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AWS
April 21, 2022

Exploring AWS Cost Explorer and AWS Budgets

Yo Fukuda
Senior Account Executive
Translations are provided by machine translation. In the event of any discrepancy, inconsistency or inconsistency between the translation provided and the English version, the English version shall prevail.
Table of contents

Introduction

Amazon Web Services (AWS) offers many tools to help enterprises manage cloud costs easily. One of the tools is the AWS Cost Explorer, an important tool for understanding cloud usage fees and is widely used by many organizations. AWS Cost Explorer provides multiple filtering options to visualize and monitor AWS service usage fees from various angles.

In this article, we will show you a few fundamental ways to use AWS Cost Explorer that you can begin using today.

1. What is AWS Cost Explorer?

AWS Cost Explorer is a tool that allows you to view and analyze your AWS usage and costs. You can perform cost analysis based on historical data and forecast future usage data.

The following are the six features of AWS Cost Explorer that allows you to  "visualize, understand, and manage costs and usage over time."

  • You can start using it immediately (default reports)
  • Set time interval and level of detail (custom reports)
  • Filter / group data (analysis)
  • Predict future costs and usage
  • Save progress
  • Build a custom application
  • These features can be used for the following purposes. You can refer to the specific AWS Cost Explorer usage method described later.

  • Monitoring daily cost
  • Detecting  causes of anomalies
  • Identifying services with high usage fees. Understanding trends in cloud usage fees through year-on-year and month-on-month comparisons
  • Monitoring coverage ratio for Reserved Instances (RIs) and Savings Plans
  • 2. Cost Optimization Measures Using AWS Cost Explorer

    This section describes practical ways to use AWS Cost Explorer, which includes filters and settings we recommend.

    2.1  Understanding the Actual Usage

    Understanding the actual cloud usage is a necessary first step prior to any cost optimization measures. Data filtering and cost grouping on AWS Cost Explorer will assist in understanding the actual usage.

    2.1.1 Data Filtering

    Below are some filtering options you can use within AWS Cost Explorer. You can refer to the AWS document for the available filtering options.

    1. Costs by Service, Region, or AWS Account
    • Filtering used for general analytical purposes. You can identify specific AWS accounts, services, regions with high usage fees which has a potential room for cost reduction.
    1. Filtering by Purchase Option
    • You can understand the percentage ratio of usage fee based on RI, SP, and on-demand usage. Knowing the coverage ratio will help you understand if there is room for further cost reduction. For example, if you see the majority of your usage is covered with on-demand usage then you can buy RI or SPs to reduce cost.\
    1. Filtering by Cost Allocation Tags
    • Cost Allocation Tags will bring you a lot of insights once properly implemented which may require some effort. With Cost Allocation Tags, you can slice and dice the cost data in greater detail aside from AWS resource-level classifications, which will help you analyze AWS cost from different perspectives as shared below.
    • Recommended Tags - Department unit, Environment unit, By usage, Usage period (temporary use, long-term use resources, etc.)

    2.1.2 Cost Grouping

    With AWS Cost Explorer, you can combine multiple filters to get insights according to your specific needs. You can understand the actual costs by using filters such as frequently used AWS Accounts, Regions, Usage Type, as well as filtering such as Cost Allocation Tags and Purchase Options.

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    To make your job easier, you can save the exact configuration of your filters and data as a bookmark which you will be able to download as a CSV file or save as a "report". Sharing saved reports enables your organization to make informed decisions.

    We recommend that you start by using the filtering options introduced in 2.1.1 and implementing cost allocation tags, and gradually find a cost grasping method that suits your company.

    AWS Cost Explorer reports should be configured and saved for each person who needs analytics. For example, a team responsible for cloud cost management may need different sets of data for analysis from a team of engineers and developers.

    2.2  Cost Reduction

    Now, let's take applicable measures for cost reduction using tools such as AWS Cost Explorer and AWS Trusted Advisor based on the actual cost understanding obtained in 2.1.

    2.2.1 Considering Reserved Instances and Savings Plans

    If filtering by AWS account shows that EC2/RDS spend is high for a particular AWS account, or if filtering by purchase type shows that spend is high at on-demand rates, you may want to consider purchasing RIs or Savings Plans.

    AWS has flexible purchase options with which you will receive a discount in exchange for one- or three-year commitment in advance. Two types of discount programs, RIs and Savings Plans, are available as of April 2022, and each program has a different service coverage and discount scheme.

    RI discounts can be applied to EC2, RDS, Redshift, ElastiCache, and Elasticsearch by entering various conditions, reserving the use of a particular instance and committing for either one year or three years. While Savings Plans can be applied to EC2, Fargate, and Lambda automatically without the need to set any conditions (i.e regardless of family, size, or region). Although RIs support EC2, we recommend purchasing a Savings Plans for EC2 because it is more convenient and flexible.

    RIs and Savings Plans offer the same discount percentages and the primary difference between the two is that RIs offer discounts depending on the committed usage, while Savings Plans offer discounts depending on the committed spend. The Savings Plans discounts scale with your commitment but can go up to 72%.

    2.2.2 Rightsizing and Scheduling of Amazon EC2 / RDS / Redshift

    Resource Optimization Recommendations on AWS Cost Explorer gives you an overview status of working EC2 instances and recommendations for cost savings by selecting the appropriate instance type and size (rightsizing) according to the CPU usage, or by scheduling the start / stop of the instance if there’s any instance found not running in a certain anticipated cycle.

    You can reduce the cost for Amazon RDS and Redshift in the same way. You can expect cost savings by identifying underutilized services and instances in AWS Trusted Advisor, and then rightsizing or scheduling them.

    2.2.3 AWS Budget Settings

    The AWS Budget is useful for continuous cost optimization as it allows you to set a budget per AWS account, service, and so on, preventing cost overrun in the future.

    3. Fostering cost awareness in the organization

    AWS Cost Explorer is also an effective tool for fostering awareness and the need for cloud cost optimization throughout the organization.

    In many organizations, engineers and developers spend their precious time keeping an eye on cloud costs as part of their job, however daily cost monitoring and cost overrun detection should also be tracked by the department responsible for managing cloud costs.

    The ideal situation of shared responsibility in an organization is when the cost management personnel can immediately identify the cause and solve problems together with technical personnel in the event of a cost overrun.

    More often than not, organizations where cloud cost optimization is not successful, the person in charge of development often carries other responsibilities including cost and budget management resulting in cost optimization to be on the back burner. In addition, the knowledge on cloud cost is so complicated that it is often embedded to a certain individual, which results in another blocker for an organization-wide attempt for cost optimization.

    However, with AWS Cost Explorer, even someone without a technical background will be able to navigate the tool.

    Summary

    This article introduced what AWS Cost Explorer is, how you use AWS Cost Explorer and other AWS services for your cost optimization.

    Fostering the importance of cost optimization throughout the organization is just as important as the use of tools in your continuous cost optimization journey.

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