AWS Management Best Practices: Top 9 Cloud Mistakes

Managing cloud costs has become a paramount concern. For DevOps and cloud engineers, this shift in focus means heightened scrutiny of cloud expenditures and increased responsibility for cost management.

Balancing core responsibilities with the complexities of cost control is no easy task. Moreover, there are several common mistakes that can inadvertently inflate cloud expenses, potentially costing companies millions.

To simplify the lives of both business leaders and engineers, we've compiled a list of the top cloud cost pitfalls and provided tips for mitigating them.

Mistake #1: Opting for Expensive Regions

Not all cloud regions are created equal, with up to a 70% price variance on AWS. For example, Frankfurt is 15% pricier than Ireland. AWS operates on an economy of scale, so larger regions with more users tend to be more cost-effective. If feasible for your customers and use case, consider utilizing larger regions to capitalize on these cost savings

Mistake #2: Neglecting Data Transfer Costs

Data transfer fees can add up quickly. When choosing regions, factor in transfer costs between them, as regions in close proximity, like Virginia and North Ohio, often offer discounted transfers.

Mistake #3: Hoarding Unused Resources

Cloud waste cost companies an estimated $147 billion in 2022. Eliminating waste remains a significant challenge for organizations. Common sources of waste include idle Elastic Load Balancers (ELBs) and wasted Elastic IPs (EIPs). Identifying and removing these unused resources is crucial for cost optimization.

Mistake #4: Overprovisioning Cloud Resources

Overprovisioned resources, while not idle, can significantly increase costs. Common culprits include overprovisioned Elastic Block Storage (EBS) and EC2 instances. Right-sizing instances and implementing autoscaling groups can help mitigate this issue.

Mistake #5: Using "Lift and Shift" for Cloud Migration

"Lift and shift" migrations can increase costs by 30%. Instead, consider an application-based approach that assesses whether apps should be phased out, retained as-is, replatformed, refactored, or built from scratch to ensure cost-efficiency from the outset.

Mistake #6: Neglecting FinOps from the Start

Implementing a FinOps (Financial Operations) strategy from day one can yield a 15-25% economic benefit over time. This approach involves planning, setting KPIs, and involving the right stakeholders to ensure cost-efficient cloud usage.

Mistake #7: Incorrectly Tracking Costs

Focusing solely on CapEx instead of OpEx can result in a 20% discrepancy between forecasted and actual cloud expenses. To improve cost tracking, focus on SaaS, IaaS, PaaS, and DaaS expenses and link forecasting to specific business goals.

Mistake #8: Ignoring Kubernetes Costs

Kubernetes costs can escalate quickly, with organizations spending millions annually. Lack of insight into cost drivers is a common issue. Utilize monitoring tools like Datadog and ELK to gain visibility into Kubernetes costs and make informed financial decisions.

Mistake #9: Underutilizing Cloud Discounts

Many organizations struggle to leverage cloud discount programs effectively. AWS offers various discount options, such as Spot Instances, Reserved Instances, and Savings Plans. While each has drawbacks, automation tools can help optimize savings.

In today's tech landscape, managing cloud expenses is an attainable victory. By addressing these common cloud cost mistakes and fostering a culture of financial responsibility, your organization can drive profitability for years to come.