AWS Cost Management Services play a crucial role in managing and optimizing costs associated with using Amazon Web Services (AWS). For those preparing for the AWS Certified Solutions Architect – Associate (SAA-C03) exam, understanding these features is key to mastering AWS cost-effectiveness and optimization strategies. This post will cover two important services: Cost Allocation Tags and Multi-Account Billing, essential components of AWS’s cost management services.
Understanding AWS Cost Allocation Tags
AWS tags are essential for gaining insights into your AWS costs. Simply put, tags are words or phrases marked on specific AWS resources (like EC2 instances, S3 buckets, etc.) allowing you to categorize AWS costs across multiple dimensions (such as cost centers, project codes, or owners).
AWS offers two types of cost allocation tags: AWS-generated and User-defined.
AWS-generated tags are automatically applied to resources at their creation. These may be tags like “aws:createdBy” which identifies the IAM user who initiated the creation of the resource.
User-defined tags are created by users and can be anything that aids in cost allocation. For example, you might create a tag named “project” for different resources used in a project, which is particularly helpful when viewing your AWS Cost & Usage report.
aws ec2 create-tags --resources i-1234567890abcdef0 --tags Key=project,Value=project1
The code above would tag an EC2 instance with the key-value pair “project: project1”.
Understanding AWS Multi-Account Billing
Multi-Account Billing is an AWS Organizations feature that consolidates payment for multiple AWS accounts within your organization through a single payment method. This practice has several advantages:
- Simplified Billing: Each of your AWS accounts receive their own bill, but all are paid through a single method, simplifying the payment process.
- Cost Visibility: You can track each account’s usage and costs, making it easier to understand your AWS costs.
- Volume Discounts: AWS services like S3 and EC2 come with volume discounts. By consolidating bills, all your AWS usage is considered, helping to attain these discounts.
Cost Explorer
Finally, we must mention Cost Explorer, a crucial AWS cost management service. Cost Explorer enables you to view and analyze your costs and usage. With it, you can identify areas that need cost reduction, examine cost trends, and make impactful cost-cutting decisions.
By utilizing Cost Explorer Data, you can better dissect your cost and usage data, visualize cost trends over time, and examine granular cost data to make informed decisions about your spending.
In conclusion, AWS Cost Allocation Tags, Multi-Account Billing, and Cost Explorer are indispensable tools for effective AWS Cost Management. Understanding these services is highly recommended for anyone aiming to pass the AWS Certified Solutions Architect – Associate (SAA-C03) certification exam and for comprehensive AWS cost optimization in practice.
Practice Test
The AWS Cost Explorer is a free tool that allows you to view and analyze your costs and usage. True/False?
• True
• False
Answer: True
Explanation: The AWS Cost Explorer is indeed a free service that helps visualize, understand, and manage your AWS costs and usage over a specified time period.
AWS Budgets provides the ability to set custom cost and usage budgets that alert you when your costs or usage exceed (or are forecasted to exceed) your budgeted amount. True/False?
• True
• False
Answer: True
Explanation: AWS Budgets indeed provides the ability to set custom cost and usage budgets that alert you when your costs or usage go over your budgeted amount or are forecasted to exceed it.
Which of the following are features of AWS Cost Management?
• a. Cost Explorer
• b. AWS Budgets
• c. AWS Cost and Usage Report
• d. All of the above
Answer: d. All of the above
Explanation: All these are key features of AWS Cost Management that help you to visualize, understand, manage your costs, and usage over time.
AWS does not provide cost allocation tags to organize and track your AWS costs. True/False?
• True
• False
Answer: False
Explanation: AWS actually provides cost allocation tags that allow you to organize and track your AWS costs.
When using AWS Consolidated Billing, all the accounts are independent and do not share resources. True/False?
• True
• False
Answer: False
Explanation: While each account in a consolidated billing family is independent, they can share resources such as EC2 instances, S3 buckets and so on.
The AWS Cost and Usage Report service is free of charge. True/False?
• True
• False
Answer: True
Explanation: AWS Cost and Usage Report service is free. You can use it to better understand your cost drivers and usage trends.
With AWS Multi-Account Billing, you can manage the cost of individual accounts separately. True/False?
• True
• False
Answer: True
Explanation: With AWS Multi-Account Billing, you can create, organize, and manage multiple accounts in an AWS environment and manage each account’s costs separately.
AWS Cost Explorer does not facilitate Reserved Instance (RI) reports. True/False?
• True
• False
Answer: False
Explanation: AWS Cost Explorer does support Reserved Instance (RI) reports, enabling you to optimize your costs around Reserved Instances.
AWS provides an “unblended rate” in the cost and usage report which combines usage for all accounts. True/False?
