Cloud costs are a growing concern: Gartner estimates that organisations waste 30–35% of their cloud spend. The good news is that systematic optimisation across compute, storage, data transfer, and licensing can typically reduce bills by 25–40% within 90 days - without reducing capability.
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Quick Wins - Do These First
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Reserved Instances & Savings Plans
| Commitment Model | Typical Discount | Best For | Commitment | Flexibility |
|---|---|---|---|---|
| On-Demand | 0% (baseline) | Unpredictable, short-lived workloads | None | Maximum |
| Savings Plans (Compute) | 53–66% vs On-Demand | Flexible compute usage (EC2, Fargate, Lambda) | 1 or 3 year | Highly flexible - any region/instance |
| Savings Plans (EC2 Instance) | 60–72% vs On-Demand | Stable EC2 in a specific instance family/region | 1 or 3 year | Locked to family/region |
| Reserved Instances (Standard) | 40–60% vs On-Demand | Predictable, stable DB (RDS) or EC2 workloads | 1 or 3 year | Locked to specific type/region |
| Spot Instances | 70–90% vs On-Demand | Fault-tolerant, flexible workloads (ML training, batch) | None (interruptible) | High risk of interruption |
On-Demand
- Typical Discount
- 0% (baseline)
- Best For
- Unpredictable, short-lived workloads
- Commitment
- None
- Flexibility
- Maximum
Savings Plans (Compute)
- Typical Discount
- 53–66% vs On-Demand
- Best For
- Flexible compute usage (EC2, Fargate, Lambda)
- Commitment
- 1 or 3 year
- Flexibility
- Highly flexible - any region/instance
Savings Plans (EC2 Instance)
- Typical Discount
- 60–72% vs On-Demand
- Best For
- Stable EC2 in a specific instance family/region
- Commitment
- 1 or 3 year
- Flexibility
- Locked to family/region
Reserved Instances (Standard)
- Typical Discount
- 40–60% vs On-Demand
- Best For
- Predictable, stable DB (RDS) or EC2 workloads
- Commitment
- 1 or 3 year
- Flexibility
- Locked to specific type/region
Spot Instances
- Typical Discount
- 70–90% vs On-Demand
- Best For
- Fault-tolerant, flexible workloads (ML training, batch)
- Commitment
- None (interruptible)
- Flexibility
- High risk of interruption
Start with Compute Savings Plans
Compute Savings Plans are the most flexible - they apply automatically across EC2 instance families, sizes, and regions. For most organisations, buying 1-year Compute Savings Plans for your steady-state compute spend is the highest-value optimisation.
Cost Allocation Tagging Strategy
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Month: _______ | AWS Account: _______ SPEND SUMMARY Total MTD Spend: $________ vs Last Month: ___% (up/down) vs Budget: ___% (over/under) TOP 5 SERVICES BY COST 1. Service: _________ Cost: $_______ Change: ____% 2. Service: _________ Cost: $_______ Change: ____% 3. Service: _________ Cost: $_______ Change: ____% 4. Service: _________ Cost: $_______ Change: ____% 5. Service: _________ Cost: $_______ Change: ____% OPTIMISATION ACTIONS [ ] Idle resources identified: _______ ($_____ / month savings) [ ] Right-sizing opportunities: _______ ($_____ / month savings) [ ] Storage tiering: _______ ($_____ / month savings) [ ] RI/SP coverage: ___% (target: 70%+) NEXT MONTH FORECAST: $_______
What’s next?