Avoiding Bill Shock — How to Detect and Mitigate AWS Cost Anomalies

Avoiding bill shock ‒ How to detect and mitigate AWS cost anomalies

Particularly during this challenging time, many organizations are facing disruption to their operations, budgets, and revenue. Our customers ask us how they can optimize costs to avoid “bill shock” due to anomalous spikes in the cost of AWS services.

To eliminate surprises in your AWS invoices, nOps cloud management provides machine learning-based detection of billing anomalies (costs in your infrastructure that do not fit typical parameters) by AWS account, region, resource, and employee. It also provides real-time alerts via Slack or email so that you can take immediate action. nOps customers typically attain 15-50% AWS cost savings, of which 23% is typically attributable to the elimination of cloud waste due to unused or underutilized resources.

How AWS charges for services

AWS pricing uses a consumption model — a pay-as-you-go approach. Cost can be based on the size of the resource and/or the amount of time it is up and running. Over-provisioned, underutilized, and unused resources can cause your costs to spike exponentially.

AWS cost optimization best practices

It all begins with having an infrastructure that complies with the best practices guidance of the Cost Optimization pillar of the AWS Well-Architected Framework. It’s about architecting systems to achieve business outcomes at a minimal cost by applying best practices on deploying, scaling, managing, securing, and operating your cloud resources.

AWS cites four best practice areas for cost optimization in the cloud: expenditure awareness, cost-effective resources, matching supply and demand, and optimizing over time.

  • Expenditure awareness: Innovation and fast-paced development/deployment are critical to business growth. How do you optimize cloud infrastructure costs without cratering cloud performance or your DevOps momentum? The first step in cost optimization is expenditure awareness. While the AWS Pricing Calculator lets you explore AWS services and create an estimate for the cost of your use cases on AWS, for proactive cost optimization you need to become better informed about your actual AWS costs. nOps will provide a real-time view of your AWS environment, with instant visibility to changes that affect cost.
  • Cost-effective resources: How do you make sure your capacity matches but does not substantially exceed what you need? Your resources need to be monitored continuously for unused or underutilized resources so that you can take necessary action.
    • nOps will identify unused “zombie” instances (that add cost but no value), gain visibility into CPU utilization patterns (to help you retire and re-engineer servers), and find unused Elastic IPs, unattached Amazon Elastic Block Store (Amazon EBS), and AWS Elastic Load Balancing (AWS ELB) with no instance running that can add cost quickly.
    • By rightsizing your workloads, you can avoid wasting spend on unused or underutilized resources. nOps shows CPU utilization patterns to help you rightsize your instances and resources so that they meet your workload performance and capacity requirements at the lowest possible cost.
      • On-Demand for applications with short-term workloads that spike periodically or unpredictable workloads that can’t be interrupted.
      • Amazon EC2 Spot Instances for use cases such as batch processing, scientific research, image or video processing, financial analysis, and testing.
      • Amazon EC2 Reserved Instances (RIs) for applications that have steady-state or predictable usage. nOps provides actionable insights for Reserved Instances (RI) planning that can save you money.
      • EC2 Fleet to automatically launch the lowest-priced combination of resources to meet a defined capacity.
  • Matching supply and demand: The supply of AWS services needs to match the demand for those services at the time they’re needed, to avoid wasteful overprovisioning. If your demand is variable, use a demand-based approach (AWS Auto Scaling or AWS ELB). For workloads with a significant write load that don’t need immediate processing, use a buffer-based approach (Amazon Simple Queue System or Amazon Kinesis). Use a time-based approach for demand that is predictable or well-defined by time (AWS Auto Scaling, AWS APIs, or AWS CloudFormation).
  • Optimizing over time: Measure and monitor your users and applications to perform a gap analysis comparing your system utilization to your requirements. Establish goals and metrics that your company can use to measure its progress. The measures should focus not only on cost but also on the business output of your systems. AWS Cost Explorer and nOps are two tools that can help monitor infrastructure changes and identify spending trends.
    • AWS Cost Explorer is a free tool from AWS that you can use to view charts of your costs. You see patterns in how much you spend on AWS resources over time, identify areas that need further inquiry, and see trends that you can use to understand your costs.
    • nOps extends AWS Cost Explorer to provide billing anomaly detection and notification to eliminate surprises in your AWS invoices with machine learning-based detection and real-time alerts.

Cost optimization needs to be a continuous process

As you may have discovered, cost optimization is not a “one and done” process — your new projects and workloads will add cloud resources, which can drive increased AWS costs due to overprovisioning. It’s challenging to monitor costs manually on a continuous basis. nOps monitors infrastructure changes continuously to optimize resource utilization and cost so that you can eliminate surprises in your AWS invoices.

nOps helps you to track every single change that occurs across your AWS workload and provides insight on who made what change and when the change was made.

The nOps Cost Control Dashboard red-flags cost increases caused by infrastructure changes to workloads on your AWS account.

You can customize your preferences for nOps’ warnings and alerts.

  • Tag keys.
  • Who to notify.
  • Frequency of notifications.
  • How to send notifications (via Slack or email).
  • Forecast billing alarms (when the forecasted bill exceeds a particular set benchmark).
  • Budget alarms (when the bill exceeds the budgeted bill for that month).

In conclusion

To optimize costs to avoid “bill shock” due to anomalous spikes in the cost of AWS services, your infrastructure needs to align with the best practices guidance of the Cost Optimization pillar of the AWS Well-Architected Framework. Cost optimization needs to be a continuous process, which is challenging to perform manually. You can automate this process and eliminate surprises in your AWS bill by using nOps cloud management to:

  • Provide real-time visibility to changes that affect cost.
  • Detect unused or underutilized resources.
  • View CPU utilization patterns to help you rightsize your instances and resources.
  • Deliver machine learning-based detection and real-time alerts.

Want to start gaining sharper visibility to AWS cost anomalies and see how much you can save? Click here to get started with a free 14-day trial of nOps (or click here to sign in to nOps if you’re already a user) and take advantage of its cost control capabilities.