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Organizing and Managing AWS Costs at Scale

6 min read

Last updated on July 26th, 2023 at 2:42pm

Managing Amazon Web Services (AWS) costs is daunting for many organizations. As most AWS services operate on a pay-as-you-go model, predicting costs and staying within budget can be tricky without proper mechanisms. This is especially true for organizations with numerous accounts, projects, and teams with different needs and usage patterns. To avoid overspending, you must closely monitor usage costs and enforce budget policies across your organization.

This article will review some common challenges of the AWS pricing structure, best practices for optimizing costs, and how to get started with cost management. Then, it covers how Kion can help you optimize your AWS cloud costs.

AWS Cost Management: Challenges and Considerations

AWS’ products and services have varying usage costs and pricing models. Although AWS offers some cost management tools, like Cost Explorer and Budgets, these have limitations when dealing with multiple accounts, projects, and teams. For instance, Cost Explorer only provides default reports and allows you to create up to 50 custom reports. You may need more flexibility and granularity to analyze costs and usage across dimensions. Similarly, Budgets only allows you to set up to 20,000 budgets per payer account, which may not be sufficient for large-scale organizations.

Here are some key challenges when managing costs on AWS:

  • Unpredictable pricing — Pay-as-you-go pricing means that you only pay for the resources you use. However, your costs can vary widely depending on usage patterns and demand, making it difficult to forecast costs and plan your budget.
  • Decentralized spending — Within an organization using AWS, individual teams can create new instances or increase resources without oversight. Such unauthorized and unmonitored spending can waste resources, causes costs to overrun, and may lead to compliance issues.
  • Complex billing — AWS billing can be complicated, especially when involving reserved instances, spot instances, and data transfer costs. Knowing how options affect costs allows you to optimize them for your needs. You should also regularly monitor your invoices to avoid surprises and catch errors.
  • Lagging insight — AWS cost management tools don’t provide real-time insight into your spending — it’s usually hours or even days before you see updated costs and usage. This makes it difficult to react quickly to spending anomalies or sudden changes in usage.

To deal with these challenges, you must plan to manage your AWS cloud costs at scale.

Best Practices for AWS Cloud Cost Optimization and FinOps

In the context of the cloud, FinOps is about managing the financial aspects of cloud resources. Cloud cost optimization is essential to FinOps as it helps organizations align cloud spending with business goals and outcomes.

Although cloud cost optimization and FinOps are technical tasks, they’re also organizational and cultural ones. They require shared responsibility and accountability across teams, departments, and stakeholders. It’s easier to align cloud spending with business goals and outcomes when everyone knows the cost and value of cloud resources.

Some best practices for AWS cloud cost optimization and FinOps include:

  • Implementing cost allocation tags — You can assign tags to AWS resources to better categorize and track them. Tags help you keep up with project, team, and application costs. They can also automate actions, such as starting or stopping instances according to schedules or events.
  • Establishing budget policies — To plan and control spending, set up and enforce budgets for individual accounts, projects, or departments. You can also set up alerts and notifications to warn you when spending exceeds or approaches your budget limits.
  • Monitoring usage patterns — By analyzing usage data, you can find any underutilized resources or over-provisioned instances. You can also use usage data to forecast demand and plan capacity accordingly.

Following these best practices will help you optimize your AWS cloud costs, but it’s a time-consuming, complex, and ongoing process.

Getting Started with AWS Cloud Cost Management

Whether you’re new to cloud cost management on AWS or want to overhaul your existing practices, here are some guidelines for getting started with AWS cloud cost management.

Step One: Assess Your AWS Environment

First, get a clear picture of your current cloud spending. Review your existing AWS resources, accounts, and billing. Identify what resources you’re using, how much they cost, and how you’re currently allocating them across the organization.

Step Two: Develop a Cost Management Strategy

Create a detailed plan outlining your organization's goals, targets, and guidelines for cost management. This strategy should include short-term and long-term objectives to help prioritize cost optimization efforts. It should also define the metrics and key performance indicators (KPIs) you’ll use to measure and track cost performance and progress.

Step Three: Establish Roles and Responsibilities

Cloud cost management is the shared responsibility of teams, departments, and stakeholders. Assign key stakeholders to take ownership of your organization's cost management, ensuring every team member knows their role in managing cloud costs. Establish clear communication channels and feedback loops to ease information sharing and ensure effective decision-making.

Step Four: Educate and Train your Team

Cloud cost management requires knowledge and skills that aren’t necessarily familiar or intuitive to everyone in your organization. Providing training on AWS cost management best practices and tools ensures your team has the competencies necessary to manage costs effectively. The cloud landscape is always evolving — you should encourage a culture of continuous learning and improvement to keep up.

These steps will help you lay the foundation for AWS cloud cost management within your organization. However, to achieve cloud cost optimization at scale, you must also automate many of these tasks. Fortunately, Kion can help you do just that.

Kion: Your Solution for Managing AWS Costs at Scale

Kion is a cloud cost management solution that integrates tightly with AWS and provides unified reporting across accounts. With Kion, you can automate budget enforcement, proactively identify savings opportunities, and optimize cloud spending.

Some of the features that make Kion stand out include:

  • Tight integration with AWS cost management toolsKion works seamlessly with AWS to simplify cost management and give you a unified view of your cloud expenses.
  • Unified reporting across accounts — Kion gathers and consolidates cost data from multiple AWS accounts, making it easy to analyze spending patterns and identify savings opportunities. You can create custom reports, filter by tag, region, service, or resource, and compare costs over different periods.
  • Automated budget enforcement — Kion provides automated budget enforcement. You can set up alerts for when your spending exceeds a set threshold and take action to remedy the issue — for example, by freezing resources or terminating instances.
  • Proactive identification of savings opportunities — Kion constantly monitors AWS resource usage and proactively identifies optimization opportunities, such as rightsizing instances, purchasing reserved instances, or using spot instances.

Conclusion

Organizing and managing AWS costs can be complicated, especially with multiple accounts and complex cloud architectures.

As well as following best practices, you require solutions to help you simplify cost management, optimize resource usage, and enforce budget controls at scale. Kion integrates with AWS and provides unified reporting across accounts to do just that. With Kion, you can consolidate cost data from multiple AWS accounts, automate budget enforcement and alerts, and proactively identify and implement savings opportunities.

Whatever the size of your cloud footprint, Kion can help optimize your resource usage and reduce your cloud bills. Learn more about managing costs with Kion today.

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