AWS Knowledge
Cut Cloud Costs: Mastering AWS EC2 with PUMP
Piyush Kalra
Sep 7, 2024
In 2023, AWS announced that Amazon EC2 instance comprised a significant portion of their annual revenue of $100 billion. This new model of cloud computing amazes the business world, coming out of nowhere with effective scalability and flexibility. Basically, it means one can scale up or down IT resources almost instantaneously with companies, therefore, being more adaptable to the fast-moving market. However, it is rather tricky to understand an intricate pricing, which not only represents the highest costs within the AWS ecosystem but is also the largest spend on cloud services.
In this article, we will discuss how PUMP can save businesses on their AWS bill by detecting a company's AWS spend, and finding ways that the spend can be optimized. The target users of PUMP are from a very wide range: tech entrepreneurs who want to explore new innovations, founders of startups that run on tight budgets, and even DevOps engineers who work in cloud infrastructure optimization.
Introduction
AWS EC2 and Its Need
The Amazon Elastic Compute Cloud commonly known as the Amazon EC2 is one of the main services in AWS which implements cloud computing by facilitating the provision of a scalable, pay-as-you-go computing power. It allows the fast deployment of applications without the need to buy physical server hardware. Amazon EC2 has a wide selection of virtual machines which meet the needs of all kinds of users - from bloggers with small websites to developers who work on computationally heavy analytics.
We will discuss how PUMP can enable you to carry out successful operations with Amazon EC2. It is worth touching upon various models of EC2 pricing, and how PUMP makes it possible to save on expenses through smart pricing.
Understanding AWS EC2 Pricing Models
On-Demand Instances
This is a payment method where a compute capacity is charged by hour or second without the need to commit for the long run. These are suitable for applications that have variable workloads, giving room to increase or reduce the size as necessary. On the flipside, it is relatively costly as compared to other pricing alternatives
Reserved Instances
Reserved Instances can help in cost reduction for Amazon EC2 services and can reduce up to 75% savings over a year or three years in either of these. These work best on those applications with steady, predictable utilization patterns. There are three types of Reserved instances:
Standard Reserved Instances
Convertible Reserved Instances
Scheduled Reserved Instances
The 3-year Saving Plans (SPs) also come with a 50% discount, so if you are spending $2/hr on SPs, you can effectively use $4/hr of compute.
Spot Instances
Amazon EC2 Spot Instances allow you to bid on the unused EC2 capacity almost at bargain rates, at prices sometimes much lower than on demand rates. This mode of operation does carry great advantages, but it has the disadvantage that the instances can be cut off if the spot price reaches higher than your bid.
Introduction to PUMP
What is PUMP?
PUMP is an automated solution that optimizes AWS cloud costs and represents a significant advancement in AI tools aimed at reducing expenses in cloud computing through AWS spending optimization. It continuously monitors fluctuations in multi-cloud environments and provides real-time insights that users can leverage to enhance their cloud efficiency. Our tools can analyze the past billing history to identify which savings strategies are likely to be the most effective.
Key Features of PUMP
Sophisticated AI: PUMP is integrated with an advanced heuristic, which processes historical and current information to give optimal recommendations as many options as possible. To avoid throwing money ineffectively and at the same time maximize practical utility of the cloud resources, it forecasts and trends price changes.
Consolidated Billing: PUMP brings customers together hundreds of AWS accounts under one billing umbrella to reach group-buying discounts like S3, EBS, and more. This feature eliminates the complexity of the budgeting process but narrows it down to strategic control and provides illustrations for spending that would enable organizations to cut costs.
User-Friendly Interface: Our dashboard is easy to use and requires no coding at all to start seeing savings on your AWS bill in two to three days. All it takes is access to the AWS Management Console
How Much Can Pump Save on AWS EC2?
Thanks to the PUMP model, we analyze a companies AWS EC2 spend for the past 90 days (or more of data) and make recommendations on how best to optimize your AWS cost. If a customer's account is on manual, we surface these recommendations to the customer on the PUMP dashboard. If they are on autopilot, we’ll show the recommendations, and after a few days, we’ll go ahead and optimize their spending with different savings instruments.
