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Sidra Saleem for SUDO Consultants

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How To Reduce Operational Costs With AWS Lambda


In the evolving era of cloud computing, AWS Lambda proves itself to be the pivotal service. It allows developers to run the code without having to manage the overhead of the servers. This serverless computing platform allows applications to auto-scale their workload by running code in response to various events. AWS Lambda’s pay-per-use pricing model also makes sure that you only pay for the compute time you actually consume.

Every business wants to scale their applications along with managing operational costs. But it becomes crucial in maintaining a competitive edge and also ensuring long-term sustainability. By using AWS Lambda, many organizations have reduced their operational costs by optimizing their resources. Even after all this, the efficiency and performance is still maintained.

The main aim of this article is to guide the readers on how to reduce the operational costs with the help of AWS Lambda. In the meanwhile, we will also explore best practices and strategies for leveraging AWS Lambda smartly.

Understanding AWS Lambda

So AWS Lambda is basically a serverless computing service that is offered by AWS. It enables developers to run the code in response to various events. It protects the developers from the pain of managing the servers. Using a serverless execution model helps the developers to handle provision, manage and scale the servers automatically. Through this approach the developers can fully focus on writing the code instead of dealing with other aspects.

Key Features of AWS Lambda

Lambda functions are designed in such a way that they respond to custom events and AWS services. This includes change in data present in Amazon S3 bucket, updating to Amazon DynamoDB table and making HTTP requests using Amazon API Gateway.

AWS Lambda will automatically scale your application by executing the code in response to each trigger. This service manages the infrastructure that runs the code on high-availability compute infrastructure.

With the pay-per-use pricing, AWS Lambda will only charge you for the compute time that you have actually consumed. No charges will be charged unless your code is running. You will be billed according to the duration and requests for your functions.

AWS Lambda vs. Traditional Cloud Service Models

Traditional cloud service models like PaaS and IaaS require developers to manage servers somehow. This process includes provisioning capacity, making sure that the server’s operating system and middleware are updated and last but not the least scaling. On the other hand, AWS Lambda eradicates the need of handling and managing servers. This serverless approach allows developers to invoke the fast release so that their focus remains on the core functionality rather than on the management structure.

Cost Structure of AWS Lambda

AWS Lambda has introduced a model which charges you only for the compute time you have actually consumed. The cost is calculated by keeping in mind two main factors.

Request Count

As the name suggests, you have to pay a base rate for every request made to the Lambda function. A request is counted every time a function is invoked in response to an event.

Execution Duration

The execution duration cost is basically the amount of time your code executes. It is rounded up to the nearest 100 milliseconds. More memory allocation means faster function execution.

Additional Costs

With AWS Lambda you can avail the opportunity to outbound data transfer per month without paying any money. But if you exceed this amount then additional charges may be included. This mostly happens when Lambda functions interact with external endpoints over the internet or with other AWS services.

If you use AWS Lambda with other AWS services then you might end up paying additional charges. So it is important to make sure that no such charges come your way.

Strategies to Reduce Operational Costs with AWS Lambda

All in all, AWS Lambda offers you a cost-efficient solution to run code without having to worry about the management of servers. But proceeding without proper management can cost you a lot and it should be avoided in every situation. You need to look for some ways using which you can optimize your Lambda functions in order to avoid operational costs.

Optimize Lambda Functions

Code Optimization to Reduce Execution Time

The first thing is to streamline your code. It includes refactoring your Lambda function code to be the most efficient. Make use of smart and efficient algorithms, remove unnecessary calls and minimize the use of heavy libraries.

Moreover, train your code to handle the tasks in parallel rather than handling them sequentially. It will reduce the total execution time.

Using the Right Memory Allocation for Functions

If you want to monitor the memory usage and execution time of your Lambda functions then you can use AWS CloudWatch. In case any function is consistently using less memory than allocated, all you need to do is reduce the memory size to lower the cost.

Find the optimal configuration that balance out the performance as well as the cost by periodically benchmarking your Lambda functions with different memory settings.

Periodic Review and Adjustment of Resources

You need to review the Lambda functions along with their configurations regularly. If you come across any unused functions then remove them immediately and try to optimize the existing ones.

In addition to this, set up the billing alerts so that whenever you exceed the cost limit you get a message informing you about the used limit. It will notify you regarding the remaining limit as well.

Efficient Event Management

Choosing the Most Cost-Effective Event Sources

All the AWS services that trigger your Lambda functions need to be evaluated for cost implications. Choose the sources that provide best balance between the cost for your use case and functionality.

Optimizing the Frequency and Method of Triggers

It is also possible to implement logic that controls the rate of event triggers. For example, if a function processes data dumps then make sure it is triggered after the dump is completed. Don’t let it trigger on every file upload.

Monitoring and Analysis

Utilizing AWS CloudWatch to Track Lambda Function Metrics

If you want to monitor the performance and execution patterns of your Lambda functions then don’t forget to use CloudWatch metrics. Moreover, set up cloud watch alarms so that you are notified whenever the metrics cross thresholds.

Analyzing Execution Logs to Identify Cost-Saving Opportunities

Review the execution logs for insights into function performance and behavior. Identify the bottlenecks and errors that could increase the costs unnecessarily.

