Hello, World! Welcome to the AWS Cost Management Blog.
Over the past few years, it has become clear that cost is the common language used across Finance, IT, and Engineering groups at organizations worldwide. As such, cloud cost management is rapidly becoming an important aspect of everyone’s job.
At AWS, we are passionate about building cost management products that help you access, organize, understand, control, and optimize your costs and usage in the cloud. Future posts on this blog will explore various AWS cost management products and ways to you can use them to improve your organization’s cost efficiency. First, let’s quickly explore some of the shifts that we have seen in the ways that organizations understand and manage IT costs.
Quick introduction to cloud cost management
Cloud technology has transformed the way that organizations are structured. Nowhere is this more apparent than in the cloud cost management space. Here are some of the key transformations that I’ve seen in the ways that organizations think about and account for their costs:
- Only paying for resources that are used, often at granular units of usage (for example, running hours or bytes)
- The ability for anyone in an organization to initiate resources at any time, often as quickly as a few minutes
- An ever-growing portfolio of cloud services and products from which to choose
Transformation #1: Pay-as-you-go pricing
Cloud computing brought a mindset change from purchasing resources upfront on a monthly or quarterly basis to a new model of accounting for resource usage at pay-as-you-go prices. You can compare this to paying for parking in a busy city (such as Seattle).
In the previous world, buying a resource was the equivalent to paying an upfront fee for the exclusive use of your own parking spot. This was great because it guaranteed you the peace of mind that your spot would always be available for your vehicle. But what happened if you decided that you preferred to walk that day? Or if you sold your car? Well, you lost out on your investment, though you still had the peace of mind that the spot was yours if you needed it.
In the world of pay-as-you-go pricing, you are able to choose any parking spot that you like. For that, you get a parking garage of unlimited size (that is, peace of mind) AND you only pay for the time in the parking spot that you use. For example, you might pay $5 per day as opposed to the previous $15.
The example above demonstrates that paying only for what you use can net out to significant savings. That being said, the earlier IT finance model of paying for resource costs in one lump sum at the beginning of the month is more straightforward than tabulating your daily costs one-by-one as they are incurred. In sum, while cloud technology often allows you to run your business more efficiently, it has also disrupted traditional accounting processes.
Transformation #2: Decentralized resource procurement
This paradigm shift has also led to a new reality where any person in your organization can purchase resources at any time. Instead of one group (often IT finance) performing resource purchasing tasks, resource procurement was opened up to everyone on an as-needed basis.
This led to massive improvements in efficiency for organizations seeking to scale their implementations up and down on a moment’s notice. It also translated into hundreds (if not thousands) of billing line items for Finance to parse through at the end of the month for resources that were purchased by individuals across their organization. This is not an easy task for the average Finance group.
Transformation #3: Breadth of functionality
And finally, the growth of cloud technology has been unprecedented. AWS now offers over 165 services to address just about every use case under the sun. This leads to thousands of services and features being used and trillions of usage lines items being generated every month. Engineering and IT groups gain the benefit of being more cost-efficient, agile, and elastic. Finance, however, is faced with an increasing volume of cost and usage data for which to account.
New cost management blog
Over the past two years that I have been a part of AWS, our team has been a part of a number of customer journeys. We have watched a startup launch an application targeting 100 customers unexpectedly grow to be used by thousands. We have watched dozens of enterprise customers find their footing in the cloud cost management world and implement cost management at scale. We have also presented numerous training sessions to show that analyzing, controlling, and optimizing your costs can be rewarding and effective.
So, it is with enthusiasm (and enormous humility) that I invite you all to embark on this cloud cost management journey. This blog is intended to help you implement effective cost management mechanisms at your organization, no matter how big or small—or complex— your requirements may be. Learn more on the AWS Cost Management webpages.
If you have suggestions for posts or questions about existing solutions, please comment below.