5 Tips for Reducing Spend to Meet AWS Budget Targets

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The essential requirements for AWS cost management are monitoring your AWS costs and usage, analyzing your usage patterns, and optimizing your cloud resources for maximum performance. You will need to proactively and continuously manage this process to stay within budget.

To monitor and analyze your AWS costs and usage you can use AWS Cost Explorer. This tool allows you to identify which services generate the highest costs within each of your linked accounts. You can view the reports at the hourly and resource level and review resources that generate the highest costs.

In this article we will summarize the key strategies for AWS cloud cost reduction, mainly focusing on compute and dbase services.

1. Set up a budget with AWS Budgets

Once you have a view into your AWS costs and usage, you can set up a budget using AWS Budgets. The tool lets you set notifications to alert when your costs or usage exceeds your budgeted amount.

What different types of budgets can you create?
You can set AWS Budgets to track costs by AWS service, linked account, region and tag, at monthly, quarterly, yearly intervals. You can set budget alerts for actual and forecasted costs to reduce AWS billing.

2. Rightsize Amazon EC2 instances with low utilization

AWS Cost Explorer allows you to identify EC2 instances with low or no utilization. You can reduce costs by stopping these instances with AWS Instance Scheduler. You can also downsize or resize instances within an instance family or across instance families by using AWS Compute Optimizer.

3. Optimize dbase utilization of Amazon RDS and Amazon Redshift instances

If you don’t require 24×7 access to your database during testing and development, you can stop and start Amazon RDS instances for up to 7 days at a time. Likewise, if you need an Amazon Redshift cluster for a short period of time at frequent (or infrequent) intervals, you can pause and resume Redshift instances to suspend billing and reduce costs. AWS Trusted Advisor can help you identify dbase instances with low utilization for up to 7 days.

4. Use Reserved Instances to reduce compute and dbase usage costs

Reserving instances 1 or 3 years in advance will save up to 60% compared to on-demand pricing. AWS Cost Explorer provides recommendations for RI purchases based on your EC2, RDS, Redshift, ElastiCache and Elasticsearch usage. There are different types of payment options offered by AWS, but we recommend a partial upfront payment for a sizable discount without the long term commitment, which will provide a break-even point within 7 to 9 months.

In addition, if you purchase a large volume of EC2 RIs, you will receive discounts on upfront fees and hourly fees for future purchases. RI volumes of up to $4 million will generate 5%, RI volumes between $4million-$10 million will generate 10% off upfront and hourly rates. Parquantix will negotiate larger volume discounts with AWS for you.

You can use AWS Budgets to set targets for Reserved Instance utilization or coverage for Amazon EC2, Amazon RDS, Amazon Redshift, Amazon ElastiCache, and Amazon Elasticsearch reservations. You can set up alerts to notify when your utilization falls below defined targets.

One of the main benefits of using Reserved Instances is the ability to sell unused instances in the AWS Marketplace and take advantage of new generation instance types. This option provides flexibility and recovers costs for resources that are no longer needed.

5. Use Compute Savings Plans to reduce AWS Fargate and Lambda costs

Compute Savings Plans provide up to 66% discount on AWS Fargate, and up to 17% discount on AWS Lambda usage compared to on-demand pricing, for a commitment of specific dollar volume of usage. It automatically applies to EC2 instance usage across all attributes, regardless of instance family, size, Availability Zone, region, OS or tenancy. We recommend a 1-year Compute Savings Plan to layer on top of your reservations for maximum savings. AWS will apply your reservations first, and then apply the Savings Plan discounts. Our article on AWS pricing gives you a comprehensive overview to help you choose the best pricing option for your application needs on the AWS cloud.

Parquantix will utilize the optimal mix of RIs and Savings Plans to meet your budget requirements in the cloud. View our website to learn how.


There is no doubt that AWS cost reduction strategies involve utilizing a large portfolio of AWS cost management tools, some for an extra charge, for a multitude of tasks: Budgeting, continuously monitoring usage, adjusting resources, purchasing and managing multiple pricing plans. Toggling among these stand-alone tools consumes considerable time and effort that requires a dedicated resource, which many companies cannot afford. Our automated solution does it all for you, so you can focus on what matters most: Developing and running your applications in the cloud.

Automated AWS Cost Optimization with Parquantix

Can you automate cost management to meet AWS budget targets?
Our solution is automated to manage your AWS costs to maximize savings and performance. The tool is customized based on a minimum 4-months of data from your AWS Cost and Usage Reports. It monitors usage hourly, and adjusts AI-driven algorithms in real time to optimize resources to meet your budget targets.

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