AWS Knowledge
How to Analyze AWS Costs Using AWS Cost Explorer 2025
Piyush Kalra
Jan 21, 2025
AWS cloud computing is the best in terms of scalability and flexibility, but it has become a pain in the neck for some business people due to its high costs. Why do you keep receiving hefty bills? What are the services that cause these increases?
This is where AWS Cost Explorer steps in – an effective tool meant for analyzing, predicting and optimizing your cloud expenditure.
Being a cloud engineer, part of a tech startup or responsible for FinOps at your organization necessitates monitoring cloud expenses to ensure financial effectiveness with up to 30% reduction costs based on unnecessary charges found by using AWS Cost Explorer.
This guide will break down AWS Cost Explorer’s features and ensure that your spending on clouds does not exceed what you have planned for.
What Is AWS Cost Explorer?
AWS Cost Explorer is a web-based cost management tool whereby clients can scrutinize and portray their cloud outlays over time. This tool makes the process of tracking costs simple by splitting consumption into types such as service and category or breaking it down according to particular time periods, hence providing a bird’s eye view of spending as well as detailed notifications on where the money goes.
Key Features of AWS Cost Explorer
Data Visualization: One can use graphs and charts to observe trends in expenditure.
Customizable Filters: Filter cost data by service, region, instance type, or usage to zoom in on specific drivers of your AWS bill.
Historical and Forecasting Analysis: View historical costs (up to 13 months) and forecast expenses for the next 12 months based on usage trends.
Savings Opportunities: Look up wasteful tools or advice for managing Savings Plans and Reserved Instances so that you spend less.
Integration with AWS Budgets: You can set your own budgets and get alerts whenever your spending limits are exceeded.
All AWS services are compatible at no charge, but additional fees can be incurred for premium features like AWS Cost explorer API access.
Why Analyze AWS Costs?
Cloud spending can quickly become overwhelming, notably for rapidly growing start-ups, if it is not monitored carefully. The understanding and analysis of cloud costs have significant advantages that can improve financial control and operational efficiency.
Why AWS Cost Analysis Matters
Pinpoint Spending Areas: Break down your expenses to see which services, projects, or teams drive the costs incurred. This helps you know where exactly your money goes.
Eliminate Wasted Resources: Spot underutilized resources or over-provisioned services to make them efficient and reduce unnecessary expenses.
Plan Budgets with Confidence: Make estimates based on comprehensive cost breakdowns so you can effectively allocate resources in future.
Make Smarter Decisions: Apply clear data to craft better cloud strategies, negotiate AWS pricing terms, and shape usage patterns for optimal value.
The lack of routine cost analysis can cause companies to overspend on cloud services, thus eroding profit margins and putting strain on their operational budgets. By being proactive, you can be sure that your cloud investments match your business objectives.
Getting Started With AWS Cost Explorer
Activate AWS Cost Explorer to unlock a complete view of your cloud costs. Follow these simple steps to get started:
Step 1: Enable AWS Cost Explorer
Log into the AWS Management Console.
Navigate to "Billing and Cost Management."
Click on "Cost Explorer" in the navigation panel.
Select "Enable Cost Explorer."
Step 2: Know Your Dashboard
The AWS Cost Explorer Dashboard outlines month-to-date charges, forecasts month-end costs, and highlights AWS cost trends.
Step 3: Learn Navigation Tips
Use filters to refine data by specific parameters, like service or account.
View daily, monthly, or even hourly costs to understand usage patterns.
Check out the Top 5 Services Chart for a snapshot of key expenditure categories.
Using AWS Cost Explorer for Deep Cost Analysis
AWS Cost Explorer offers various tools for detailed cost analysis, predicting future costs and even creating custom reports. Note: Some advanced deep analysis features may attract extra charges.
Analyze Cost Reports
After enabling the tool, one can easily track and analyze their cloud spending by using the cost reports that are provided by it:
Access Pre-Built Reports: AWS gives you some default reports like “Monthly EC2 Usage” or “Top Spending Accounts”. Adjust them or make your own reports so they can fit your team's goals.
Utilize Filters and Grouping: Drill down deeper by filtering your expenses by AWS service, region, or time frame. You can also group them together to show spending patterns, such as projects or linked accounts.
Analyze Historical Data
You can look up to 13 months of usage data history to find AWS cost trends or anomalies. This is especially useful for identifying seasonal spikes or reducing over-provisioning.
For example, it could be realized by a start-up that during mobile app launches, their EC2 instances’ prices always double, helping them anticipate such situations better in times ahead.
Forecast Future Costs
The forecasting feature uses past data to predict expenditure tendencies within 1-12 months into the future.
For example, If your monthly Amazon S3 storage spend increases by 10%, then forecasting will alert you on this potential increment in advance, thereby allowing you to plan ahead for it accordingly.
Customize Reports
Reports should be customized to suit the needs of different stakeholders, from engineering teams to financial departments. They can then be saved and shared with teammates for better cooperation. However, it is worth noting that some customization options needed for in-depth analysis may require additional charges.
Best Practices for Optimizing Costs
When leveraging Cost Explorer, the primary aim is not just cost tracking but also moving towards optimizing costs. Here are effective best practices that guarantee the efficient use of AWS in your organization:
Leverage AWS Cost Allocation Tags: Assign AWS cost allocation tags to organize spending by team, project, or environment. Tags simplify cost analysis and help track spending at a granular level.
Conduct Regular Reviews: Lan monthly or quarterly reviews of how much has been spent on AWS. Such reviews help eliminate unnecessary resources like unused RDS snapshots, improving ROI.
Adopt Recommendations: Use AWS Trusted Advisor and Cost Explorer’s recommendations for Savings Plan and Reserved Instances – commitments of usage that offer discounted pricing to understand their differences better and reduce expenses.
Enable Alerts with AWS Budgets: Stay on top of anomalies or potential cost overruns by activating budget alerts for each project.
Automate Cloud Savings with Pump: Take away the stress of managing your AWS costs by letting Pump do it all for you. Our platform forecasts usage and automatically buys the most suitable Reserved Instances or Savings Plans, making sure you receive the biggest discounts attainable. With Pump, you can cut down up to 60% across 13 different AWS services.
AWS Cost Explorer vs. Other Tools
Apart from that, AWS provides other cloud cost management tools such as AWS Budgets and Cost and Usage Reports. Here is a quick comparison of when to use either tool based on your needs.
ToolBest ForFeaturesAWS Cost ExplorerQuick cost insights and trendsForecasting, visualization, and recommendationsAWS BudgetsReal-time spending alertsSet budget thresholds and receive notificationsCost and Usage ReportGranular data for custom analysisExport line-item billing reports to integrate with third-party tools like Tableau
When to Use AWS Cost Explorer
For high-level insights into cloud costs.
When forecasting for budgeting purposes.
To identify AWS cost savings opportunities through resource recommendations.
Conclusion
AWS Cost Explorer is not only a cost analysis tool; it is an essential tool for any company that wants to remain competitive, scale efficiently, and avoid unnecessary expenditures. Whether you are forecasting future expenses or drilling into costs per resource level, this software will facilitate actionable insights that will empower your organization.
What’s next? Enable AWS Cost Explorer today to cut down on expenditure for better ROI.
By managing your AWS costs, you are paving the way for consistent growth that can be scaled.
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