AWS gives businesses several ways to manage cloud spending, but it does not reduce costs automatically. Every hour of compute, gigabyte of storage, and network request can add to the bill. Without regular checks, businesses can end up paying for resources they no longer need.
This guide covers five ways to reduce AWS costs, explains what each change can fix, and ends with a point UAE businesses should consider. Keep your latest AWS invoice open as you read.
Why AWS Bills Keep Growing
AWS bills often grow as businesses add customers, store more data, and launch new applications. The problem starts when spending increases without anyone checking why.
Here are four common reasons:
- Untagged resources: When a server has no owner or project tag, it is difficult to know which team uses it. Cost allocation tags must also be activated in AWS Billing and Cost Management before they can be used for cost reporting.
- Test environments left running: Developers may create test servers or clusters and forget to shut them down when they are no longer needed.
- Delayed commitment decisions: Businesses may avoid Savings Plans because they require a one- or three-year commitment. As a result, eligible workloads continue to run at On-Demand rates.
- Unused network resources: A NAT gateway can continue to incur hourly charges while it is provisioned. It also incurs data processing charges for traffic that passes through it.
These costs are easier to manage when someone reviews the bill regularly and takes responsibility for each resource.
Five Ways to Reduce AWS Costs
1. Tag Resources Before Cutting Costs
You cannot easily reduce spending if you do not know which team or project uses each resource.
Start with a small set of tags, such as owner, environment, and project. Apply them consistently to your AWS resources. Then activate the relevant cost allocation tags in the Billing console.
Once AWS processes the tags, you can use Cost Explorer to group spending by team, project, or environment. This helps you identify which workloads account for the highest costs and which resources need further investigation.
What this fixes: Unclear resource ownership and difficulty tracking spending by team or project.
2. Move Infrequently Accessed S3 Data to the Right Storage Class
Old logs, exports, and backups can remain in the same S3 storage class even when they are rarely accessed. Moving suitable data to a lower-cost storage class can reduce storage expenses.
Amazon S3 Intelligent-Tiering automatically moves eligible objects between access tiers based on their usage patterns. It has no retrieval charges, although a monthly monitoring and automation fee applies to eligible objects. Objects smaller than 128 KB are not monitored or automatically moved between tiers. They remain at Frequent Access tier rates without the monitoring fee. <Cite refs={[“turn169652search4″,”turn169652search12”]}/>
Before enabling Intelligent-Tiering, check how often your data is accessed, the size of your objects, and the fees involved. For data with predictable access patterns, another S3 storage class may be more cost-effective.
What this fixes: Paying higher storage rates for data that is rarely accessed.
3. Stop Routing Same-Region S3 Traffic Through NAT Gateways
NAT gateways allow resources in private subnets to connect to external services. AWS charges for each hour a NAT gateway is provisioned and for the data it processes.
If your applications access Amazon S3 in the same AWS Region through a NAT gateway, you may be able to reduce these charges by using an S3 Gateway VPC endpoint instead. AWS does not charge hourly or data processing fees for Gateway VPC endpoints. <Cite refs={[“turn169652search9″,”turn169652search14”]}/>
To make this change, check your route tables and endpoint configuration. Make sure the relevant S3 traffic uses the gateway endpoint instead of the NAT gateway. A gateway endpoint does not cover S3 traffic to other Regions, so cross-Region access needs a separate review.
What this fixes: Unnecessary NAT gateway data processing charges for eligible S3 traffic.
4. Use Savings Plans for Steady Compute Usage
AWS Savings Plans offer lower prices in exchange for a commitment to a specific amount of eligible compute usage per hour over one or three years.
AWS advertises savings of up to 72% against On-Demand rates for EC2 Instance Savings Plans. This is a maximum potential discount, not a guaranteed saving for every workload. The actual discount depends on the plan, term, payment option, and eligible usage. <Cite refs={[“turn169652search1″,”turn169652search7”]}/>
Start by reviewing your compute usage over the past few months. Identify the workloads that run consistently and estimate the commitment that fits your normal demand. Keep changing or unpredictable workloads out of the initial calculation until you understand their usage patterns.
Remember that a Savings Plan commitment is not reduced when your actual usage falls. You may pay for committed usage that you do not fully use, while usage above the commitment may still incur On-Demand charges.
What this fixes: Higher compute costs for workloads that run consistently and qualify for discounted pricing.
5. Set Up Alerts for Unexpected Spending
AWS Cost Anomaly Detection uses machine learning to identify unusual spending patterns and can send alerts by email or Amazon SNS. Its default configuration is available at no additional cost. <Cite refs={[“turn169652search13”]}/>
Enable the service and review the available monitors and alert settings. Choose the AWS services or accounts you want to monitor, and send notifications to a team that can investigate them.
An alert does not automatically stop a resource or reduce your bill. Your team still needs to check the cause and decide what action to take.
What this fixes: Delays in spotting unexpected increases in AWS spending.
Why the Order Matters
Buying a Savings Plan may seem like the quickest way to reduce your AWS bill. However, a discount does not solve the problem of unused or oversized resources.
If you commit to a certain level of compute spending before removing waste, you could end up paying for capacity your business no longer needs. The commitment continues even when usage falls below the agreed amount.
Start by identifying resource owners, removing unnecessary resources, reviewing storage costs, and checking network charges. Then assess your remaining compute usage and decide whether a Savings Plan makes sense.
Cost alerts are useful throughout this process. They help you spot unusual spending, but you still need to investigate the cause and take action.
Review Your AWS Bill Today
You can start with a 30-minute review of your AWS billing data.
- Open Cost Explorer and group the previous month’s spending by service. Note the five services with the highest costs.
- If your cost allocation tags are active, group spending by owner or project. Check how much spending remains unallocated.
- Review NAT gateway charges and investigate whether same-Region S3 traffic is passing through them.
- Check your largest S3 buckets, their storage classes, and the typical size and access patterns of their objects.
- Review your compute usage over several months. If usage is stable, compare the available Savings Plans recommendations with your current On-Demand costs.
This review will not identify every possible saving, but it gives you a clear starting point for further investigation.
One Important Check for UAE Workloads
Businesses operating in the UAE may need to consider data residency alongside cloud costs.
AWS opened its Middle East (UAE) Region, me-central-1, on 29 August 2022. The Region has three Availability Zones and allows businesses to run workloads and store data in the UAE. <Cite refs={[“turn169652search0″,”turn169652search8”]}/>
AWS prices vary by Region and service. Use the AWS Pricing Calculator to estimate the cost of running your workload in the UAE Region and compare it with other options where your business requirements permit.
Choosing the lowest-priced Region is not always suitable if your data must remain in the UAE. You should also review applicable legal, regulatory, backup, and disaster recovery requirements before changing where data is stored or processed.
If you are looking for an AWS partner in UAE, ask for a review of your current AWS spending before agreeing to any changes. WebCastle’s AWS consulting team in Dubai can review your existing setup and identify areas that may need attention.
Request an AWS Cloud Cost Review
Contact WebCastle Technologies to discuss an AWS cloud cost review. Share your latest AWS invoice and explain your main concerns, such as rising storage costs, unused resources, or high compute charges.
The review can help you understand where your money is going and which changes are worth considering. You can then decide which changes to make based on your budget, workload, and business requirements.
