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How to get cloud cost reporting under control

Patrick McClory, SVP of Platform Engineering and Delivery Services, Datapipe | April 25, 2016
You have to standardize on a set of descriptive tags to identify the assignment of resources to cost centers.

Although vendor-written, this contributed piece does not promote a product or service and has been edited and approved by Executive Networks Media editors.

A recent report  by RightScale says 71% of companies surveyed have adopted hybrid cloud, up from 58% year-over-year, but concern over cloud costs has risen to 26% from 18% three years ago. If you’re struggling to gain control over your cloud cost accounting, there’s no time like the present to address it. Solving this issue isn’t necessarily difficult when it’s tackled early, but left to languish the amount of support and technical debt you incur can become insurmountable.

At the core of this problem is the need to gain greater clarity into the breakdown of your spend based on actual usage, allowing for greater understanding of direct costs and a more granular means of managing it. This clarity comes with a catch - your ability to standardize on a set of descriptive tags to identify the assignment of resources to cost centers within your business.

Whether you’re just starting off in cloud or you’re trying to get your cost reporting under control, there are some pretty simple steps that will help you cut through the confusion and concern.

Get organized and keep it simple

For most Infrastructure as a Service (IaaS) solutions, when you begin to deploy resources you’re able to add some level of descriptive tags to help identify and organize them in a meaningful way. For most cloud cost management tools, these tags associated with resources are the dimensions on which you’ll be able to directly segment cost. As you’ve probably guessed, harnessing this tagging structure is the first critical component in identifying where your cloud costs stem from.

If you’re utilizing an Amazon Web Services (AWS)-native, tag-based solution, you should first turn on Detailed Billing Reporting with Resources and Tags. Enabling this will provide you with the core data set you can start digging into. Then there are three big decisions you need to make in terms of how you apply this to your environment:

  • You need to balance how you’re going to use tags (Note: tags in AWS are limited to 10 per object). Balancing functional and cost allocation usage of tags takes some finesse. Keep in mind that developers and infrastructure engineers may want to use tags for things like clustering and service discovery, so monopolizing all 10 tags in AWS for billing purposes may impact their approach to these problems and force them to implement a non-optimal solution.
  • You need to know what you’re able to tag and how that affects your usage of those resources (i.e. S3 buckets can be tagged, but not objects). This may also affect how you use these services once you decide how you’re going to segment costs.
  • You need to decide when resources need to be tagged. Some organizations unknowingly destroy untagged or incorrectly tagged resources automatically as a part of their governance routines. Be wary of this when you’ve begun this process to avoid undoing your efforts to segment costs.

 

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