Quality Assurance and Project Management

Jul 28 2017   11:07PM GMT

Cost Optimization From Pay As Per Provision To Pay Per Use

Jaideep Khanduja Jaideep Khanduja Profile: Jaideep Khanduja


Cost Optimization is moving from what you pay as per provision to pay per use. Like, earlier you had to pay as per provision irrespective of how much of that provision are you going to utilize. But gradually the things are turning more in favor of the consumer and seller has to change the costing, delivery, and service patterns as per customer requirement. Hence, now the stage has come where in most of the cases you have an option to pay per use rather than the complete contractual amount. Of course, pay per use will not work in cases where your utilization is higher. Optimization can happen in many areas like billing consolidation, removing resources that are not in use, match usage to the storage class, right-sizing before migration. But some areas are difficult to achieve like planning/architecting for cost before migration, instance on-off to meet test-staging work hours, reserved instances.

Cost Optimization

Photo credit: SEOPlanter via VisualHunt / CC BY

Still tougher to achieve are spot instances, instance scaling to meet external demand, right-sizing after migration. As a matter of fact, the scope of optimization is always there. Because the conditions don’t remain same in terms of delivery, consumption, and upkeep. The variation itself calls for observation and evaluation on regular intervals.

Cost Optimization Is A Regular Activity

There was a mention of five pillars of cost optimization during recent AWS Startup Day as below:

  • Right sizing your instances – CPU, RAM, performance requirements
  • Increase elasticity – Automation of start and stop can happen on the basis of access control system. Tagging is important for elasticity and rightsizing. Setting appropriate alerts is important in those cases. In fact, when we talk about tagging, it can happen on the basis of Business tags, technical tags, etc.
  • Pick up right pricing model – Like, three pricing models by AWS are – on demand, reserved, and spot. First one is for spiky workloads, the second is for committed or baseline.
  • Match usage to storage class
  • Measuring and monitoring – There has to be a mechanism in place that you are able to sustain including
  • Cost review process
  • Definition of policies

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