1.5-cost-optimization-and-visibility

1.5 Cost Optimization & Visibility

Visibility Tools

AWS Cost Explorer

• Function: Historical analysis (up to 12 months) and forecasting (up to 12 months).
• Granularity: Daily or Monthly (Hourly requires enabling and extra cost).

AWS Budgets

• Function: Alerts when costs or usage exceed thresholds.
• Action: Can trigger Actions (stop EC2, apply SCP) via Chatbot/SNS.

Cost Allocation Tags

• User-Defined: Must be activated in the Billing Console before they appear in reports.
• AWS-Generated: createdBy tags (must also be activated).

Purchasing Options (Cheatsheet)

Option	Term	Discount	Flexibility
Standard RI	1 or 3 yr	High (up to 72%)	Low (Can’t change family/OS)
Convertible RI	1 or 3 yr	Medium (up to 54%)	Medium (Can change family/OS)
Savings Plans (Compute)	1 or 3 yr	High (up to 66%)	Highest (EC2 + Lambda + Fargate, Any Region, Any Family)
Savings Plans (EC2)	1 or 3 yr	Highest (up to 72%)	Low (Specific Family + Region)
Spot Instances	N/A	Max (up to 90%)	None (Can be interrupted with 2 mins notice)

WARNING

Exam Gotcha: Compute Savings Plans apply to usage across any region. EC2 Instance Savings Plans are locked to a specific region.

Rightsizing

• AWS Compute Optimizer:
  • Scope: EC2, Auto Scaling Groups, EBS Volumes, Lambda functions.
  • Data: Uses last 14 days of CloudWatch metrics (CPU, Memory, Network, Disk).
  • Requirement: Needs CloudWatch Agent for Memory metrics to give accurate recommendations.

WARNING

Exam Gotcha: Compute Optimizer recommends based on historical data. It does not predict future load spikes that haven’t happened yet.