Cloud & DevOps (Azure/AWS) FinOps Cloud Costs Cost Optimization

Cloud Cost Management & FinOps

Mind Map Summary

  • Topic: Cloud Cost Management & FinOps
  • Core Concepts:
    • FinOps: A cultural practice and framework that brings financial accountability to the variable spend model of the cloud, enabling organizations to get the most value from their cloud investments.
    • Rightsizing: The process of matching instance types and sizes to workload performance and capacity requirements at the lowest possible cost.
    • Spot Instances: Unused EC2 instances that are available for less than the On-Demand price. They can be interrupted by AWS with two minutes of notice.
    • Budgets and Alerts: Setting spending limits and receiving notifications when costs exceed a certain threshold.
    • Tagging: Applying metadata to cloud resources in the form of key-value pairs to track and allocate costs.
  • Cost Optimization Strategies:
    • Reserved Instances (RIs) and Savings Plans: Committing to a certain level of usage for a one- or three-year term in exchange for a significant discount.
    • Autoscaling: Automatically adjusting the number of instances in response to demand.
    • Data Transfer Costs: Minimizing data transfer costs by using a CDN, compressing data, and choosing the right regions.
    • Storage Tiering: Moving data to lower-cost storage tiers as it becomes less frequently accessed.

Practice Exercise

Analyze a sample cloud bill or usage report. Identify the top three cost drivers and propose specific, actionable recommendations for reducing the cost of each one (e.g., ‘Switch this EC2 instance from on-demand to a savings plan’ or ‘Implement a lifecycle policy on this S3 bucket’).

Answer

Sample Cloud Bill Analysis:

ServiceCost
EC2$5,000
S3$2,000
RDS$1,500
Other$500
Total$9,000

Top Three Cost Drivers and Recommendations:

  1. EC2 ($5,000):

    • Problem: A large portion of the EC2 cost is from on-demand instances that are running 24/7.
    • Recommendation:
      • Rightsizing: Analyze the CPU and memory utilization of the instances and downsize any that are underutilized.
      • Savings Plans: Purchase a one-year or three-year Savings Plan for the instances with predictable usage to save up to 72%.
      • Spot Instances: Use spot instances for fault-tolerant workloads like batch processing to save up to 90%.

  2. S3 ($2,000):

    • Problem: A significant amount of data is being stored in the S3 Standard storage class, even though much of it is infrequently accessed.
    • Recommendation:
      • Storage Tiering: Implement a lifecycle policy to automatically move data to lower-cost storage tiers like S3 Infrequent Access or S3 Glacier as it ages.
      • S3 Intelligent-Tiering: Use S3 Intelligent-Tiering to automatically move data to the most cost-effective storage tier based on access patterns.

  3. RDS ($1,500):

    • Problem: The RDS instances are provisioned for peak capacity, but are underutilized most of the time.
    • Recommendation:
      • Rightsizing: Analyze the database performance metrics and downsize the instances to a more appropriate size.
      • Reserved Instances: Purchase Reserved Instances for the RDS instances with predictable usage to save up to 69%.
      • Aurora Serverless: Consider using Aurora Serverless for intermittent or unpredictable workloads to automatically scale capacity and save costs.