After setting up your first AWS account and implementing essential security practices, the next step is to monitor your AWS expenditures to remain within your financial limits. AWS operates on a pay-as-you-go model, similar to a utility bill; your costs fluctuate based on usage. The more resources you consume, the higher the bill, and conversely, you can halt payments by turning off unused AWS Cloud resources. While this pricing structure can lead to substantial savings for your organization, it also necessitates a shift in how you design, manage, and operate within your AWS environment. This blog post introduces AWS cost management tools that can help you effectively oversee your AWS-related expenses.
Best Practices for Cost Management and Visibility
To embark on your AWS cost management journey, first appoint a billing manager in your organization responsible for tracking monthly expenses. Through the AWS Billing and Cost Management console, the billing manager can:
- Access detailed insights into AWS costs and usage.
- Utilize AWS Cost Explorer to analyze usage patterns and key cost drivers.
- Establish budgets for costs and usage with AWS Budgets.
- Allocate expenses to specific projects, teams, and cost centers via cost allocation tags.
Beyond reviewing and settling your bills, the console serves as your central hub for these cost management tools.
Create IAM Users for Your Financial Stakeholders
The Billing and Cost Management console is primarily accessible to your root account by default. Given that security best practices advise minimizing root account usage, it’s advisable to create one or more AWS Identity and Access Management (IAM) users with permissions to view the Billing and Cost Management console. To learn more, check out the guidelines on how an IAM user can access AWS billing information, and don’t forget to enable access to the Billing Console!
AWS offers a managed policy named Billing, which can be assigned to IAM users to grant full access to the Billing and Management console along with AWS Budgets. For those with financial oversight, you can tailor permissions to be more restrictive.
Utilize Cost Explorer to Identify Cost Drivers and Usage Trends
Cost Explorer is a tool that helps you visualize, comprehend, and manage your AWS expenses and usage over time. Its user-friendly interface allows you to create custom reports, including charts and tables, that analyze cost drivers and usage data at both high and detailed levels. You can change views of your cost and usage data through various filtering dimensions such as AWS services and linked accounts. For further guidance on using Cost Explorer, refer to the article about the New Cost Explorer for AWS.
Set Up AWS Budgets for Custom Cost and Usage Plans
AWS Budgets enables you to set personalized budgets for your AWS costs and usage, with alerts to notify you when you exceed or are expected to exceed those budgets. Budgets can be established on a monthly, quarterly, or yearly basis, and alerts can be triggered by actual or projected usage. Each budget alert can be sent to up to 10 email recipients or published to an Amazon Simple Notification Service topic. For additional details, see the new updates on AWS Budgets and Forecasts.
Enable the AWS Cost and Usage Report
While the aforementioned tools provide a solid understanding of your AWS costs, you might have power users who desire a more granular analysis. The Cost and Usage report is a thorough dataset containing your AWS cost and usage information, available in downloadable CSV format. You can also upload this report to Amazon Redshift or Amazon QuickSight. To enable the Cost and Usage report, visit the Reports page in the Billing and Management console, or consult the guide on Understanding Your Usage with Billing Reports.
Implement and Utilize Cost Allocation Tags
As your AWS usage expands, it’s crucial to break down costs by department, project, team, or cost center. To organize and account for your AWS resources, we suggest applying cost allocation tags. Once enabled, these tags appear as available filtering dimensions in Cost Explorer, AWS Budgets, and your Cost and Usage report. This enables you to analyze and view your expenses at the levels that align with your business needs. For more information, visit the AWS Cost Allocation for Customer Bills page.
For further insights on AWS cost management, you can explore additional resources like the AWS Cost Management and Cost & Usage Data Dictionary. For more detailed discussions, check out this blog post on cost management.
If you have any feedback or questions regarding this post, feel free to reach out to Michael at @michaelsmith.
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