5 tips to improve the cost-effectiveness of S3 – Amazon Cloud Storage

Amazon S3 cost optimization

Businesses are increasingly abandoning on-premises legacy databases in favor of modern cloud storage options that provide the scalability and flexibility to handle explosive data growth. Amazon Web Services is the largest player in the cloud market, followed by Google Cloud Platform and Microsoft Azure. According to Gartner, the global infrastructure as a service (IaaS) market grew almost 30% in 2022, and AWS had a 40% market share.

With Amazon S3’s tiered storage options, you can strategically align your data storage needs with cost, ensuring that frequently accessed data resides in low-latency, high-performance tiers. This flexibility not only enhances operational efficiency but also empowers your business to scale seamlessly.

In this guide, we’ll dive into practical tips beyond the basics, showing you how to optimize your cloud storage strategy and make the most of Amazon S3’s features. Whether you’re a startup or an established enterprise, these actionable insights will help you strike the perfect balance between performance and cost-effectiveness.

Tip 1: Select Right Storage

AWS S3, or Simple Storage Service, is a popular service for storing and managing data in the cloud. It’s fast and versatile, making it a tempting choice. However, it is important to understand that standard storage in S3 is not suitable for all use cases. There are different storage classes, which differ mainly in terms of latency, availability, and cost.

1. Standard storage class

The default storage class for general-purpose data that requires low-latency access and high throughput.

Key features:

  • Low latency and high throughput for frequently accessed data.
  • Durability and availability designed for critical workloads.
  • Suitable for a wide range of use cases, including big data analytics, mobile and gaming applications.

The low-latency access and high throughput of S3 standard make it ideal for processing and analyzing large volumes of customer data on popular e-commerce platforms, ensuring quick responses to user interactions. Additionally, the durability and availability features make it reliable for critical workloads, ensuring that valuable customer data is always accessible and secure.

2. Intelligent-tiering storage class

Automatically moves objects between two access tiers (frequent and infrequent access) based on changing usage patterns.

Key features:

  • Automatic cost optimization by moving objects to the most cost-effective access tier.
  • Ideal for data with unknown or changing access patterns.
  • Low-latency access to frequently accessed data and cost savings for infrequently accessed data.

Amazon S3 intelligent-tiering is particularly useful for a business scenario such as a media streaming service. As user demand for specific content fluctuates over time, the storage class automatically adjusts, ensuring low-latency access to popular videos stored in the frequent access tier while optimizing costs by moving less frequently accessed content to the infrequent access tier.

3. Glacier storage class

Designed for archiving and long-term storage of data with retrieval times ranging from minutes to hours.

Key features:

  • Extremely low-cost storage for archival data.
  • Multiple retrieval options (Expedited, Standard, and Bulk) to accommodate varying data access needs.
  • Suitable for data accessed infrequently and tolerating longer retrieval times.

The extremely low-cost nature of Glacier aligns with the cost-sensitive nature of healthcare operations. Multiple retrieval options allow for flexibility in accessing archived patient records and medical imaging data when needed, even if retrieval times range from minutes to hours.

4. Glacier deep archive storage class

The lowest-cost storage class for archival data with the longest retrieval times.

Key features:

  • Extremely low-cost, suitable for data that can be stored for seven years or longer.
  • Long retrieval times (12 hours), making it ideal for rarely accessed data.
  • Designed for compliance and regulatory requirements for data retention.

Amazon Glacier deep archive is perfect for financial institutions storing compliance data with extended retention requirements, providing an extremely low-cost solution for rarely accessed records that must be stored for seven years or longer. The prolonged retrieval times align with regulatory needs, ensuring cost-effective and compliant long-term storage.

5. One zone-infrequent access (Z-IA) storage class

Stores data in a single availability zone, offering cost savings with slightly lower durability than Standard storage.

Key features:

  • Cost-effective storage for infrequently accessed data with reduced redundancy.
  • Suitable for data that can be recreated or easily regenerated.
  • Offers lower-cost options for workloads that can tolerate data loss in a single availability zone.

Storing non-critical backup copies of reproducible data is most suitable for a software development environment. The cost-effective nature of Z-IA, with slightly lower durability, is suitable for workloads that can tolerate the loss of data in a single availability zone, making it a budget-friendly option for infrequently accessed and recreatable development assets.

These storage classes within Amazon S3 provide businesses with a range of options to tailor their storage strategy based on specific performance, cost, and durability requirements for different data types.