Use of Reserved Concurrency

Explanation of Reserved Concurrency and Its Impact on Cost

Reserved concurrency guarantees that only a specific number of instances are available for Lambda function. However, it doesn’t reduce the cost always but can help you to manage the costs in a much better way.

Best Practices for Managing Reserved Concurrency Settings

If your functions have predictable workloads then use reserved concurrency for functions. This will ensure that the functions have necessary resources without over-provisioning. Also access the requirements of your applications to avoid setting reserved concurrency higher than actually needed. It could result in unnecessary costs.

Implementing these strategies will require a balance between functionality, performance and cost. For optimizing AWS Lambda function costs, regular analysis, monitoring and adjustments of your application’s specific needs and usage patterns are really important. By carrying out the best practices in Lambda function management, operational costs can be significantly reduced without affecting the high performance.

Implementing Cost-Effective Lambda Functions: Step-by-Step

Step 1 – Analyze Current Usage with AWS CloudWatch

Take a start by monitoring your Lambda function’s performance as well as usage patterns with the help of AWS CloudWatch. Pin point the high-cost functions for the purpose of optimization.

aws cloudwatch get-metric-statistics --namespace AWS/Lambda --metric-name Duration --start-time 2023-01-01T00:00:00Z --end-time 2023-01-31T23:59:59Z --period 3600 --statistics Average --dimensions Name=FunctionName,Value=<your-function-name>

Step 2 – Optimize Code and Memory Allocation

Review the functions for the optimization opportunities. Adjust memory settings based on usage and refactor the code to improve efficiency.

For memory allocation adjustment:

aws lambda update-function-configuration --function-name <your-function-name> --memory-size <new-memory-size>

Step 3: Implement Reserved Concurrency for Predictable Workloads

Having predictable workloads is a plus point because they ensure consistent performance when the reserved concurrency is set.

aws lambda put-function-concurrency --function-name <your-function-name> --reserved-concurrent-executions <number-of-executions>

Step 4: Evaluate and Adjust Based on Monitoring

Now continue to monitor the function executions as well as performance using AWS CloudWatch. Adjust the strategies as necessary based on the insights.

By following the above mentioned steps, you can reduce the operational costs significantly along with leveraging the capabilities of serverless computing. AWS Lambda also offers an approach to develop and deploy the applications.

Case Studies: Reducing Operational Costs with AWS Lambda

AWS Lambda is used for so many businesses with the aim of achieving significant operational cost reductions while maintaining the efficiency. Below we have a few success stories which have some kind of lesson to learn from.

The Coca-Cola Company

The great Coca-Cola Company used AWS Lambda with other AWS services to develop its digital vending machine. They wanted to reduce the operational costs.

Strategies Applied

Coca-Cola opted for a serverless backend and developed it using AWS Lambda. It was configured to scale automatically and was able to handle requests over 120,000 vending machines all over the world. It eradicated manual intervention completely. Adopting the serverless architecture allowed Coca Cola to avoid the need of managing and scaling servers which reduced their operational costs.

FINRA (Financial Industry Regulatory Authority)

FINRA used AWS Lambda in order to process and analyze large volumes of data and improving regulatory oversight. They wanted to do this while reducing the costs.

Strategies Applied

FINRA implemented AWS Lambda in order to process 75 billion market events in a single day. This enabled efficient and scalable analysis without the need of managing the servers. Making the best use of AWS allowed FINRA to scale their computing resources dynamically to meet changing requirements. Due to this a large amount of savings was seen in their financial budget.

Thomson Reuters

Thomson Reuters used AWS Lambda to develop content analytics platform. It wanted to enable scalable processing of large datasets but while maintaining the optimized costs.

Strategies Applied

Thomson Reuters built a scalable pipeline for the purpose of content analysis. It was able to process news articles without the need of server management. The serverless model enabled Reuters to align the resource consumption on the basis of demands.

Best Practices for Cost Management in AWS Lambda

So now we know that AWS Lambda offers a transformative approach to build and deploy applications without managing the servers. Along with this, it also provides significant cost savings with operational efficiencies as well. Some of the key strategies and practices are as follows.

Key Strategies and Practices

  • Make sure to write the efficient code in order to reduce the execution time. Use right amount of memory for all your functions and keep monitoring the performance metrics on regular basis.
  • Use AWS CloudWatch to monitor the performance of your Lambda functions along with their cost. You can also set up CloudWatch alarms to get notified whenever there is an increase in the usage cost.
  • Make sure to choose the most cost-effective event sources and then optimize their trigger frequency. Combine the queues and events efficiently to batch process.
  • Carry out regular audits of your Lambda functions and usage patterns. Identify the unused resources and remove them if they are charging you extra money.
  • You can also use AWS cost management tools like AWS Budget and AWS Cost Explorer to keep a track record of your budget.


All in all, AWS Lambda provides potential and efficiency for savings in the cloud computing environment. By using the best practices for cost management, companies and organizations can maximize their benefits by making sure that their architecture is economical and powerful.

It is also important to explore new AWS features along with tools so that they can further help in cost optimization process. There are endless opportunities for cost optimization when it comes to AWS features. You can also use AWS Lambda for transforming the development and deployment process of applications with significant cost savings.

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