This article explains how to optimize EC2 costs using AWS Compute Optimizer's rightsizing recommendations, which match instance types to actual workload demands.

• Compute Optimizer analyzes CloudWatch metrics (CPU, memory, network, disk, EBS, GPU) to classify instances as over-provisioned, under-provisioned, optimized, or idle
• Enable Cost Optimization Hub for after-discount savings visibility reflecting actual pricing commitments
• Deploy CloudWatch Agent or enable external metrics ingestion (Datadog, Dynatrace, New Relic) for memory utilization data
• Configure rightsizing preferences (CPU threshold, headroom, lookback period) to match organizational risk tolerance
• Evaluate Graviton (ARM64) recommendations carefully; test compatibility before migrating from x86
• Establish regular review cadence with application owners and track realized savings in Cost Explorer
• Tag instances by environment, application, and owner for effective filtering and prioritization

A structured rightsizing workflow with regular reviews and stakeholder validation turns recommendations into sustained cost savings while maintaining performance requirements.