Cloud Cost Management: A Practical Guide

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Cloud Cost Management

Cloud cost management is an essential practice for modern businesses operating in an increasingly digital landscape. As cloud infrastructure becomes more intricate, understanding and controlling the associated costs is paramount.

With cloud services such as AWS, Google Cloud Platform, and Azure offering versatile cost management tools, businesses have the means to maintain visibility, set budgets, and ensure efficient resource utilization. By integrating these tools into a cloud cost management strategy, organizations can enjoy the full benefits of cloud computing, including scalability and flexibility, while ensuring costs remain predictable and manageable.

What Is Cloud Cost Management?

Cloud cost management is an organizational practice that helps businesses understand and manage the costs and requirements associated with cloud technologies. Its main goal is to find more efficient cost-effective ways to use the cloud.

Cloud infrastructure is becoming more complex and as a result, cloud costs are difficult to track, visualize, and predict. The pay-as-you-go pricing model used by most public cloud providers makes this problem worse because spending can fluctuate dramatically depending on the actual resources being used.

Proper monitoring and management of cloud usage is critical, but in many cases, will be difficult to achieve. When decisions are distributed across the organization and individuals can launch and incur costs on cloud services with little or no responsibility, costs can quickly get out of control. A cloud cost management strategy helps businesses create a framework for budgeting and shared responsibility, to ensure that cloud resources are used sensibly and with the appropriate controls.

The Importance of Cloud Cost Management

Rapid scalability and no upfront costs are huge advantages of cloud computing. They make it easy for IT staff and DevOps teams to get started with services, but at the same time, create the risk of unplanned costs that exceed expected budgets. Implementing a cloud cost management strategy helps organizations plan for future costs and consumption of cloud services.

For companies with a multi-cloud portfolio, which is now the norm, it is also important to implement effective multi-cloud cost management, comparing and monitoring the costs of multiple public cloud providers. Better visibility into costs and usage enables businesses to enforce enterprise-wide accountability, improve the performance and efficiency of cloud technologies, and make educated decisions about which workloads to run in which cloud.

Cloud cost management can also help organizations maximize resource utilization. Most cloud providers offer basic cost management tools that can achieve this. There are more specialized third-party solutions that provide additional visibility and insight into your cloud costs, which can be critical to controlling costs and implementing good governance.

Cloud Cost Management Tools from the Leading Cloud Providers

AWS Cost Management Tools

Amazon Web Services’ cost management tools include:

AWS Cost Explorer

Cost Explorer has a user-friendly interface to help customers view, analyze, and manage their AWS usage and costs over time. It offers several default reports that can be a starting point for cost analysis.

AWS Cost Categories

The Cost Categories feature is part of the AWS Cost Management suite. It lets customers group usage and cost data into semantic categories based on their specific requirements. It supports custom categories that display cost-related information based on predefined rules, referencing dimensions like account, service, tag, and charge type.

AWS Budgets

The Budgets feature lets customers create budgets for tracking their usage and costs across various use cases. It supports SNS and email notifications to alert customers when costs approach or exceed the specified budget thresholds. Alerts can also indicate if Savings Plan coverage falls below the specified threshold.

AWS Cost and Usage Reports (CURs)

A CUR contains detailed AWS usage and cost information. They contain added metadata about reserved instances, savings plans, services, credit, pricing, fees, discounts, and taxes. It itemizes AWS usage based on usage type, product, and operation at the organization or account level. CURs are available at the member or management account levels and at monthly, daily, or hourly levels of granularity.

Google Cloud Cost Management

Google Cloud Platform (GCP) is a public cloud that offers free cost management tools. There is a charge for storing or processing cost data using Google Cloud services, but the tools themselves are free to use. Google’s cost management tools include:

GCP Pricing Calculator

The GCP pricing calculator allows customers to select cloud services and specify parameters like specifications, instance numbers, and the expected monthly running time. It assesses data transfer and storage requirements to provide detailed cost estimates. The calculator can also compare the cost of GCP against other cloud service providers.

GCP Resource Hierarchy

GCP lets customers establish a granular resource hierarchy to control access permissions and cloud service cost parameters. It supports policies incorporating quotas and cost parameters at various hierarchy levels, applying the policies to both the current node and all its children.

Billing Access Control

The Google Cloud Identity and Access Management (IAM) solution lets customers assign access roles at all levels of the resource hierarchy for cost management activities. Google’s cloud IAM supports several billing access roles, including the billing account creator, administrator, user, viewer, and project billing manager.

GCP Quotas

GCP project owners can apply hard limits to their project’s resource consumption. Allocation quotas determine the maximum number of instances that can run per project, while rate quotas limit the number of read/write operations per given timeframe (i.e., a day). Rate quotas reset after the specified period.

Azure Cost Management

Azure’s cost management tools include:

Azure Price Calculator

The calculator estimates Azure service costs based on the customer’s settings. It provides a breakdown of each service’s costs depending on the specified details, allowing customers to plan their Azure costs upfront.

Azure Cost Analysis

The Cost Analysis tool breaks down Azure cost details to provide in-depth views based on groups and filters. It lets customers assess the cost of each service and compare it to the estimated cost. This capability is important for tracking Azure spending to avoid surprises.

The Cost Analysis dashboard supports filters such as time, scope, granularity, and groups. The results are exportable to Excel or CSV, and customers can schedule regular exports.

Azure Cost Alerts

Azure offers three cost alert types:

  • Budget alerts – notify customers when costs approach or exceed the specified budget. The Azure portal and Azure consumption APIs let customers set budgets to enable automatic alerts.
  • Credit alerts – notify customers when they’ve consumed their credit commitments (90-100% of the credit balance).
  • Spending quota alerts – notify departments when they approach a spending threshold to help them stick to the quota.

Author Bio: Gilad David Maayan

Gilad David

Gilad David Maayan is a technology writer who has worked with over 150 technology companies including SAP, Imperva, Samsung NEXT, NetApp and Check Point, producing technical and thought leadership content that elucidates technical solutions for developers and IT leadership. Today he heads Agile SEO, the leading marketing agency in the technology industry.


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