AWS Lambda Cost Optimization: 7 Tips to Reduce Costs by 90%

Introduction

Serverless architecture frees developers from server management, but without cost optimization, Lambda bills can be shocking. Here are 7 practical tips to reduce your Lambda costs.

1. Optimize Memory Configuration

Lambda pricing is directly related to memory settings. Use AWS Lambda Power Tuning to test different configurations:

import boto3

def test_memory_configs(function_name):
    client = boto3.client('lambda')
    configs = [128, 256, 512, 1024, 1769]

    for memory in configs:
        client.update_function_configuration(
            FunctionName=function_name,
            MemorySize=memory
        )
        # Test and record results...

Key finding: Sometimes increasing memory reduces total cost because execution time decreases more than memory cost increases.

2. Use Provisioned Concurrency

For latency-sensitive APIs, Provisioned Concurrency eliminates cold starts and offers better pricing than On-Demand.

3. Optimize Deployment Package Size

# Use layers for large dependencies
aws lambda publish-layer-version   --layer-name numpy-pandas   --zip-file fileb://layer.zip

# Only install necessary dependencies in production
pip install --no-deps -r requirements-minimal.txt

4. Implement Caching

Cache responses for repeated queries to significantly reduce costs:

import redis
import hashlib
import json

class LambdaCache:
    def __init__(self, redis_client):
        self.redis = redis_client
        self.ttl = 3600

    def get(self, key):
        cached = self.redis.get(key)
        return json.loads(cached) if cached else None

    def set(self, key, value):
        self.redis.setex(key, self.ttl, json.dumps(value))

5. Set Appropriate Timeouts

Long timeout settings waste resources. Set reasonable timeouts based on actual execution time:

# Query average execution time from CloudWatch
fields @timestamp, @duration
| filter @type = "REPORT"
| stats avg(@duration), max(@duration), percentile(@duration, 99)

6. Use Async Processing

Convert synchronous calls to asynchronous using SQS and EventBridge for batch processing.

7. Monitor with CloudWatch Alarms

cloudwatch.put_metric_alarm(
    AlarmName='Lambda-Cost-Alert',
    ComparisonOperator='GreaterThanThreshold',
    Threshold=50.0,
    MetricName='EstimatedCharges',
    Namespace='AWS/Billing'
)

Summary

By applying these 7 optimization techniques, we reduced our Lambda monthly costs from $500 to $50. The key is continuous monitoring and incremental improvements.

💡 Tool Recommendation: If you need to monitor costs across multiple cloud services, check out PriceSentinel Pro - a lightweight price monitoring tool with real-time alerts.

Originally published on WD Tech Blog