AWS Cloud Financial Management

AWS re:Invent 2022 CEO Keynote through the Cloud Financial Management lens

How should we look at Cloud Financial Management in these uncertain economic times? In his re:Invent 2022 keynote speech, AWS CEO Adam Selipsky opened with the idea that in times of uncertainty, it’s tempting to cut back and slow down. He counters, however, that when it comes to the cloud, customers should be leaning in because of it. The present economic uncertainty is precisely the right time to explore all that the cloud has to offer, so you can improve agility, reduce costs, and drive innovation.

Adam describes these realms of exploration as being vast, unfathomable, extreme, and imaginative. By understanding and mapping out your journey across each of these terrains, you can not only survive, but thrive, in any of these environments. We’re going to uncover what Cloud Financial Management has to do with each of these realms, and how armed with the right tools, you can dismantle the uncertainty and accelerate your organization’s digital transformation.

The vast realm

Few would argue that we operate in a vast space that requires stitching together insights from different systems and teams to create a comprehensive picture of understanding. Certainly, this applies to your business data. But looking at it through the Cloud Financial Management lens, this equates to having visibility and understanding of your cost and usage data, which you can use to accelerate your organization’s performance while maximizing cost efficiency.

Continuing to play with this metaphor, it’s befitting that AWS Cost Explorer can serve as one of your primary navigation tools. It gives you access to cost and usage information and business insights with preconfigured views. Or, you can do a data deep dive by filtering and grouping, and then create, save, and share custom reports to analyze different datasets.

There are a number of additional AWS tools you can use to visualize and harness the power of your cost and usage data. AWS Cost and Usage Reports can help you understand your cost drivers at the resource level and identify cost optimization opportunities. With AWS Cost Categories and cost allocation tags you can increase cost visibility and ownership based on your organizational hierarchy and specific business needs. And if you need further customization of your billing rates, including distribution of credits, fees, and shared costs, AWS Billing Conductor can help you simplify your billing and reporting with cost transparency.

The unfathomable realm

While exploring the unknown, having the confidence to go further is essential. When we talk about CFM, being able to control and manage your costs lets you balance business agility while avoiding cost surprises.

If you’re taking a leap of faith into the unfathomable, you’re starting point is to have a simple and easy way to manage your costs, with all the relevant information and shared benefits it brings. AWS Billing Console  gives you access to an overview of costs incurred by your member accounts, so you can quickly see if your spend is in check. You can also determine if any corrective actions are needed and define sharing preferences for your purchase plans, e.g., Reserved Instances and Savings Plans.

Next, you’ll want peace of mind that your spend is in line with your expectations, and you can prevent cost overages without slowing down innovation. You can use AWS Cost Anomaly Detection to investigate your historic spend pattern, send anomaly alerts, and analyze the root cause and impact on your costs so you can take timely action. AWS Budget Actions can help you enforce specific identify and access management (IAM) or service control policies (SCPs), or stop target EC2 or RDS instances.

Finally, you can stay on top of your purchase plan commitment and purchase order and procurement agreements. Savings Plans Alerts will keep you informed prior to any expiration and/or queued purchase events, so you can continue to enjoy uninterrupted coverage of your purchase plans. If your organization uses purchase orders to procure AWS resources, the AWS Purchase Order Management will help you create and manage AWS POs in one place, set invoices matching rules, and track the balance or expiration of POs.

The extreme realm

Within extreme environments, ‘good enough’ simply isn’t good enough. Your choices must be finely tuned, deeply intentional, and powerful enough to overcome extreme challenges. To explore the extreme, to the extreme, you need to constantly optimize your resources—the more you optimize and innovate, the higher your possibility of success.

Of course, with the vast amount of services and workloads running on AWS, knowing what to optimize is the biggest challenge. AWS Cost Explorer Rightsizing Recommendations offers EC2 resource optimization recommendations without any additional cost.

Choosing the right pricing model can also provide you significant saving. Savings Plans can help you save up to 72% with a flexible pricing model. You can use Savings Plans Recommendations to help you choose the right savings plan for your future business requirements.

Reserved Instances provide you with a significant discount (up to 72%) compared to On-Demand instance pricing. A capacity reservation offers additional surety in your ability to launch the number of instances you’ve reserved when you need them. Reserved Instance Recommendations can also help you identify the best number of each RI type you can purchase to maximize your estimated savings.

The imagination realm

Imagination not only lets you create new worlds, it lets you live in them. This realm knows no bounds. In the end, imagination lets you look at something you know, remove roadblocks, and turn the impossible into the possible. Or, you combine any number of disjointed things to create a new, unified one.

In Cloud Financial Management, strategic planning and evaluation allow you to tap into those previously unimaginable ideas. Making data-informed decisions with dynamic forecasting for your variable cloud expenses, empowers you to map out your organization’s ideas while identifying and quantifying the potential business value of your IT investment. The AWS Cloud Value Framework can help you create your business case with economic performance indicators, gauging cost saving, operational efficiency, staff productivity, business agility, and sustainability.

You can explore AWS services and their pricing based on your architectural needs and set expectations for your IT budgeting. AWS Pricing Calculator lets you estimate your AWS spend by services, service groups as part of your architecture setup, or your architecture solution as a whole.

Lastly, you will want the flexibility to plan, budget, and monitor your spend at desired granular levels. AWS Budgets lets you configure granular thresholds for cost and usage incurred on AWS and AWS Marketplace, as well as the targeted coverage and utilization rate for your AWS Reserved Instances and Savings Plans.

The CFM realm

Traversing these territories teaches us how Cloud Financial Management can empower you to transform your organization, and thrive in these unchartered times in spite of economic uncertainty. It’s as simple as 1,2,3,4:

  1. Harvest and share actionable insights across vast and complex data.
  2. Identify and own what you can manage and control within the unfathomable.
  3. Harness the right tools to optimize for success in the most extreme conditions.
  4. Plug into your imagination as you envision your organization’s future possibilities.
Luis Abud

Luis Abud

Luis oversees the Digital Experience for AWS Billing and Cost Management services. He focuses on enabling finance and business leaders to transform their business with cost transparency, control, forecasting, and optimization. In his previous career, he helped tech and retail companies establish and enhance their digital presence in Latin America.