Perform cost analysis for different usage over time

Evaluating cost is crucial for ensuring the sustainability and efficiency of your workloads in the cloud. By performing detailed cost analysis on services based on anticipated usage patterns, you can select architectures that not only meet your operational needs but do so in a cost-effective manner throughout their lifecycle.

Best Practices

Define Cost Requirements Upfront

• Prioritize cost considerations during initial project discussions to align with business objectives. This ensures that all team members understand financial constraints and goals. Implement cost management tools such as AWS Budgets and AWS Cost Explorer to monitor expenses regularly. Establish a cost optimization framework that includes benchmarks for cost efficiency relative to performance and reliability, guiding future service selection. Regularly review and adjust these requirements based on evolving organizational needs and market conditions.

Questions to ask your team

• What are the key business objectives that influence our cost requirements?
• How do we prioritize cost against performance, reliability, and security for this workload?
• Have we established a budget for each service we intend to use?
• Who are the stakeholders involved in defining our cost optimization strategy?
• What metrics do we track to ensure we are meeting our cost goals?
• Are there any current costs that we can reduce through optimization of our service selections?
• How often do we review our cost requirements and adjust our services accordingly?
• Have we considered the trade-offs of using building blocks versus managed services to optimize costs?

Who should be doing this?

Cost Optimization Analyst

• Analyze current service usage and costs to identify saving opportunities.
• Collaborate with team members to gather requirements and expectations regarding cost management.
• Develop cost-benefit analyses for different service options (e.g., EC2, RDS) to guide decision-making.
• Present recommendations for cost optimization strategies to stakeholders.

Solution Architect

• Design solutions that balance cost with performance, reliability, and other pillars.
• Evaluate and recommend the appropriate building blocks and managed services based on organizational requirements.
• Work with engineering teams to implement cost-effective architectures and monitor performance.
• Lead discussions to ensure alignment between cost optimization objectives and technical requirements.

Project Manager

• Facilitate communication among team members about cost-related decisions and strategies.
• Ensure that cost optimization remains a key focus during project planning and execution.
• Align project timelines and deliverables with organizational cost management goals.
• Monitor project budgets and report on cost implications regularly.

DevOps Engineer

• Implement and maintain cost monitoring tools and dashboards for visibility.
• Automate infrastructure provisioning to ensure efficient resource usage and cost control.
• Optimize resource allocation and scaling based on usage patterns and cost considerations.
• Collaborate with the Cloud Financial Management team to refine operational practices for cost effectiveness.

What evidence shows this is happening in your organization?

• Cost Optimization Policy Template: A template for organizations to document their cost optimization policies, including guidelines for selecting AWS services based on cost considerations, while balancing with performance and reliability.
• Service Selection Checklist: A checklist to evaluate AWS service options, ensuring team members consider both costs and organizational requirements when selecting building-block services and managed services.
• Cost Optimization Strategy Document: A comprehensive strategy document outlining the organization’s approach to cost optimization, including objectives, metrics, and service selection criteria that aligns with other pillars.
• Cost Evaluation Dashboard: An interactive dashboard displaying current AWS service costs, usage patterns, and potential areas for cost optimization to assist teams in making informed decisions during service selection.
• Cost-Benefit Analysis Model: A model for conducting cost-benefit analyses for AWS service choices, allowing teams to compare costs against potential performance and reliability gains before making decisions.

Cloud Services

AWS

• AWS Cost Explorer: Allows you to visualize cost data and analyze spending patterns to make informed decisions about resource selection for cost optimization.
• AWS Budgets: Helps you set custom cost and usage budgets, allowing you to monitor costs and take action when you exceed thresholds.
• AWS Trusted Advisor: Provides real-time guidance to help you provision your resources following AWS best practices, including cost optimization recommendations.
• Amazon EMR: Managed Hadoop framework that makes it easy to process vast amounts of data quickly at a low cost, eliminating the need for upfront infrastructure investment.

Azure

• Azure Cost Management and Billing: Enables you to analyze your spending, forecast future costs, and optimize resource allocation based on usage patterns.
• Azure Advisor: Provides personalized best practices and recommendations for optimizing your Azure resources, including cost-saving suggestions.

Google Cloud Platform

• Google Cloud Cost Management: Includes tools to help you track and optimize your spending in Google Cloud, providing insights into your usage trends.
• BigQuery: A data warehouse for analytics that enables you to analyze large datasets efficiently, facilitating cost-effective data processing.

Question: How do you evaluate cost when you select services?
Pillar: Cost Optimization (Code: COST)