It is essential to understand how to reduce AWS EC2 costs. AWS is everywhere and many organizations are leveraging its power. But with the power of AWS comes the EC2 cost which is undoubtedly a big component of your cloud payment.

It’s a fact that most new startups fail to launch their business because of poor financial management.

Understanding the AWS billing cycle and how it works is critical to keeping your AWS EC2 costs lowering.

In this blog, you will learn about EC2 and effective methods to reduce your AWS EC2 costs without compromising your operations.

Here are 8 Proven Ways to minimize your EC2 costs:

Decide on EC2, ECS, Fargate Or Serverless Archictecture

Instances that can fulfill your applications’ and workloads’ needs. You can do this by evaluating your computing demands. Memory, network, SSD storage, CPU architecture, and CPU count are all factors to consider.

Once you have this information, you should seek an instance that offers the greatest performance for the amount you are willing to pay. It is not hard to discover low-cost cloud instances based on your requirements.

We can use serverless architecture if the REST service or deployment does not rely on the existence of running machines and can be an event driven architecture. We can also set up ECS or Fargate machines with the right size, memory, and storage to scale up or down depending on your needs.


You can save licensing cost with predefined or bulk license management.

Leverage reserved EC2 instances

Reserved Instances are a way to buy EC2 machines for a long term and reduce overall pricing through an agreed discount.

Since a reserved instance is a pre-paid model, Amazon offers a 75 percent drop on the hourly pricing per instance. As a result, the entry-level instance will cost less. The availability of the reserved instance model is likewise higher than that of the on-demand instance.

Why? In a nutshell, it’s because it’s prepaid. As a result, it is pre-booked, allowing Amazon to schedule the time required. Finally, users can sign up for a one-year or three-year commitment to use the EC2 reserved instance.

Leverage GPU Instances

CPUs and GPUs have a significant impact on both cost and performance. You would choose which type is most suitable for your requirements.

For example, if you wish to do machine learning activities on a cloud, you should use modern GPU instances such as the G3 or P3 series. Even though GPUs have a higher cost per hour, GPU instances can dramatically accelerate training time and result in cost savings (as compared to CPUs).

Spot Instances for stateless and non-production workloads

Spot instances can save a lot of money for stateless and non-production workloads. You can save up to 90% off the on-demand pricing and lower your AWS EC2 expenses.

The fact that Spot Instances could be taken before the instance is used and that they are susceptible to change should be noted.

Leverage Tags & Setup Availability times

Understanding the NFR Non-functional requirements of a business can help determine the hours our EC2 machines need to run.

On this basis, we can schedule the machine’s startup and shutdown times and prevent unnecessary running costs and downtime for the devices. You can save money on EC2 by prioritizing some EC2 instances over others.

For Example, You could restrict your search to only production, non-production, and other Instances.

The AWS dashboard and the AWS API are both used to find and optimize instances using tags. Security and compliance are other possible uses for Tags.


The Amazon Web Services (AWS) Auto Scaling mechanism ensures that the appropriate number of Amazon EC2 instances are running to meet the demand of a specific application.

Auto Scaling changes compute performance dynamically based on a predetermined schedule or the current load measurements, increasing or decreasing the number of instances as necessary.

To modify capacity to actual demands, you can use different types of scaling options that Amazon offers. By dynamically reducing the capacity, you can easily save money and prevent waste.

Configure Auto Scaling with precision to maximize cost savings. You can over-provision capacity if you use Auto Scaling for applications that are too big or include too many instances.

EC2 Instances of appropriate size

Right-sizing is adopting an EC2 instance type that is a suitable match for your application or workloads to prevent underutilized resources. To identify the kind of instance necessary, evaluate the number of CPU and memory resources utilized by a certain application. After that, you can choose the instance type and number of instances that are most suited to your needs.

By choosing your size wisely, you can gain also the most of your reserved instance purchases. Once you’ve determined the best configuration for your instance, you can save even more money by signing up for a specific term and obtaining reserved instances.

However, it may be difficult to determine the right size when dealing with unpredictable workloads, and reserved instances are often wasted.

Orphaned Snapshots should be detected and eliminated

As per standard rules, any associated EBS volumes are automatically erased when an EC2 instance is terminated. Any snapshots that are still on S3 and are billing. These expenses might be more than you anticipate.

Most backups are incremental, while the first snapshot captures the whole drive. Additionally, over time, incremental snapshots may need more data storage than the first one. Although S3 is less costly than EBS volumes, you’ll need a strategy for deleting EBS volume snapshots when an EBS volume is destroyed. Over time, this might result in considerable storage cost savings.


Always plan to set up budgets and consume resources within the budget. Custom alerts can also help us realize if we used 50%, 75% or 90% of our limit

Learn more about the AWS cost explorer


The Amazon EC2 service is a great way to get some computing power without having to manage a server. However, you can’t leave an instance running all day and night without paying for it.

For one thing, it’s not free! Common problems with EC2 costs include tracking reserved instances with unused hours, underutilized and idle EC2 instances, and migration of EC2 instances from a previous generation. Oversizing and inefficiency of the system bring their own set of challenges.

Finally, there are numerous ways to lower your EC2 costs. By following the tips in this article, you can resolve the above challenges, save money and improve your efficiency.The cost of an EC2 instance is based on the instance configuration associated with data processing needs. Successfully minimizing EC2 expenses is reliant on the balance between the cloud computing needs to process corporate data and the quantity of the data that is being processed.
To reduce your EC2 costs, get in touch with us. Making the best choice for your tools will be easier for you with our expertise.

Get in touch with us

Related Blog

Posted in Case Studies