Executives estimate that approximately 30% of cloud compute spending is wasted. As revealed in the 2024 State of FinOps Report, “reducing waste” became the highest priority for FinOps practitioners this year.
Cloud waste is on the rise, with over-provisioned instances, idle resources, and underutilized services driving up costs unnecessarily. On one hand, organizations face growing pressure to cut expenses, and on the other, they must maintain the performance and efficiency of their critical workloads.
This is where AWS Rightsizing comes in.
AWS rightsizing helps you strike a balance between performance and cost, strategically adjusting your AWS resource allocation to optimize cloud costs while maintaining required performance.
Here, we’ll explain the benefits of AWS rightsizing, steps to find rightsizing opportunities for AWS rightsizing, and best practices to maximize cost efficiency in your AWS environment. Read on!
What Is AWS Rightsizing?
AWS rightsizing is the process of analyzing and adjusting your AWS resources so they’re the appropriate size and type for your workload needs. Ideally, you should be able to match your AWS instances to your workload’s performance and capacity so you can run applications at optimal efficiency without wasting resources.
Think of it as finding that sweet spot where you’re not overpaying for unused CPU or RAM but still have enough “oomph” to run your applications efficiently.
Rightsizing is not a one-time event; it’s an ongoing process, ensuring you’re continuously optimizing as your needs evolve. While it primarily impacts EC2 instances due to their typically higher cost contribution, the concept applies across the AWS service suite, including RDS, ElastiCache, OpenSearch, Redshift, and more. By optimizing your resource utilization, you’ll be running a more efficient cloud environment.
What Are the Benefits of AWS Rightsizing?
AWS Rightsizing helps businesses achieve a balance between cost optimization and performance by aligning cloud resources with actual workload requirements. Here’s how it adds value:
Cost savings
One of the biggest and most immediate outcomes of rightsizing is cost savings, achieved by identifying and addressing inefficient resource allocations. For example:
- An oversized EC2 instance running at only 20% capacity could be adjusted to a smaller instance type, such as moving from m7i.4xlarge to m7i.2xlarge.
- Idle instances, like a development server running 24/7 but only needed during business hours, might be scheduled to shut down during off-peak times or replaced with an event-driven solution like AWS Lambda.
By continuously optimizing resource utilization, businesses ensure they only pay for what is truly needed, reducing waste and maximizing value without compromising functionality.
Increased application performance and efficiency
If your resources aren’t the right size or type for your workloads, then performance will suffer, leading to wasted capacity, bottlenecks, or slow runtime. For example, an under-provisioned EC2 instance struggling to handle peak traffic can lead to latency and degraded user experience.
Rightsizing identifies such performance bottlenecks and recommends scaling up to a more suitable instance type, like moving from t3.medium to m7i.large, to handle increased demand. By eliminating resource mismatches, rightsizing ensures your applications run smoothly, delivering consistent performance while avoiding over-provisioning that leads to waste.
Improved resource management
Properly sized resources simplify resource management by ensuring alignment with workload requirements.
While AWS tools like Compute Optimizer focus on individual instance recommendations, broader strategies such as consolidating multiple underutilized instances into a single larger instance, must be driven by application owners or engineers. This approach requires an understanding of application boundaries, dependencies, and high availability (HA) requirements, which go beyond the scope of Compute Optimizer.
When applied strategically, consolidating resources can reduce the overall number of instances to manage, streamline administrative tasks, and improve visibility into costs and performance. However, these changes require careful planning to ensure they align with application needs and do not compromise redundancy or performance.
Steps for Identifying AWS Rightsizing Opportunities
Effective AWS rightsizing requires a strategic, structured approach. By following these five essential steps, you can identify and capitalize on potential rightsizing opportunities within your AWS environment.
1. Monitor usage and performance
To begin searching for rightsizing opportunities, you must monitor your resource usage and performance.
Start by setting up monitoring tools, like Amazon CloudWatch and AWS Cost Explorer. These tools provide valuable insights into how your resources are being utilized, including metrics such as CPU usage, memory consumption, disk I/O, and network activity. For example, Amazon CloudWatch enables you to track real-time performance, while AWS Cost Explorer highlights cost trends and usage patterns over time.
Specifically, pay attention to key services like Amazon EC2 instances, Amazon S3 storage, and databases, including CPU usage, memory usage, disk I/O, and network throughput.
To gauge your resource usage effectively, it’s important to collect data at regular intervals over time; a single snapshot won’t give you the full picture. You can use AWS Cost Explorer to get a historical view of your data.
