Organizations frequently deploy Amazon EC2 instances without carefully considering the most cost-effective and performance-optimized instance types. This policy ensures that machine types are restricted to meet your organization’s specific requirements, driving both cost efficiency and operational performance.

Detailed Explanation

Why This Policy Matters

Selecting the right EC2 instance type is crucial for:

Cost optimization

Performance efficiency

Resource alignment

Predictable cloud spending

Cost Reduction Potential

Implementing a strategic instance type selection can lead to significant cost savings:

• Potential savings range: 20-40% of compute infrastructure expenses

• Annual impact: Can reduce cloud spending by tens to hundreds of thousands of dollars for medium to large organizations

Cost Savings Examples

Small Workload (10 instances)

Switching from r5.2xlarge to r5.large

Estimated annual savings: $24,000

Reduced monthly cost from $2,000 to $800 per instance

Medium Enterprise (50 instances)

• Optimizing instance families across development environments

• Potential annual savings: $120,000 to $200,000

Implementation Guide

Infrastructure-as-Code Restricting Instance Types Example (Terraform)

variable "allowed_instance_types" {

type    = list(string)

default = [

"t3.medium",

"c5.large",

"m5.xlarge"

  ]

}

resource "aws_instance" "example" {

• Enforce allowed instance types

• instance_type = contains(var.allowed_instance_types, var.selected_instance_type)

? var.selected_instance_type

: var.allowed_instance_types[0]

}

Manual Implementation Steps

Inventory Current Instances

Document all existing EC2 instance types

Analyze current usage patterns

Identify over-provisioned or under-utilized instances

Define Organizational Standards

Create a allowlist of approved instance types

Consider factors like:

Performance requirements

Cost constraints

Workload characteristics

Implement Controls

Use AWS Service Control Policies (SCPs)

Configure AWS Config rules

Leverage Infracost to prevent and identify non-compliant instances before deployment

Best Practices

Right-size instances regularly

• Use AWS Cost Explorer for recommendations

• Leverage reserved instances for stable workloads

• Implement automated monitoring

Example Scenarios

Scenario 1: Development Environment

Before: Random instance type selection

After: Standardized t3.medium instances

Result: 35% cost reduction, improved predictability

Scenario 2: Production Workloads

Challenge: Performance-critical applications

• Solution: Carefully selected compute-optimized instances

• Outcome: Better performance, controlled costs

Considerations and Caveats

Potential Limitations:

• Some specialized workloads might require specific instance types

• Performance testing may be necessary

• Migration costs should be evaluated

Frequently Asked Questions (FAQs)

How often should we review instance types?

Recommend quarterly reviews to ensure ongoing optimization.

Can this approach work for all workloads?

No. Critical or specialized applications might require custom configurations.

What tools can help with instance type optimization?

AWS Cost Explorer, AWS Compute Optimizer, Infracost (for pre-deployment analysis)

How quickly can we see cost savings?

Typically within 1-2 billing cycles after implementation.

Is this policy supported in Infracost?

Yes! This policy is fully supported in the Infracost free trial, allowing you to scan your infrastructure and identify optimization opportunities instantly.