For customers who think, can’t they do that on their own? Buying reserved instances takes a lot of time to do the research into the right reserved instance and in most cases, you must commit to 1 or 3 years. With Pump, we can even reserve an EC2 instance for 3 years, and you can use it for 6 months, but if you no longer plan to use it, we can then sell it to another one of our customers in our billing umbrella, and you just saved on an EC2 instance as if you were locked in to a 3 year commitment, but then it was sold in a matter of seconds.
Also, many customers come to PUMP with a few unused EC2 instances. If that’s the case, we have hundreds of customers in our different billing umbrellas. We can sell the reserved instances to one of our customers if they use that specific instance in the correct region, and it doesn’t take any work for you. Instead of listing a reservation on the EC2 marketplace, which takes weeks or months to be picked up, we can do all of this in a matter of minutes.
Cost-Saving Opportunities with PUMP
Trends and Variance of Pricing
To be able to seize the opportunities of cost reduction, PUMP has developed algorithmic solutions that will observe how the pricing of reserved instances change over time and we just launched a new tool called Market, where you can access different prices and cost savings of EC2, RDS, Redshift, OpenSearch, and ElastiCache instances. To add, you can go to Recommendations, where we will surface recommendations based on your spend, and give you the ability to approve / discard these recommendations, to best optimize your spend.
Optimizing Instance Selection
With PUMP, the instance is auto-detected, and advanced AI will bring you targeted recommendations, leading to a tailor-made approach to allocating resources. This helps meet the unique demands better because you will have the optimization for the ultimate cost savings
Setting Up AWS EC2 with PUMP
Implementing AWS EC2 with PUMP is easy and only requires a few steps that will improve the management of your cloud resources:
Run a Savings Estimate: First of all, run a savings estimate with PUMP’s optimization tools. This initial step helps you to evaluate how much you can optimize and helps in establishing your cloud expenditure. You can see how much PUMP can save you on EC2, but also EC2 other, Lambda, RDS, ElastiCache, DynamoDB, OpenSearch, and other AWS services.
Authorize PUMP: Facilitate PUMP to perform its tasks seamlessly by allowing it access to your cloud resources. This may involve changing IAM policies and roles to grant PUMP permission to view your usage details in order to optimize them effectively.
Monitor and Adjust: Manage Network performance metrics as well as the costs that are linked with your Amazon Web Service resources and services. Making frequent changes to adjust the environment based on this data will prevent an encrusted cost structure and enhance your level of savings.
Managing Instances Effectively
There is the need for effective instance management if performance and costs are to be controlled. This practices entail several major practices:
Regular Monitoring: There is also the need for instance performance monitoring and costs showcasing through AWS CloudWatch or other similar tools. There are three main things that can be done frequently, that is, setting up checks, re-establishing procedures, and adding new reports.
Automated Scaling: Capitalize on the PUMP’s potential so that you only provision instances when there is a demand for them and scale down dynamically. This feature ensures that you only take up what is necessary, saving money in periods of less demand and at the same time making sure that there are still services offered in the peak period.
Instance Termination: Take great care that unutilized instances are terminated in due time to prevent excess expenditure. Schedule regular reviews to search for and remove ‘stale’ or barely used instances that can impair your cloud expenses management.
Conclusion
Recap of Key Points
Cloud expenditure for AWS EC2 cost optimization to the maximum possible is a very potent approach that could lead cloud spending to the lowest possible levels. If you educate yourself on various pricing schemas and use PUMP among other systems, you can manage your cloud costs successfully.
Looking Ahead
The cloud cost management industry can grow and develop due to the availability of new technologies and more aggressive pricing strategies. Therefore, getting equipped with the knowledge of what works and what doesn’t will help businesses in achieving cost savings and efficiency out of the cloud in the long-term.
Do you want to understand how to save on your cloud costs? If you choose PUMP, you will quickly learn how to deal profitably with AWS EC2 for very little cost.
