Cost Effective Resources

Cost efficiency is one important aspect when designing solutions in the cloud, a non-cost effective architecture can compromise full projects by making them unviable. It is really easy to lose control of expenses when running multiple environments with numerous teams. There are many strategies to keep costs at the minimum and identify non-cost compliant resources; AWS provides several services that working together can make the best to keep budgets under control. We will discuss the well-architected principles and best practices for costs optimization.

Pooled resources and serverless services reduce your costs significantly by removing the necessity to maintain and operate compute infrastructure. Managed services are cost-effective because they improve the Return on Investment (ROI) and minimize the total cost of ownership (CTO) for any kind of technology...

Technical requirements

IAM users will require special permissions in order to interact with the billing and cost management console, for additional information to grant users access please navigate to the following link https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/grantaccess.html.

Reserved Instances

Reserved Instances (RI) have two objectives: the ability to reserve capacity for when you need it. Imagine a stakeholder event where you want to make a demo with a specific instance type, and to create savings in your account.

Reserved Instances work by purchasing instances of specific types. When those reserved instances match attributes for your currently running on-demand instances, they are billed with the RI model.

Standard Reserved Instances

It is possible to specify the term of how long you will reserve the instance. This can be chosen for 1 or 3 years, the latter being the most economic term. Besides the term, other factors like instance type, size, and availability zone are also used to price the...

Billing and cost management

The Billing & Cost Management Dashboard provides a place to manage the economics of your account. Here you can visualize your costs grouped by several dimensions as service, region, or a specific tag. You can find trends and patterns in usage, you have the ability to configure budgets to keep your expenses under control when the forecasts or limits have been exceeded and receive Reserved Instances recommendations based on use.

One of the key advantages of cloud computing is the trade of capita expense for the variable expense by paying only what you use and when you use it with No Upfront investments. However in some cases making upfront investments can lower your costs up to 75%.

To navigate to the billing dashboard you must have explicit permissions or be logged as root. Navigate to your account data, as shown in the following screenshot:

The...

AWS Organizations

AWS Organizations are a way to centrally manage account hierarchies that resemble organizational structures that make sense from the management, security, and billing perspectives. When you create an organization you have the ability to create organizational units (OUs) and apply black or whitelisting IAM policies that override IAM user policies favoring the former.

To centrally manage billing an organization is needed and for this purpose, a master account must be chosen to manage the entire organization of linked accounts.

1. To get started with organizations navigate to the AWS console and search for AWS Organizations.

2. You will be prompted to create a new organization, use this option to get started. The next step is to send invites to linked accounts; you will need the managed account ID.

3. The linked account will receive the invitation in the same organization...

Summary

In this chapter we took a deep dive into cost management tools, we started by understanding the benefits and characteristics or Reserved Instances. Then we moved to the AWS console Billing Dashboard to understand the most important capabilities of the service and provided several examples to understand usage like billing alarms, billing reports, the Cost Explorer, and the Cost Allocation Tags.

We ended this module with a practical example of QuickSight for analyzing billing data creating a custom dashboard, and consolidated billing using two different accounts with the AWS Organizations service.

Further reading

• Consolidated billing process: https://docs.aws.amazon.com/es_es/awsaccountbilling/latest/aboutv2/useconsolidatedbilling-procedure.html
• Other Reports: https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/billing-reports-other.html