IT departments everywhere know the advantages of increasing their company’s AWS usage. However, these folks often struggle when they attempt to translate the costs and returns of their Cloud use into a language that the rest of their business can understand.
Fortunately, those who face difficulty in conveying the mechanics of their AWS use have a powerful tool at their disposal: AWS cost allocation reports. Through the use of tags to generate these reports, you can see exactly where your AWS spending is going in a language that your ops and finance teams can appreciate.
It’s easy to identify how much each of your departments is spending on cloud resources by using tags. With this data in hand, figures in finance and management can make clear and informed decisions about which departments are spending at appropriate levels and which need to be reigned in.
AWS costs allocated by department
The process begins by tagging each resource according to which department uses it; for example, an EC2 instance used by R&D would be assigned a “department=R&D” tag along with all other resources they use.
Similarly, all resources used by the marketing department would be assigned a “department=marketing” tag, all resources used by customer service would be assigned a “department=customer service” tag, etc, until every single resource is tagged according to the appropriate department.
Once all resources are tagged, you can create an AWS cost allocation report to see your spending broken down by department. For example, by viewing the combined costs of every resource with the “department=R&D” tag, you can see how much the R&D department is spending total. You can then compare this to the combined costs of every resource with the “department=marketing” tag, and see which of your cost centers is spending more— and by how much.
Through the use of tags, you can measure the costs of each service that your company offers and determine the profits accordingly. With this information easily available, you can make educated decisions regarding the scale and lifespan of each of your services.
AWS costs allocated by service
For example, say your company offers three levels of service: the free trial called “Bronze Level,” the standard paid service called “Gold Level,” and the advanced paid service, “Crystal Level”; if you’d like to determine how much it costs your company to provide each of these services, you can do so by tagging every resource that powers each of those services.
Your company’s Bronze Level service is powered by several resources; assign a “service=bronze level” tag to those resources. Your Gold Level service is powered by several more; assign a “service=gold level” tag to those resources. Finally, assign a “service=crystal level” tag to the resources used by your Crystal Level service.
After you have tagged every resource used to power your services, you can view the cost of every resource used by the Bronze Level service by viewing every resource with the “service=bronze level” tag. Compare that to the cost of all of your resources tagged with “service=gold level” or “service=crystal level” to see how much it costs your company to provide each service.
You can then compare this information to the profits that each service aggregates in order to determine the ROI of each service. If the total spending for your Bronze Level service— that is, the combined cost of every resource tagged with the “bronze level tag”— is considerably higher than the spending for your Gold Level service, then that means that supporting free trials is proving quite costly for your company. Your CFO may reflect on this data and determine that scaling back or decommissioning your Bronze Level service would be a reasonable financial decision.
If you want to build an AWS cost allocation report of how much a specific instance costs, you can do so by using tags. With this information, you can determine whether specific instances are inordinately expensive.
AWS costs by instance
To build a report of how much each instance costs, begin by giving each instance a value for the “Name” tag. Once you’ve done so, you can easily create a custom report by displaying the “Name” tag reported by “Total Invoiced Cost.” This will display the exact cost of each instance.
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