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What Is AWS Cloud Cost Management?

How to Deal With the Nightmare

Cloud computing is a vital aspect of many modern businesses. Heck, global spending on cloud computing topped out last year at $225 billion!

So why is AWS cloud cost management so difficult and complicated?

You’d think that, with the size of the market, you would be able to effectively and easily track, manage, and optimize your cloud costs (especially on as large a platform as AWS), but that just isn’t the case. That’s why we’re writing this post.

We’ll be teaching you everything from the basics of AWS cloud cost management and what you need to search for in a solution to the native options available and even a few top-shelf selections of the best software on the market to solve your AWS woes.

This post covers:

  • What is AWS cloud cost management?
  • Elements you need for AWS cloud cost management
  • Native AWS cloud cost management solutions
  • The better method for AWS cloud cost management

Let’s get started.

What is AWS cloud cost management?

Source, image in the public domain

As we’ve stated in our previous posts, cloud cost management is a collection of methods, techniques, solutions, and software designed to help you identify, track, monitor, manage, and optimize the costs of your cloud computing operations. This includes everything from data warehousing to hosting your app on cloud servers - if it’s cloud-based and is costing you money, it’s something you need to keep under control.

AWS cloud cost management in particular is focused on managing and optimizing costs incurred from utilizing AWS (Amazon Web Services) as your cloud solution, from EC2 instances and S3 buckets to additional features and software such as AWS CloudFront.

Sounds simple? Well, that’s because it is… in theory.

The difficulty comes with the specifics of how you ensure that your costs are visible, transparent, controlled, and predictable, and that you’re not paying more than you need to.

If you’re experienced at all with AWS, you already know where we’re going with this. The pricing elements of many AWS products are downright nightmarish, and some such as Spot Instances even change price and availability based on the current market demand. It’s a nightmare to try and consistently stay on top of your AWS costs if you don’t have a solid plan in place to consolidate and analyze all of them.

For example, let’s say that you’re running a few EC2 instances to host an app. You’re paying with On Demand pricing, and everything is based in the same AWS Region, so those costs are consistent too.

Now imagine what you’d need to know in order to optimize those costs alone.

Source by Kampus Production, image used under Pexels license

You’d need to see your cost and usage statistics for starters, as this could inform whether expanding your operations would be better (in terms of cost versus performance), or if you could downsize during certain times of the year if your business gets seasonal traffic bumps. You’d need to research and compare other instances which might suit your needs better or fulfill the same purpose for less money, and you’d have to look into the payment plan options to go along with them. We’re talking thousands upon thousands of instance and pricing combinations to pick from, some of which update regularly, and that’s just for the EC2 branch of your cloud operations.

That’s why AWS cloud cost management can be a nightmare. Well, that, and the fact that AWS is terrible at presenting your cost and usage data in a legible way.

But first things first. If it’s so difficult to manage your costs, where should you even begin with making a plan to do just that?

Elements you need for AWS cloud cost management

To have a chance of effectively managing your AWS cloud costs you need to have a plan. This plan needs to have a method for dealing with the following elements or, more importantly, bringing them to your operations.

  • Visibility
  • Reporting
  • Organization
  • Control
  • Predictability
  • Scalability
  • Analysis
  • Optimization

Let’s briefly cover each of these, why they’re important, and what they mean for your organization.

Visibility is the first element you need to bring to your AWS cloud costs. Without being able to easily see what your costs are and where they’re coming from you’re never going to be able to monitor, manage, or optimize them in any meaningful way. Put simply, you need a way to view your costs item by item while being certain that they’re accurate and up-to-date.

By setting up reporting you can take some of the pain out of manually managing and analyzing all of your costs. AWS has a native option for dealing with this (more on that later), but the important thing is that you have some kind of regular system generating reports of your costs and, ideally, your usage statistics to go with them.

Source, image taken from Aimably’s AWS Invoice Management Software

Organization tends to come with using a dedicated tool for AWS cloud cost management. Whether it’s native to AWS or a third-party service, having a central dashboard that allows you to see what your costs are, what they’re attributed to, and maybe even make optimized suggestions or allows you to take action from within it is a massive boon.

Speaking of taking action, you need to be able to control your costs as effectively as you’re able to see and analyze them. The basic way of doing this is to note down the different services you’re using and how to control your spending within them, then share that document with those who need access. However, as stated above, some pieces of cloud cost management software will have ways to take control within them - you won’t always need to navigate 10 different interfaces just to make a few changes. The more control you have from a single location, the easier it will be to manage AWS cloud costs.

