Cost optimization refers to the practice of effectively managing and reducing expenses associated with your cloud-based infrastructure deployments. IaC offers several strategies and benefits for achieving cost optimization:

  • Resource right-sizing: IaC allows you to provision infrastructure resources precisely according to your requirements. You can define the size and capacity of resources, such as virtual machines (VMs), databases, and storage, based on the actual workload needs. By avoiding over-provisioning, you can save on unnecessary costs. Here’s an example to illustrate the concept.

Let’s say you have a web application that experiences varying levels of traffic throughout the day. During peak hours, you expect higher user activity, and during off-peak hours, the traffic is much lower. Without IaC, you might manually provision a fixed number of VMs to handle the maximum expected load during peak hours. This could result in over-provisioning during periods of lower demand, leading to wasted resources and increased costs.

With IaC, you can dynamically adjust the infrastructure based on the workload. For example, using a tool such as Terraform or AWS CloudFormation, you can define your infrastructure requirements in code. Here’s a simplified Terraform example:
resource “aws_instance” “web_server” {count         = var.instance_countinstance_type = “t2.micro”ami           = “ami-xxxxxxxxxxxxxx”}
variable “instance_count” {default = 3}

In this example, you define an AWS EC2 instance with a specific instance type and AMI. The count parameter allows you to easily scale the number of instances based on the workload. During peak hours, you might increase the instance_count value to handle more traffic, and during off-peak hours, you can decrease it to save on costs.

  • Auto-scaling: IaC enables you to set up auto-scaling policies that automatically add or remove resources in response to changing demand. This ensures that you have enough resources to handle traffic spikes without paying for unused capacity during periods of low demand.
  • Resource tagging and visibility: IaC allows you to tag resources for better cost tracking and allocation. By properly tagging resources, you can gain insights into which departments, projects, or teams are consuming resources and allocate costs accordingly.
  • Reserved instances: IaC can help you identify opportunities to purchase reserved instances or reserved capacity, which can lead to significant cost savings compared to on-demand pricing. You can use IaC to automate the procurement and management of these reservations. Here’s an explanation with an example.

Imagine you have an application running on AWS, and it consists of a fleet of EC2 instances that need to be available 24/7 to handle varying workloads. You can define your infrastructure requirements in code, as explained in the Resource right-sizing list point. Now, let’s say your application has a consistent workload, and you can predict the number of instances you need to run 24/7. With this knowledge, you can leverage reserved instances. Reserved instances involve committing to a 1- or 3-year term in exchange for a significant discount compared to on-demand pricing.

IaC allows you to automate the procurement of reserved instances by modifying your infrastructure code to include the reservation details. Here’s an example:
resource “aws_instance” “web_server” {count         = var.instance_count instance_type = “t2.micro”ami           = “ami-xxxxxxxxxxxxxx”lifecycle {create_before_destroy = true}
 reserved_instances {count         = var.instance_countoffering_type = “standard”}}
variable “instance_count” {default = 3}

In this example, the reserved_instances block has been added to specify the details of the reserved instances. offering_type is set to “standard”, indicating a standard reserved instance offering. By incorporating such changes into your IaC code, you can automate the purchase of reserved instances, ensuring that your infrastructure is cost-optimized with long-term commitments that lead to substantial savings over on-demand pricing.

  • Cost monitoring and reporting: IaC scripts can include configurations for monitoring resource usage and cost. You can set up alerts and automated reports to keep an eye on your cloud spending and take corrective actions when costs exceed predefined thresholds.