Given the vast choice, what criteria should be considered when choosing the right storage class for cost-effective utilization?

  • Access patterns and frequency. Consider the access patterns of your data. If you frequently access certain data, opt for a storage class with low latency and high-performance characteristics, such as Glacier. Choose a cost-saving storage class for less frequently accessed data without compromising retrieval times.
  • Data lifecycle and durability requirements. Evaluate the lifecycle of your data and its durability needs. Some storage classes offer higher durability but may have longer retrieval times. An intelligent-tiering storage class can align with your data’s longevity and ensure its availability when needed.
  • Cost sensitivity and budget constraints. Be mindful of your budget constraints and the overall cost sensitivity of your business. Amazon S3 provides various storage classes with different pricing models. One zone-infrequent access (Z-IA) storage class can balance performance and cost to optimize spending while meeting your data storage requirements.

Amazon S3’s tiered storage options enable businesses to seamlessly scale their storage resources up or down based on changing requirements. Apart from the criteria above, ensure the chosen storage class aligns with your data governance and security protocols. If you can’t decide which storage class will be the most cost-effective for your business, consult our expert – we’ll find the best option for your current needs.

Tip 2: Identify large buckets that you aren’t aware of

In Amazon S3, a bucket is a container for storing objects (files) in the cloud. Each bucket has a globally unique name across all of AWS and resides in a specific AWS region. Buckets are used to organize and manage your data within Amazon S3. You can think of a bucket as a top-level folder or directory that helps you structure and categorize your stored content.

Amazon S3 bucket

Buckets also do the following:

  • Structure the Amazon S3 namespace at the highest level.
  • Identify the account to which data storage and transfer fees will be charged.
  • Provide access control options such as bucket policies, access control lists (ACLs), and S3 access control lists that you can use to manage access to your Amazon S3 resources.
  • Serve as an evaluation unit when creating usage reports.

Over time, however, the large buckets in Amazon S3 can become like overstuffed wardrobes — challenging to navigate, inefficient, and prone to problems. We compiled a list of action points to follow for detecting and eliminating such unnecessary data bulks:

  1. Get the data in order. Begin by conducting a comprehensive inventory of all existing buckets within your AWS account. Classify them based on size, usage patterns, and content types.
  2. Implement monitoring and alerts. Set up AWS CloudWatch Events or AWS Config Rules to monitor bucket size, object count, and access patterns. Establish alerts for any deviations from predefined thresholds.
  3. Utilize AWS’s trusted advisor. Leverage AWS Trusted Advisor, which provides recommendations for cost optimization. It can identify large buckets and offer guidance on optimizing storage costs.
  4. Conduct regular audits and reviews. Perform periodic audits to review the contents of large buckets. Identify unused or obsolete objects and assess whether data can be archived or deleted to optimize costs.
  5. Enable logging and monitoring. Enable Amazon S3 access logs and configure logging to a dedicated bucket. Regularly review these logs for unusual access patterns or potential security risks. AWS CLI or SDKs can automate the detection of large buckets.
  6. Implement access controls. Ensure that proper access controls are in place for each bucket. Regularly review and update these controls to align with changing business requirements.

By following this action plan, you can proactively detect and manage large buckets in Amazon S3, thus effectively optimizing costs and reducing management complexity.

Tip 3: Leverage Caching Mechanisms

Caching mechanisms can improve the cost-effectiveness of Amazon S3 by reducing the need to retrieve data directly from S3, thereby lowering data transfer costs and enhancing performance. Here are two caching mechanisms commonly used with S3:

1. Amazon CloudFront

Amazon CloudFront is a content delivery network (CDN) service that accelerates content delivery by caching it at edge locations around the world. It acts as a caching layer between your users and your S3 bucket, serving cached content from the nearest edge location. Its key features include the following:

  • Reduced latency: CloudFront caches frequently requested content at edge locations, reducing the latency for users by serving content from the nearest edge server.
  • Cost savings: By minimizing the direct retrieval of content from S3, CloudFront helps reduce data transfer costs.
  • Content compression: CloudFront can automatically compress content, further optimizing data transfer and reducing costs.

2. AWS Lambda Edge

AWS Lambda Edge allows you to run serverless functions at AWS edge locations, enabling you to customize the content delivered by CloudFront. Leveraging Lambda@Edge significantly boosts cache hit rates by enhancing the likelihood of caching content upon origin return and increasing the availability of existing cached content. It optimizes content delivery with the following features:

  • Dynamic content generation: Lambda@Edge can generate and cache dynamic content at the edge locations, reducing the load on your S3 bucket and improving response times.
  • Personalization: Implement personalized content delivery logic at the edge, reducing the need for frequent requests to S3 for user-specific content.
  • Content manipulation: Modify or transform content on the fly, ensuring that cached content remains up-to-date without overloading your S3 resources.

