How to Control Your AWS Cost Budgeting in 2023

Many organizations are currently shifting their applications and services to cloud models such as Software as a Service, Infrastructure as a Service, and Platform as a Service. As a result, a significant portion of their budget is now allocated to cloud providers and solutions. With this, keeping track of the cloud bill and AWS budgets is crucial. Therefore, solutions like AWS cost optimization and AWS cost management have become a disciplinary protocol, requiring specific tools, economic models, and cost reduction strategies.

Here are the top 5 best practices for better understanding AWS spend and staying on top of the game.

If you have built your product or service in a single AWS account, that proves beneficial due to a number of reasons. Firstly, It’s great for prototyping, self-learning, or academic purposes, ensuring a direct way to monitor and report the cost of resources like Amazon EC2 instances, Amazon Kinesis Streams, Amazon DynamoDB tables, and others.

But this matrix doesn’t add up for a maturing startup and is therefore no longer a practical approach. A maturing enterprise must enable AWS organizations to create and manage the accounts, apply top-down policies, and place them in a proper hierarchy. These policies are vital components to control the costs when you start to scale.

It’s recommended to create a new AWS account and enable an AWS organization. This account shall be the master account to collect, monitor, and report on the costs, with better production, development, and security.

Getting familiar with AWS cost management tools and understanding AWS cost explorer is recommended protocol. Following through with this, all your costs across AWS accounts can be sliced, drilled, diced, and monitored from hourly to yearly insights. Businesses can also group their data by attributes like Usage Type, Service, Region, and other understandable chunks.

From the AWS cost management dashboard, you can forecast the spending for the remainder of the month. It tracks the anomalies and further digs into ways to save you up on expenditures. Among AWS budgets vs. cost explore, the latter provides several default dimensions across the board to analyze spending. All of these dimensions are predominantly based on the attributes regarding infrastructure and align the costs for the business.

Applying tags to gain valuable insights into your AWS resources is essential. To get started, define a Tag Policy for your brand to specify the required tags and their allowed values. Organizations can then quickly identify non-compliant resources and enforce mandatory compliance. Common tags include Cost Center, Customer, Application, or Project, and more ideas can be found on our Tagging Strategies page.

If you’re not ready to enable AWS Organizations, you can still enforce a tagging policy using IAM Policy Conditions and monitoring with AWS Config Tags can be applied in various ways, including in Infrastructure as Code templates or the Tagging API. In addition to regularly checking Cost Explorer, you can set up proactive alerts for when your spending will exceed your desired threshold using our next practice, AWS Budgets.

AWS Budgets offers various metrics to monitor, such as costs, usage, reservations, and savings plans. However, it’s better to start with budget pricing. With AWS budget alerts, you can select any AWS-provided or custom dimensions created through tagging.

Businesses can also specify a spending limit for a particular service or resource with a specific tag, either as a fixed dollar amount or a percentage of their target spend. Additionally, they can configure multiple alerts for the budget, such as receiving the first alert when you reach 50% of your spending threshold and a second alert at 80%.

To ensure optimal usage, it is essential to consider the pricing of each service, understand the cost factors and available discount models, and adjust the business architecture accordingly.

For instance, DynamoDB is a popular service known for its high performance and low overhead as a NoSQL database. Its pricing page offers two cost models – on-demand capacity and provisioned – with detailed information on how various functions like request number and record size affect cost.

Managing costs on Amazon Web Services involves creating a budget, monitoring spending on AWS resources, and minimizing wasteful spending. Under Cloud Financial Management tools, businesses can follow industry standards and guidelines for cost optimization.

In addition to managing costs, choosing the appropriate amount of computing power, storage, and other cloud resources is essential for optimal performance. Ongoing efforts to increase awareness of cloud expenditures are necessary for effective AWS cost optimization. Planning, setting a budget, monitoring spending closely, and controlling your account is essential to avoid unexpected charges.

Here are some powerful AWS cost management tools that can change the fortune of your business.

The AWS Budgets interface or the Budgets API can help set up and monitor your budgets. Enterprises can track their budgets monthly, quarterly, or annually, with start and end dates. Administrators can gain further insight by viewing expenses across various dimensions, such as services, connected accounts, and tags.

AWS Budgets allows the first two budgets to be set up for free, up to a limit of 20,000 budgets. Additional budgets will incur a daily fee of $0.02.

With AWS Cost Explorer, you can swiftly monitor your account’s spending, track usage statistics, identify spending patterns, investigate unusual charges, and pinpoint unnecessary expenses. The tool generates standard reports, allowing the administrator to create personalized reports based on specific dates, categories, filters, and projections.

It provides detailed reports on monthly spending for individual services like Elastic Compute Cloud (EC2), running AWS, and RIs. Administrators can access the AWS Cost Explorer API through the AWS CLI and SDKs, allowing them to query the tool’s engine directly.

This eliminates the need for additional systems and enables the creation of unique and interactive cost cost-control applications. Additionally, AWS Cost Explorer offers RI reports, allowing administrators to view utilization and coverage statistics for individual RI subscriptions.

Easily monitor the usage of Amazon services by any profiles or IAM users with the AWS budgets tool. It displays hourly or daily items and cost allocation tags as columns. It allows businesses to keep track of their RI instances’ usage and success rates and stores AWS Cost and Usage report information in an Amazon S3 bucket and access reports through the Amazon S3 API or S3 console.

The AWS budget offers multiple ways for enterprises and SMBs to learn, monitor and control their spending like a pro. The AWS cost management dashboard and the tools that come with, help better manage the cloud infrastructure’s budget. Using the power and functions of the AWS Budget, you can track your money, where you can cut down on expenditures and ensure effective results with specific solutions backing your organizational structure.

It is pivotal to manage the costs and use the right tools. When it comes to something as valuable as your business, specialized and widely trusted service providers like NETSOL, well versed in the best practices can assist and familiarize you effectively. For a free consultation, connect with us here.