• True
• False
Answer: False
Explanation: The “unblended rate” is the price per unit of usage before it has been adjusted for Reserved Instances, Savings Plans, or consolidated billing.
AWS Budgets allows you to track usage, RI utilization, and RI coverage budgets. True/False?
• True
• False
Answer: True
Explanation: AWS Budgets lets you track your AWS usage and costs, including usage, RI utilization, and RI coverage budgets.
Using cost allocation tags and cost categories, you can map costs directly back to your organization’s cost centers. True/False?
• True
• False
Answer: True
Explanation: With cost allocation tags and cost categories, you can map your AWS costs input to your organization’s unique cost centers and workloads, for a more detailed breakdown and understanding of costs.
AWS Cost Explorer can only visualize data from the past 3 months. True/False?
• True
• False
Answer: False
Explanation: AWS Cost Explorer lets you dive deeper into your cost and usage data, for up to the last 12 months.
The AWS Cost and Usage Report contains the most comprehensive information available about your costs. True/False?
• True
• False
Answer: True
Explanation: Indeed, the AWS Cost and Usage Report contains the most detailed set of cost and usage data available, including metadata about AWS services, pricing, and reservations.
Interview Questions
What is the purpose of Cost Allocation Tags in AWS?
Cost Allocation Tags allows users to organize AWS resources and effectively track AWS costs and usage. By activating these tags, costs in your AWS cost allocation report are sorted by those tags.
Can you deactivate a cost allocation tag in AWS?
Yes, users can deactivate a cost allocation tag in AWS, but it will stop the new usage of the tag being reported in the AWS Cost and Usage report.
What does the AWS cost management service do?
AWS Cost Management service helps you to track, analyze, and optimize your AWS costs and usage. It includes tools and features, such as AWS Budgets, AWS Cost Explorer, and AWS Cost and Usage Report.
What is AWS Consolidated Billing?
Consolidated Billing is a feature of AWS Organizations that allows organizations to consolidate payment for multiple AWS accounts within a single organization. Each AWS account’s charges are bundled together but are also accessible separately for tracking purposes.
How does the AWS multi-account billing feature help in cost management?
AWS Multi-Account Billing allows organizations to create, manage, and consolidate multiple AWS accounts. It provides centralized control over costs, easy allocation of resources, and streamlined billing across different workloads and projects.
What is the benefit of the AWS Cost Explorer?
AWS Cost Explorer is an interface that enables users to visualize, understand, and manage their AWS costs and usages over time. It provides detailed and customizable reporting of AWS costs, allowing users to identify trends, pinpoint cost drivers, and detect anomalies.
What can be visualized using the AWS cost and usage report?
The AWS Cost and Usage report can visualize detailed information about your AWS costs, including costs per product or service, costs per account in your organization, and your Reserved Instance usage.
What is an AWS Savings Plan?
AWS Savings Plan is a cost-saving service that offers significant discounts up to 72% off on AWS compute usage in exchange for a commitment to a consistent amount of compute usage (measured in $/hour) for a 1 or 3-year term.
What is AWS Budgets and how it helps in cost management?
AWS Budgets allows you to set custom cost and usage budgets that alert you when your costs or usage exceed (or are forecasted to exceed) the budget amount. It helps administrators keep track and control AWS costs, preventing overspending.
How does AWS determine the costs for the cost allocation tags?
AWS determines costs for cost allocation tags based on the resources used and the tags applied to those resources. Each resource tagged will have its cost reported separately in the AWS Cost and Usage report according to the tags applied, helping to attribute costs more accurately.
What are user-defined cost allocation tags in AWS?
User-defined cost allocation tags in AWS are tags that users create and assign to their resources. These tags can then be used to categorize and track costs when used with the AWS Cost Explorer or the AWS Cost and Usage Report.
Can AWS Cost Explorer help the user to forecast the future AWS costs?
Yes, AWS Cost Explorer includes a forecasting feature that can predict your AWS costs up to three months in the future based on your historical cost data.
What is AWS Reserved Instance Coverage in context with AWS Cost Management?
AWS Reserved Instance Coverage is a component of AWS Cost Management that provides information about how much of your instance usage is covered by Reserved Instances. It helps to optimize costs by identifying opportunities to increase coverage.
Can cost allocation tags be applied retroactively?
No, cost allocation tags cannot be applied retroactively to past usage. They will only take effect for new usage once they have been activated.
What are AWS managed cost allocation tags?
AWS managed cost allocation tags are automatically applied tags that help users categorize and track their AWS costs. These tags start with “aws:” and are ready for use in AWS Cost and Usage Report and AWS Cost Explorer.
extutorials.com