How to use AWS Cost Explorer to understand AWS costs

Introduction

AWS Cost Explorer is a tool offered by Amazon Web Services (AWS) that can help you gain a thorough understanding of your AWS costs and usage. Mastering the use of AWS Cost Explorer will enable you to achieve more significant cost savings and a reduction of your AWS bill.

What is AWS Cost Explorer

AWS Cost Explorer is a responsive web-based interface that provides access to detailed information about your AWS costs and usage. This service is designed to make it easy for users to analyze their costs and usage in the AWS Management Console.

Cost Explorer provides a view of your AWS cost data, with up to 13 months of historical data. By fetching the past year's data and predicting how much you're likely to spend for the next three months, AWS Cost Explorer provides an extensive cost analysis environment. With this tool, you can determine which services are costing you the most and then drill down into your costs by accounts, services, usage or tags, to understand the cause and possibly find areas to reduce costs and save money.

Overview of Cost Explorer Features

AWS Cost Explorer comes with a robust set of features designed to help you manage and control your AWS costs:

• Data Granularity: It gives you the ability to view data at daily or monthly granularity, allowing you to detect daily cost spikes or review long-term trends.

• Cost & Usage Reports (CUR): This feature provides comprehensive cost and usage data, allowing users to analyze their costs in detail and optimize resource usage.

• Cost Allocation Tags: With the help of AWS tags, you can organize your AWS resources and then track your AWS costs on a detailed level.

• Forecasting: AWS Cost Explorer uses your historical cost trends to forecast your AWS costs for the next 12 months.

• Cost Anomaly Detection and Alerts: Cost Explorer also helps you set up anomaly detection for unexpected cost increases, adding an extra layer of safety.

Understanding your AWS Spending with Cost Explorer

To fully understand your AWS spending, we'll need to dive deeper into the various aspects of Cost Explorer and how it reports and presents the data.

Analyzing Current Spending

To start analyzing your current spending with AWS Cost Explorer, sign into the AWS Management Console, then navigate to "My Billing Dashboard" > "Cost Explorer." Here, you'll find your current month costs, a forecast of your costs until the end of the month, and a graph showing the daily costs since the beginning of the month.

If you click View on Cost Explorer, you'll open the Cost Explorer tool where you can filter the graph by a specific time range, linked accounts, services, and tags.

For example, let's say you wanted to understand your costs for the last 30 days for a specific service like RDS. On the panel on the right select the "Service" filter, pick Relational Database Service (RDS) from the list. Then adjust the date filter to the last 30 days. This will give you a detailed graph representing your RDS costs for the last 30 days, with a daily granularity. You can configure many other filters such as usage (which will filter different uses of the service, such as RDS instances, RDS snapshots, etc), accounts, etc.

Using AWS Cost Explorer Reports

Cost Explorer comes with several pre-configured reports that provide a detailed view of your cost and usage data. You can modify these reports to meet your needs, and you can also create custom reports that you can save and share with others. Some of the standard reports include:

• EC2 Monthly Cost and Usage Report: This report provides a monthly view of your Amazon EC2 costs and usage.

• Monthly Costs by AWS Budgets: If you have set up AWS Budgets, this report provides a monthly view of your costs grouped by each of your budgets.

• Monthly Costs by Linked Account: This report shows how costs are distributed across your linked accounts.

In each of these reports, you can drill down further to understand the cost drivers better. To access these reports, click Reports on the menu on the left.

How to Automate Management of AWS Spending

Efficiently managing AWS spending is a crucial part of optimizing the use of cloud resources. AWS provides various tools, such as AWS Cost Explorer, AWS Budgets, and AWS Cost and Usage reports, to help automate this process.

Setting Up Cost Explorer Budgets

1. Sign into your AWS Console and navigate to Billing & Cost Management.

2. Click on Budgets in the navigation pane.

3. Click on the "Create budget" button and choose the "Cost budget" type.

4. Name your budget and define the budget parameters. You can set your budgeted amount, choose the period (monthly, quarterly, or annually), and select whether your budget tracks costs or usage.

5. Configure your filters. You can filter by service, linked account, or tags, which allows you to create specific budgets for different departments, projects, or applications.

6. Set up alerts to notify you when your usage or costs exceed the thresholds you set. AWS Budgets can send alerts to up to 10 email recipients when your usage or costs exceed the actual or forecasted amount you set.

7. Review your budget details, then click "Create".

Now, AWS will automatically track your costs or usage against your budget and send you notifications when your usage or costs exceed the thresholds you set.

Monitoring Cost Trends

Monitoring cost trends can be done effectively using AWS Cost Explorer's reports. Here's how to set this up:

1. Navigate to the AWS Cost Explorer on the AWS Management Console.

2. Click the "Cost & Usage Reports" option in the navigation pane.

3. Create a new report. Specify the time period you're interested in, and select the granularity of data you require (hourly, daily, or monthly).

4. Select your desired filters to break down costs by service, region, or tags.

5. Save this report and give it a name.

You can now retrieve this report anytime to monitor cost trends for your specified filter and time period.

Using these steps, you can automate the management of your AWS spending, allowing you to focus more on your core business tasks while staying on top of your cloud spending.

Keep in mind that these tools won't automate cost reduction, only the generation of reports and alerts that will help you understand your AWS costs. If you want to automate the reduction of your costs, you should use tools such as Pump, which can reduce your AWS bill by 60%, completely automated and for free.

Managing Cloud Costs and Reducing your AWS Spending

Cloud cost management is not a one-time activity; it's a continuous process that requires understanding your cost drivers and regularly reviewing and adjusting your spending. AWS Cost Explorer provides an easy-to-use interface that gives you the power to visualize, understand, and manage your AWS costs. It is an essential tool in your arsenal for efficient cloud spending management.

After getting the information from Cost Explorer, you'll need to apply a combination of these strategies to reduce costs:

• Purchase Reserved Instances or Savings Plans: Reserved Instances and Savings Plans are commitments of usage that you can purchase at a discounted price. Understand the difference between Reserved Instances and Savings Plans.

• Eliminate unused resources: Cost Explorer helps you find unused resources, such as forgotten database snapshots or unutilized EC2 instances. Verify that those resources are indeed unused, and delete them.

• Rightsize resources: Cost Explorer will inform you about significant spendings, such as large EC2 instances. Once you've identified them as a considerable spend, you can [use AWS Compute Optimizer to find overprovisioned EC2 instances](link to a future article about this topic), and reduce their size accordingly.

• Automate Cloud Savings: Use Pump to automatically reduce your AWS bill. Pump will forecast your individual spend and auto purchase the most optimal Reserved Instances or Savings Plans on your behalf, so you get the maximum discounts. Learn how Pump can reduce your AWS spending by 60%.

Conclusion

Managing your AWS costs effectively can lead to substantial savings and more efficient use of resources. As with anything, the key to managing costs is understanding them, and understanding comes from having all the necessary information. AWS Cost Explorer not only gives you all the information about costs and your cloud spend, but it also lets you filter and analyze that information, so you can easily understand where you should put your focus.

Summary of Key Benefits of AWS Cost Explorer

The AWS Cost Explorer provides a clear and detailed view of your AWS costs, enabling you to identify trends, uncover cost drivers, and spot anomalies. The features offered by AWS Cost Explorer are tailor-made to help you analyze your AWS costs, making it easier for you to understand where your money is going. This information, in turn, will help you determine where your cost reduction efforts should be applied to maximize impact.