Choosing an AWS cost management strategy

One key strategy for controlling cost is to have control over which services can be used by which members of your organization. If you need this kind of access control, you can also use services such as IAM to securely control individual and group access to your resources. This involves being able to create, manage, and grant permissions to IAM users to let them access the appropriate resources for their role and location. Meanwhile, you can use AWS Organizations to enable more automatic policy-based account creation, management, and billing at scale.

It’s useful to get alerts that let you know that you’ve exceeded your budget, but it’s even more useful to be able to determine what is causing your bill to exceed your budget. AWS provides an out-of-the-box solution, AWS Cost Explorer to help show which AWS services are increasing spend.

You also will also want to know which parts of your organization, teams, or divisions drove increased spend and usage. AWS Cost Explorer can be combined with Cost Allocation Tags to let you categorize your resources and spending.

When you have multiple users working with multiple AWS services, it becomes really important to get detailed reporting if you want your cost management strategy to scale with your usage. Using the billing dashboard on the AWS Billing Console, you can track your overall spend, and view your cost breakdown by service and account. You can also get a unified view of spend in a single bill, and can establish rules for how to organize costs, as well as share discount benefits associated with Reserved Instances and Savings Plans.

It’s not just about the numbers. Your cost optimization strategy also needs to align with the logic of your business. AWS Billing Conductor lets you AWS pricing and billing report to provide that alignment with your business logic.

To help address your cost allocation needs, you can group accounts according to their financial relationships, and you can adjust ratings, share credits and savings, and add overhead costs.

AWS Billing Conductor also allows you to customize a second, alternative version of your monthly billing data. This alternative version models the billing relationship between you and your customers or business units, but doesn't change the way that you're billed by AWS. Using the alternative version provides you with a mechanism to configure, generate, and display rates to certain customers over a given billing period. You can also use it to analyze the difference between the rates that you apply to your groupings, relative to the actual rates for those same accounts from AWS.

Customers with predictable, steady workloads on Amazon EC2, Amazon SageMaker, and Amazon RDS should consider Reserved Instances (RIs) to save up to 75% over equivalent on-demand capacity. Reserved Instances are available in three options.

To maximize your savings, when you buy RIs, the larger the up-front payment, the greater the discount. Partial up-front RIs offer lower discounts, but give you the option to spend less up front. Lastly, you can choose to spend nothing up front and receive a smaller discount, this lets you free up capital to spend in other projects.

AWS offers Reserved Instance and savings plan purchase recommendations through AWS Cost Explorer, based on your past usage. AWS Cost Explorer identifies and recommends the commitment value that it estimates will result in the largest savings.

Another key element of cost management is identifying and eliminating any idle or over-provisioned resources. AWS Cost Explorer resource recommendations let you view top-level key performance indicators for rightsizing and instance selection recommendations.

These recommendations identify idle and underutilized instances, and search for smaller instance sizes in the same instance family.