Predictability is simple. You need to be able to accurately budget and forecast costs to make sure that you’re not going to get hit by any nasty surprises. If you can predict what your costs will be you’ll even be able to further optimize operations by making adjustments based on traffic patterns! For example, if your business gets a regular seasonal traffic boost, you could requisition more resources when that demand spikes, then downsize again when the surge passes.

This also ties into the need for scalability. AWS Auto Scaling can handle many of these issues when used correctly, but even if you don’t use that service you need to make sure that your operations can fluidly scale up and down as needed in reaction (or sometimes predicting) to traffic spikes and general expansions.

One of the main problems with the native AWS method for getting your cost and usage data is that their reports make it difficult to understand, let alone analyze your figures. Even so, you need to make sense of your stats and costs so that you can make decisions based on what’s working well, what you’re not getting value out of, and what needs to be cut entirely.

This ties nicely into the final element you need in your operations; optimization. This is where you take everything you’ve learned from your analysis, tracking, and so on in order to cut costs where you can without affecting performance. Optimization can also mean expanding your operations to account for increased traffic, thus spreading the workload so that performance improves with as little impact on your costs as possible.

Phew, okay, that’s enough stage setting. Now it’s time to get into the native AWS cloud cost management solutions you can choose from.

Native AWS cloud cost management solutions

There are many AWS cloud cost management solutions you can add to your arsenal. They are:

This list of services spans the gauntlet of elements that you need to create a solid AWS cloud cost management program, but there are a few that are worth focusing on due to their wider potential uses.

The first of note is AWS Billing Conductor, which allows you to simplify and control your billing. With it you can group users into “billing groups” for easy viewing, generate billing reports for specific groups of users, define billing parameters for the end customer, create custom line items to allocate fees and credits, and more. If you’re looking to create cost visibility and accountability within teams, this is the tool for you.

Source by Nick Youngson, image used under license CC BY-SA 3.0

AWS Budgets brings some predictability to your operations by letting you set budgets to warn you when things are going over your limits. There’s not much more to explain - if you want a native AWS solution to cost tracking against expectations, this is your best bet.

AWS Cost and Usage Reports (CURs) provide you with your cost and usage data, setting the stage for further analysis and optimization. The main issue is that they’re difficult to analyze or even understand without prior experience, which is where AWS Cost Explorer comes in. This tool visualizes your CUR data in a single dashboard, letting you see it over different time frames. It’s worth pointing out that the only way to truly find the exact resource that created a cost is to dig through the CUR. If you’re considering a CUR deep-dive, we recommend you start with the AWS Well-Architected Labs Cost Optimization Workshop subsection which outlines ideal SQL queries when examining the CUR in Athena.

Basically, AWS has a lot of native solutions to help you manage your costs. However, these tools individually and as a full suite suffer from the same issues that plague almost every part of AWS; confusion.

Some, such as CURs, aren’t explained well enough or present their data in a manner that just leaves you scratching your head if you don’t have years of AWS management under your belt. Others, such as AWS Spot Instances, frequently change in terms of their availability and price, making them a nightmare to consistently track, predict, and optimize.

To top it all off, nobody wants to spend their time bouncing between a bunch of different apps and services. The whole point of AWS cloud cost management is to simplify viewing, tracking, managing, and optimizing your costs, and you can’t do that if you’re flipping between 5 different dashboards and having to memorize 20 different data sets.

Luckily, there is a better way…

The better method for AWS cloud cost management

Source, image taken from Aimably’s AWS Cost Reduction Assessment

Here at Aimably, we had enough of AWS nightmares. It’s a powerful and vital service, but something needed to change about the way that businesses could manage and control their AWS costs, and AWS certainly wasn’t doing anything to help that.

That’s why we’ve developed our AWS Invoice Management Software and AWS Cost Reduction Assessment.

With our AWS Invoice Management Software, you can see a simplified, attributed, and accurate view of your cost and usage data, handle invoice processing, report spending, and reconcile your bills with actual usage all in one location. There’s no need to jump between a myriad of services to view your data, analyze it, and then work with your financial team to process it!

Once you’ve got visibility, organization, control, and predictability over your AWS costs with that, you can move on to analyzing and optimizing them with our AWS Cost Reduction Assessment. We’ll analyze all of your costs according to the value that they generate for you, your usage statistics, and the potential impact on your business while using our vast (and up-to-date) knowledge of AWS pricing to give you the best advice possible. You’ll even receive a prioritized list of actions you can take, how much you could save by doing them, and the risk factor posed to your performance as a result.

What are you waiting for?

Click here to take all of the pain out of your AWS cloud cost management.

AWS Total Cost of Ownership