A Practical Guide to Optimizing Your AWS EC2 Instance Sizes

Learn how to select the ideal EC2 instance size to enhance performance and reduce expenses on AWS.

Understanding EC2 Instance Optimization

Optimizing EC2 instances involves aligning the instance type and size with your workload’s performance and capacity needs while minimizing costs. This process, often referred to as "rightsizing," is a critical strategy for managing AWS expenses efficiently.

This guide will walk you through the steps to optimize your Amazon EC2 instances, including best practices and key considerations.

AWS Tools for Cost Analysis and Optimization

AWS provides several tools to help you evaluate and manage costs effectively:

AWS Cost Explorer

AWS Cost Explorer allows you to analyze the costs and usage patterns of your EC2 instances. You can review up to 12 months of historical data and project potential spending for the next 12 months.

With this tool, you can:

Examine spending trends across AWS resources.
Pinpoint areas that require closer scrutiny.
Identify cost-saving opportunities through rightsizing recommendations, such as downsizing or terminating underutilized EC2 instances.

To access these recommendations, navigate to the "Rightsizing" section under Legacy pages in the Cost Explorer interface.

AWS Budgets

AWS Budgets is a proactive cost management tool designed to help you plan and forecast expenses. It sends alerts via email or AWS SNS topics when costs or usage exceed predefined thresholds.

You can use AWS Budgets to:

Set a fixed monthly cost budget to monitor all account-related expenses.
Create a variable monthly budget that increases by a percentage, such as 5%, each month.
Establish usage-based budgets to track service limits for specific AWS services.
Monitor Reserved Instances or Savings Plans with daily utilization or coverage budgets.

AWS Budgets updates data up to three times daily, with updates typically occurring 8–12 hours after the previous refresh.

Limits:

You can create up to 20,000 budgets per AWS account.
Each budget supports up to five alerts, which can be sent to 10 email subscribers or published to an Amazon SNS topic.
Budget usage is free for non-action-enabled budgets. Two action-enabled budgets are free, but additional ones incur a cost.
AWS requires about five weeks of usage data to generate accurate budget forecasts.

AWS Compute Optimizer

AWS Compute Optimizer analyzes your AWS resources, configurations, and usage metrics to deliver tailored rightsizing recommendations. It helps prevent both over-provisioning (wasting resources) and under-provisioning (compromising performance).

Key features include:

Identifying whether your EC2 instances are running optimally.
Providing recommendations to improve performance and reduce costs.
Offering graphs of recent and projected utilization metrics, sourced from Amazon CloudWatch, which collects logs, metrics, and event data.

By default, Compute Optimizer evaluates the past 14 days of CloudWatch metrics to generate recommendations.

Identifying Application Dependencies

Understanding your application stack’s dependencies is crucial for effective rightsizing. While your application’s structure may vary based on your software distribution model, dependencies typically fall into categories such as compute, storage, networking, and database services.

Key Concepts for EC2 Rightsizing

To optimize EC2 instances, consider the following guidelines:

General Rule: If an instance’s maximum CPU and memory usage remains below 40% over a four-week period, it’s a candidate for downsizing to a smaller instance type.
Under-Provisioned Instances: These occur when an instance’s specifications (e.g., CPU, memory, or network) fail to meet your workload’s performance needs, potentially causing poor application performance.
Over-Provisioned Instances: These have excess capacity in at least one specification (e.g., CPU, memory, or network) while still meeting workload requirements, leading to unnecessary costs.
Optimized Instances: These are perfectly balanced, meeting all workload performance needs without excess capacity. Compute Optimizer may recommend newer-generation instance types for optimized instances to further enhance efficiency.

Best Practices for Ongoing Optimization

Rightsizing is not a one-time task but an ongoing process to maintain cost efficiency. Follow these practices:

Regular Reviews: Evaluate your workloads at least monthly to identify cost-saving opportunities.
Use AWS Tools: Leverage Cost Explorer, AWS Budgets, and detailed billing reports in the AWS Billing and Cost Management console to monitor expenses closely.
Implement Tagging: Enforce tagging for all EC2 instances to track attributes like instance owner, application, and environment, making it easier to manage resources.

Conclusion

Optimizing EC2 instance sizes is one of the most effective ways to control AWS costs. By making rightsizing a regular practice, using AWS’s built-in cost management tools, and enforcing resource tagging, you can achieve significant savings while maintaining optimal performance for your workloads.