Report: AWS Customers Overpay $6.4 Billion each Year. Cloud computing users collectively rack-up $10 billion in unnecessary costs each year, with Amazon Web Services (AWS), being the largest money drain. RightScale, a cloud resource management company, released data earlier in the month based on customers’ cloud spending. The company found that about 35 percent of a cloud customer’s average bill is spent on waste, five percentage points more than the self-reported estimates. Overspending is a problem for all three major cloud platforms: AWS (Microsoft Azure), Google Cloud Platform (GCP), and AWS (Azure). AWS is the largest platform by market share and therefore it’s no surprise that it contributes the most to this waste. RightScale found that $6.4 billion of the $10 billion annual waste on the three platforms was attributed to AWS. Kim Weins, vice-president of Cloud Cost Strategy at RightScale stated that cloud providers are improving their ability to help companies reduce their cloud spending in a prepared statement. Weins was partly referring back to Andy Jassy, AWS CEO, who claimed that AWS has saved its customers $500,000,000 in unnecessary costs during October’s Gartner Symposium. Weins stated that this amount is “just a drop in a bucket” based on RightScale findings. RightScale says that cloud spending can be difficult for organizations because vendors often have complex pricing or billing models that are difficult to understand. The company pointed out that AWS offers over 70,000 price points for its instances. Vendors offer a wide range of discount plans that, while intended to lower costs, add complexity. AWS offers reserved instances with more than 90% of the price points for instance prices being for different discount options. Azure just announced reserved instances. Surprise! They work differently to those on AWS. Weins explained that Google has its own method of discounting, with automatic sustained use discounts as well as committed use discounts.” Their billing models are complex and vendors are constantly announcing price reductions and new services, which can cause instability in the invoices. AWS has introduced several pricing options in the last two months (see examples here. here. here. here. and here.) As well as new instances that come with their own price tags (examples are here, here. here. and here). RightScale also identified “decentralized cloud use within organizations” as a major source for unnecessary spending. Cloud-based services are now easier to deploy for employees and non-executive department heads, often without the need of approval from higher-ups. This agility can be a boon for company productivity, but it also makes it more difficult to keep costs under control. Weins stated that “[T]he provisioning teams often have no reason to ensure efficient use of cloud resources.” “Prices for individual VMs and resources may seem low, but it is only when cloud usage has increased and cloud spend becomes more significant that organizations realize how much waste they are creating.” RightScale suggests three ways organizations can reduce their cloud waste.

  • You can take advantage of the reserved instances
  • To ensure that instances are not sitting idle or over-provisioned, keep an eye on them. Take advantage of the lower instance prices in nearby areas whenever possible.
  • Clear out any unused snapshots or disks from your cloud storage.