CloudFront and Lambda@Edge work together to optimize static and dynamic content delivery, reducing the load on your S3 bucket and improving overall performance. Bear in mind that implementing cache invalidation strategies can be challenging. If not managed correctly, stale content might be served to users until the cache is updated. Consider expert support to avoid collateral errors.

Tip 4: Enable Data Compression

Amazon S3 itself doesn’t provide built-in compression for objects stored in the bucket. However, you can enable data compression before uploading files to S3 or implement a compression strategy in your application. Here are two approaches:

1. Client-side compression

Compress the data on the client side before uploading it to S3. This approach involves compressing the files locally using a compression algorithm (e.g., gzip) and then uploading the compressed files to S3. Take the following steps:

  1. Compress the data on your local machine or server using a compression tool or library.
  2. Upload the compressed files to S3 using the AWS Management Console, AWS CLI, or SDKs.

2. Lambda@Edge for on-the-fly compression

Use AWS Lambda@Edge to compress content on the fly when clients request it. This approach suits scenarios where you want to serve compressed content without storing multiple versions of the same file in different compression formats. Proceed as follows:

  1. Create a Lambda function that compresses content using a compression library (e.g., zlib).
  2. Attach the Lambda function to a CloudFront distribution, enabling on-the-fly compression for content served through CloudFront.

Compressing objects before storage reduces the amount of data stored in S3, minimizing storage costs. A decreased object size leads to lower data transfer costs when retrieving or serving compressed content. Additionally, improved network efficiency results in faster data transfers, enhancing the storage’s performance.

Tip 5: Use Cost Allocation Tags

Cost allocation tags for Amazon S3 storage

Cost allocation tags are user-defined metadata labels in AWS that you can assign to AWS resources to track and allocate costs more effectively. These tags act as key-value pairs that provide additional context and organization to your resources. Cost allocation tags are especially handy for businesses with complex AWS infrastructures, as they enable granular tracking of expenses and facilitate more accurate cost reporting.

Let’s examine a few examples of how implementing tags contributes to better cost attribution and management in different industries.

1. Technology industry

In a software development company, cost allocation tags can be applied to AWS resources to track project-specific costs. For instance, tagging EC2 instances, S3 buckets, and databases with project names allows the company to precisely allocate expenses to individual software development projects. Tags implementation helps understand the cost breakdown per project, optimize resource usage, and accurately budget for each development initiative.

2. Healthcare industry

Healthcare providers leveraging AWS for cloud infrastructure can apply cost allocation tags to resources associated with different departments or medical specialties. Tagging resources with department names, such as «Radiology,» «Cardiology,» or «Administration,» enables the organization to analyze and allocate costs based on specific healthcare services. Monitoring helps in financial planning, ensuring that each department is accounted for accurately in the overall budget.

3. Financial services industry

Tagging resources (for example, virtual servers that run financial applications and services) with labels such as «PCI-DSS» or «SOC 2» allows financial organizations to monitor and allocate costs associated with maintaining compliance. This granular cost tracking is crucial for regulatory reporting and ensures that resources contributing to compliance efforts are accurately accounted for in the financial plan.

In each of these examples, cost allocation tags provide a practical way to track resources and allocate costs based on specific attributes relevant to the industry. 

However, some AWS services have limitations on the number of tags or characters allowed in tag names and values. Lightpoint experts can help you specify such limits and ensure your tagging strategy complies with them.


What sets Amazon S3 apart from other storage options on the market is simple yet robust. In addition, Amazon S3 only charges you for the capacity you actually use, with no hidden charges or overdraft fees. By choosing the right storage, tagging resources for cost allocation from scratch, and ensuring timely data compression and caching, you will receive a digital tool that can grow with your business while providing you with the cost benefits of AWS infrastructure.

However, optimizing the cost-effectiveness of Amazon S3 is an ongoing journey that requires proactive measures and continuous adaptation. As AWS services and pricing models evolve, staying informed and embracing a culture of continuous learning ensures that your organization maximizes the value of S3 while keeping costs in check. To use cloud storage confidently, Consult with our team and ensure optimal content delivery in your company.