.
6. Use Graviton (ARM) Instances
AWS Graviton processors offer up to 40% better price-performance vs x86.
Switch from m5.xlarge to m7g.xlarge for the same workload at lower cost. Most Linux workloads run without changes.
7. Review NAT Gateway Costs
NAT Gateways charge $0.045/hour + $0.045/GB processed. A busy NAT Gateway can cost $500+/month.
Alternatives:
- VPC endpoints for S3/DynamoDB (free data transfer)
- NAT instances for low-traffic environments
- Review if resources actually need internet access
8. Set Up AWS Budgets and Alerts
If you are not monitoring, you are overspending. Set alerts at 50%, 80%, and 100% of your target budget.
9. Clean Up Old Snapshots
EBS snapshots accumulate over time. Each one costs $0.05/GB/month. Find and delete snapshots older than 90 days.
10. Use Auto Scaling Properly
Do not run fixed instance counts. Use target tracking scaling:
- Scale based on CPU (target 60-70%)
- Scale to zero in dev/staging during off-hours
- Use scheduled scaling for predictable traffic patterns
Typical savings: 20-40% on compute for variable workloads.
The Bottom Line
Implementing all 10 strategies typically yields 30-60% reduction in AWS spend. Start with #1 (right-sizing) and #2 (Savings Plans) for the biggest immediate impact.
What is your biggest AWS cost challenge? Drop a comment below.
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