AWS Cost Explorer

Managing costs effectively is crucial for organizations using cloud services like Amazon Web Services (AWS). AWS Cost Explorer is a powerful tool that provides insights into your AWS usage and costs, enabling you to make informed decisions about resource optimization and budgeting. In this article, we'll explore how to leverage AWS Cost Explorer to improve cost management on AWS.
December 22, 2022
min read
Yehonatan Rumyantsev
Cloud Specialist
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TL;DR

Managing costs effectively is crucial for organizations using cloud services like Amazon Web Services (AWS). AWS Cost Explorer is a powerful tool that provides insights into your AWS usage and costs, enabling you to make informed decisions about resource optimization and budgeting. In this article, we'll explore how to leverage AWS Cost Explorer to improve cost management on AWS.

  1. Understand Your AWS Usage and Costs

AWS Cost Explorer provides a visual representation of your AWS usage and costs over time. By analyzing these trends, you can identify patterns, spikes, and inefficiencies that might require attention. Cost Explorer allows you to view your costs by service, region, and linked accounts, providing a granular understanding of where your expenses are coming from.

  1. Use Cost Allocation Tags

Cost allocation tags are key-value pairs that you can assign to AWS resources, allowing you to categorize and track costs based on specific criteria, such as project, department, or environment. By using cost allocation tags in Cost Explorer, you can filter and group your costs to gain better insights into your spending. This can help you identify areas for cost optimization and allocate budgets more effectively.

  1. Set Custom Cost and Usage Reports

AWS Cost Explorer enables you to create custom reports that focus on specific aspects of your costs and usage. For example, you can create a report that shows EC2 instance usage by instance type or RDS costs by database engine. Custom reports can help you identify trends and anomalies that might not be apparent in the default views provided by Cost Explorer.

  1. Forecast Your Future AWS Costs

Cost Explorer's forecasting feature uses machine learning algorithms to predict your future AWS costs based on your historical usage patterns. By analyzing these forecasts, you can make proactive decisions about resource provisioning, budget allocation, and cost optimization strategies. This can help you avoid unexpected cost overruns and ensure that your AWS spending remains within your desired limits.

  1. Set up AWS Budgets

AWS Budgets is a cost management feature that integrates with Cost Explorer to help you define and track budgets for your AWS usage. By setting up budgets based on your Cost Explorer analysis, you can receive alerts when your spending approaches or exceeds your predefined limits. This can help you maintain control over your costs and ensure that your AWS usage remains within your budgetary constraints.

  1. Analyze Reserved Instances and Savings Plans

Cost Explorer provides detailed information about your Reserved Instances and Savings Plans, including utilization rates and potential savings. By analyzing this data, you can make informed decisions about purchasing new reservations or modifying existing ones to optimize your costs. Cost Explorer also offers recommendations for purchasing new Savings Plans based on your usage patterns, helping you maximize your cost savings.

  1. Monitor Unused and Underutilized Resources

Cost Explorer allows you to identify unused or underutilized resources, such as idle EC2 instances or unattached EBS volumes. By monitoring these resources, you can take action to reduce costs by terminating or downsizing instances, deleting unused volumes, or adjusting your auto-scaling policies.