Next, as you analyze performance metrics for opportunities to rightsize, don’t forget to document and record your analyses. Keeping a log of your current and past resource usage will help you track trends, plan ahead, and communicate with key stakeholders.
2. Analyze cost and usage reports
To identify further areas that need rightsizing, turn to your AWS cost and usage reports. These reports provide a granular view of your spending and resource consumption across services, regions, and accounts.
Use the AWS Cost and Usage Report (CUR) to identify trends, such as consistently high costs in specific services or underutilized instances contributing to waste. Look for patterns like idle resources, oversized EC2 instances, or underutilized EBS volumes that can be optimized.
For more rightsizing opportunities, pay attention to:
- Reserved Instance (RI) usage: Verify that your Reserved Instances are matched to active workloads. If an RI is underutilized or linked to an instance type no longer in use, consider modifying or exchanging it to better align with your current resource needs, maximizing cost savings.
- Savings Plans efficiency: Check if you’re effectively using Savings Plans. Underutilized commitments or workloads still running on On-Demand pricing could indicate inefficiencies that need attention.
- On-Demand Instances: Identify steady workloads still running on On-Demand pricing. Shifting these to Reserved Instances or Savings Plans can significantly lower costs for long-term or predictable usage.
3. Use AWS Compute Optimizer
Instead of relying solely on manual analysis, take advantage of AWS Compute Optimizer as the primary tool for rightsizing. It analyzes your resource usage, using historical data and performance metrics, to provide actionable recommendations for instance types, sizes, and configurations.
This tool simplifies rightsizing by precluding the need for manual steps described earlier, though manual analysis can still be helpful if you prefer additional validation.
AWS Compute Optimizer offers a streamlined approach to rightsizing, making it a critical tool for optimizing your AWS environment efficiently. Combining this tool with manual analysis ensures a thorough and informed rightsizing strategy.
4. Conduct load testing
Perform load testing to evaluate how your instances respond under stress. This will help ensure you’re not over-provisioning for everyday use but can still handle peak demands.
- Use AWS tools or third-party applications to simulate traffic and user behavior.
- Analyze the response to find out if you can downsize without performance risk.
Conducting load testing with AWS or third-party tools helps you balance everyday efficiency with peak demand readiness, potentially allowing for safe downsizing without compromising performance.
5. Use AWS Trusted Advisor
Leverage AWS Trusted Advisor to receive tailored insights about your environment. It highlights how you can rightsize instances, helping you make informed decisions about your infrastructure setup.
- Comprehensive recommendations: Beyond EC2 rightsizing, Trusted Advisor offers insights into idle RDS DB instances, idle Load Balancers, unassociated Elastic IP addresses, underutilized EBS volumes, and underutilized Redshift clusters.
- Service limits: Check if you’re close to hitting service limits.
- Security: Identify security gaps that could affect performance.
With Trusted Advisor, you can also quantify the opportunity as the Potential Monthly Savings section provides information about the total amount that you can save each month when you implement all recommendations. AWS Trusted Advisor gives you a comprehensive view of your environment and actionable recommendations to optimize costs, enhance security, and improve performance.
6. Evaluate application requirements
Finally, evaluate your application requirements thoroughly. Each application may have unique needs that influence the choice of instance type.
- Performance testing: Ensure instances meet the performance requirements of your apps.
- Performance risk: Balance the need for power versus the risk of underperforming resources.
Remember, rightsizing isn’t just about cutting costs; it’s about aligning your resources to serve your business needs optimally. You can’t afford to overlook rightsizing opportunities, as they reduce overhead and ensure each aspect of your AWS environment is tailor-fit for its purpose.
Common Rightsizing Mistakes
From AWS cost optimization to improved performance and scalability, there are many benefits of AWS rightsizing. But if you jump into rightsizing activities without preparing a strategy or following best practices, you risk making expensive mistakes like:
- Relying on recommendations that overlook utilization spikes:
If you don’t consider utilization spikes in your AWS rightsizing strategy and rely solely on averages, then you risk under-provisioning and setting yourself up for performance issues during future traffic spikes.
- Failing to rightsize beyond compute:
Remember that rightsizing is about more than just compute. To optimize performance and prevent inefficiencies, you also need to consider other components like storage, databases, and networking.
- Overlooking the proper “shape” of your resources:
Pay attention to the instance family to ensure it matches your workload requirements. Different instance families offer varying CPU-to-memory ratios, so select instances optimized for your specific needs — whether it’s CPU, memory, storage, or networking.
