Re-architecting AWS to Proxmox LXC: Saving 70% on Cloud Costs

The VMware Exodus

When Broadcom acquired VMware and drastically increased licensing fees, many engineering teams rushed to find alternatives. A common reaction was lifting and shifting everything to AWS or Azure. However, for a lot of companies, that simply swapped software licensing bloat for cloud compute bloat.

Here is how I migrated a high-traffic SaaS from an expensive AWS EC2/EKS setup to a collocated Proxmox LXC cluster, cutting monthly cloud spend by 70% while improving I/O performance.

The Problem: AWS Compute Bloat

The client ran a microservices stack on AWS: EKS for orchestration, managed RDS for PostgreSQL, and ElastiCache for Redis. Their monthly bill hovered around $12,000. Most of that stemmed from baseline EC2 instance costs, NAT Gateway data transfer fees, and managed service markups.

The Solution: Proxmox Virtual Environment

We migrated the stack to collocated bare-metal servers running Proxmox VE. Proxmox supports both full KVM virtual machines and lightweight LXC (Linux Containers).

1. Replacing EKS with LXC and Docker Swarm

Instead of running heavy VMs, we placed stateful services directly into Proxmox LXC containers. Because LXC containers share the host Linux kernel, they deliver near bare-metal performance without hypervisor overhead. For stateless microservices, we deployed a lightweight Docker Swarm cluster across 3 nodes.

2. Storage: ZFS on NVMe

AWS EBS becomes expensive rapidly, particularly when paying for provisioned IOPS. We installed enterprise NVMe drives in a ZFS RAID10 array on the physical servers. ZFS provides inline lz4 compression, instant snapshots, and high read/write throughput without metering IOPS.

3. Networking and Ingress

We replaced AWS Application Load Balancers (ALB) with an HAProxy + Keepalived configuration across two Proxmox hosts. This eliminated hourly load balancer charges and gave us direct control over SSL termination and traffic routing.

The Outcome

Moving away from managed cloud services to bare-metal Proxmox hardware reduced monthly infrastructure spend from $12,000 to roughly $3,500, which includes cabinet colocation fees and transit bandwidth. Latency also improved across services by removing the cloud virtualization layer.

If you are looking to cut cloud costs or migrate to Proxmox, feel free to reach out to discuss your setup.