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6 cloud cost management tips

Martin Heller | Sept. 27, 2017
Looking to avoid monthly cloud sticker shock? A cloud cost management strategy that makes use of containers, capacity pre-purchases and more will help you contain runaway cloud spending.

Customers have the flexibility to change the Availability Zone, the instance size, and networking type of Standard Reserved Instances. Convertible 3-year Reserved Instances provide additional flexibility, such as the ability to use different instance families, operating systems, or tenancies over the Reserved Instance term.

Azure has a similarly sized VM (fewer CPUs, more RAM) in its general-purpose D32-v3 instance, which offers 32 virtual CPUs and 128GB of memory and costs $1.60 per hour on demand. Azure doesn’t offer reserved instances as such: Instead, it offers an Enterprise agreement with an upfront monetary commitment that lowers the price, although the discount levels are not published.

Google offers an n1-standard-32 VM with 32 virtual CPUs and 120GB of memory for $1.52 per hour with a monthly sustained use discount. You don’t have to commit to extended use to get a sustained use discount: Instead, it is applied automatically to the incremental minutes over the 25%, 50%, and 75% usage levels.

Google also offers a committed use discount for VMs, which you can activate by purchasing commitment contracts for one or three years. Any resources that have committed use discounts applied do not qualify for sustained use discounts. With committed use discounts, VM prices can be up to 57% less expensive than regular VM prices. Discounts apply to the aggregate number of vCPUs or memory within a region so they are not affected by changes to your instance's machine type. There are no upfront costs for committed use discounts. Committed use discounts are applied to your bill every month. The catch is that you are billed for your commitments whether or not you use them.


Spot and low-priority instances

Amazon EC2 Spot instances allow you to bid on spare Amazon EC2 computing capacity. Since Spot instances are often available at a discount compared to on-demand pricing, you can significantly reduce the cost of running your applications, grow your application’s compute capacity and throughput for the same budget, and enable new types of cloud computing applications.

Spot instances are run when your bid price exceeds the Spot price, and offer 50-90% discounts compared to on-demand instances. With Spot instances, you will never be charged more than the maximum price you specified. While your instance runs, you are charged the Spot price that is in effect for that period. If the Spot price exceeds your specified price, your instance will receive a two-minute notification before it is terminated, and you will not be charged for the partial hour that your instance has run.

If you include a duration requirement with your Spot instances request, your instance will continue to run until you choose to terminate it, or until the specified duration has ended; your instance will not be terminated due to changes in the Spot price. At the moment I checked, a Spot instance for a c4.8xlarge VM with Linux costs $0.3591 per hour in the N. Virginia zone, compared to $1.591 per hour on-demand.

AWS c4.8xlarge Linux (36 CPU, 60GB)CostSavings
On Demand $1.591/hr ---
Spot Instance $0.3591/hr 77%


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