- Skipping performance simulations before implementing rightsizing:
Conducting tests is a key step in AWS rightsizing. Without performance simulations, you can’t be sure that your proposed changes won’t cause inadvertent performance downgrades or otherwise disrupt operations.
- Hesitating because of Reserved Instance unpredictability:
Delaying rightsizing decisions due to concerns about RI commitments can lead to ongoing inefficiencies and higher costs. Instead, take advantage of the Standard RI Marketplace to sell the remaining RI commitment to another AWS customer, or for Convertible RIs, plan and execute an RI exchange without any reliance on the third-party marketplace.
Key Best Practices for AWS Rightsizing
Remember that AWS rightsizing isn’t just about slashing costs wherever and whenever you can. Instead, it’s about strategically enhancing your organization’s cloud optimization to maximize savings while achieving optimal performance.
In fact, downsizing isn’t the only way to cut costs. You can also realize savings by converting to Savings Plans, optimizing storage choices, and selecting the right instance types for your workloads.
To find the right balance between cost and performance optimization, follow these best practices for AWS rightsizing:
Start with non-critical instances
Begin the rightsizing process with non-critical workloads to minimize any risk to core business operations. For example, test rightsizing strategies in development or testing environments before applying them to production. This approach allows you to gain confidence in the process and understand the impact of changes without disrupting critical applications.
Make incremental changes
Avoid overhauling your infrastructure all at once. Instead, implement changes incrementally to monitor their effects and ensure they don’t negatively impact performance or availability.
For instance, adjust the size of a single instance or a small group, evaluate the results over a set period, and then proceed to optimize additional resources. This step-by-step approach helps maintain system stability while you optimize.
Embrace automation
With AWS Auto Scaling, you can automatically scale your AWS resources up or down depending on real-time workload demands.
There are two ways Auto Scaling helps optimize your AWS environment. First, it ensures automatic rightsizing during traffic spikes or decreases, maintaining application performance even during disruptions.
Second, it helps reduce costs and prevent resource waste. By only provisioning resources when needed, Auto Scaling helps you avoid overprovisioning, so you don’t end up paying for unused capacity.
Automation not only saves time but also ensures consistency and reduces the chance of human error in the rightsizing process.
Review utilization data frequently
Rightsizing isn’t a one-time activity — it requires continuous monitoring and adjustments as workload demands evolve. Regularly analyze performance metrics like CPU usage, memory consumption, and disk I/O using tools like Amazon CloudWatch and AWS Cost Explorer.
Frequent reviews ensure your resources remain aligned with workload requirements, preventing over-provisioning or under-provisioning as needs change.
How To Implement AWS Rightsizing Recommendations
AWS provides built-in tools like AWS Compute Optimizer and Cost Optimization Hub to simplify the rightsizing process. These tools analyze your resource usage patterns, performance metrics, and historical data to suggest optimal configurations.
The recommendations include detailed insights, such as projected cost savings and potential performance impacts, allowing you to make informed decisions.
To start:
- Visit Billing and Cost Management > Cost Optimization Hub > Savings Opportunities in the AWS Management Console.
- In the Filter search box, select Recommended Action = Rightsize
- Review and evaluate recommendation opportunities based on cost and performance impacts.
- Select a Rightsizing opportunity to pursue, then click Open in the Compute Optimizer console to access detailed recommendations.
- When accessing Compute Optimizer for the first time, opt in using the account you’re signed in with. You can also opt in via the Compute Optimizer API, AWS CLI, or SDKs.
- Test recommended configurations in a non-production environment to validate performance.
- Approve changes manually before automating to avoid unexpected impacts.
- Monitor resource performance using Amazon CloudWatch after implementation.
Maximize Your AWS Cost Efficiency With ProsperOps
AWS rightsizing can transform your AWS environment, helping you achieve peak performance, maximize cost savings, and improve resource management. While native AWS tools are a great place to start your cloud cost optimization efforts, a specialized FinOps automation platform like ProsperOps can help you take your strategy to the next level.
ProsperOps delivers cloud savings-as-a-service, automatically blending discount instruments to maximize your savings while lowering commitment lock-in risk. Using our autonomous discount management platform, we optimize the hyperscaler’s native discount instruments to reduce your cloud spend and place you in the 98th percentile of FinOps teams.
This hands-free approach to AWS cost optimization can save your team valuable time while ensuring automation continually optimizes your AWS discounts for maximum Effective Savings Rate (ESR).
Make the most of your AWS cloud spend with ProsperOps. Schedule your free demo today!
