AWS Cost Management Tools are essential for monitoring, controlling, and optimizing costs in your AWS environment. They are crucial for business financial transparency, decision-making, and operational efficiency. Here, we are focusing on three major AWS cost management services, the AWS Cost Explorer, AWS Budgets, and the AWS Cost and Usage Report (CUR), which are key aspects of the exam “AWS Certified Solutions Architect – Associate (SAA-C03)”.
AWS Cost Explorer
AWS Cost Explorer is an interface that provides detailed, visual representations of your AWS cost data. It enables users to understand, manage, and optimize costs. It helps in tracking patterns, and understanding usage over time.
Use Case:
Imagine an organization wants to track their spending patterns over several months. The Cost Explorer could illustrate a visual trend line of costs incurred each day or month, offering insights into what their largest costs are, and how they are accrued over time. This data can reveal if certain services or regions are more costly, thus aiding strategic decision-making. The capability to drill down specific cost elements makes it a flexible tool for cost management and optimization.
AWS Budgets
AWS Budgets give the ability to set custom cost or usage budget warning thresholds that align with your company’s operation and finance procedures. You receive alerts when your usage or costs exceed (or are forecasted to exceed) your defined budget thresholds.
Use Case:
Suppose a start-up company is running an e-commerce application on AWS and wants to limit their monthly AWS expenses. They could create a budget in AWS Budgets and configure alert thresholds to notify stakeholders when the spending or usage nears or exceeds their budgeted amount. This ensures transparency and control over costs.
AWS Cost and Usage Report(CUR)
The AWS Cost and Usage Report (CUR) contains the most detailed set of AWS cost and usage data available. It includes additional metadata about AWS services, pricing, Reserved Instances, and other AWS products. The CUR provides comprehensive data about costs with various granularities, like hourly and daily, and can be queried and visualized using data analysis tools.
Use Case:
Consider an enterprise with a variety of AWS services who wants to drill down its costs in greater detail. They could use the CUR to gain insights for specific account activity, service usage, and associated costs. The report can track and compare costs for specific services over time. This aids in identifying usage patterns and optimizing costs.
AWS Cost Explorer vs AWS Budgets vs AWS Cost and Usage Report
| AWS Cost Management Tool | Primary Function | Use Case |
|---|---|---|
| AWS Cost Explorer | Analyses past, present and future AWS spending | A company wants to estimate their future AWS Expenses based on the past trends |
| AWS Budgets | Sets usage or cost alarms based on custom budget thresholds | A start-up company seeks to limit their monthly AWS expenses |
| AWS Cost and Usage Report | Provides comprehensive cost reports, with granularities like hourly and daily | An enterprise wants to analyse cost data in greater detail for cost optimization |
While these three services provide different scopes and functionalities, they are interlinked and complementary. The combination of all three services offers the most effective way to monitor, manage, and optimize AWS costs for your organization.
So, if you are preparing for the “AWS Certified Solutions Architect – Associate (SAA-C03)” exam, understanding these AWS Cost Management tools and their respective use cases will be crucial in mastering the financial management domain of the exam.
Practice Test
True or False: AWS Cost Explorer helps you to understand and control your costs.
- True
Answer: True
Explanation: AWS Cost Explorer enables you to visualize, understand, and manage your AWS costs and usage over time.
AWS Budgets helps you to set cost and usage budgets and send notifications when your usage exceeds your budget. Is this statement is true or false?
- True
Answer: True
Explanation: 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) your budgeted amount.
Which tool allows you to download cost and usage data to a comma-separated value (CSV) file?
- A. Cost Explorer
- B. AWS Budgets
- C. AWS Cost and Usage Report
- D. QuickSight
Answer: C. AWS Cost and Usage Report
Explanation: The AWS Cost & Usage Report contains the most detailed set of AWS cost and usage data available, including additional metadata about AWS services, pricing, and reservations (e.g., Amazon EC2 Reserved Instances (RIs)).
What role does Amazon QuickSight play in AWS cost management?
- A. It helps in setting cost and usage budgets.
- B. It is a business analytics service used to visualize Cost and Usage Report data.
- C. It provides detailed cost reports.
Answer: B. It is a business analytics service used to visualize Cost and Usage Report data.
Explanation: Amazon QuickSight can be used to create interactive dashboards from your AWS Cost and Usage Reports, allowing for more sophisticated analysis and reporting.
Can you identify your highest costs using AWS Cost Explorer?
- True
Answer: True
Explanation: AWS Cost Explorer includes a default report that helps you visualize the costs associated with your highest spending AWS services, and to see a breakdown of those costs by linked account.
Choose the AWS tool that does not directly concern cost management:
- A. Cost Explorer
- B. AWS Budgets
- C. AWS Cost and Usage Report
- D. AWS Lambda
Answer: D. AWS Lambda
Explanation: While AWS Lambda can indirectly help reduce costs by streamlining services, it is not a direct tool for cost management like the others.
True or False: AWS Cost and Usage Report can be used to generate a report that shows the hourly, daily, or monthly granular line items for each unique cost allocation tag.
- True
Answer: True
Explanation: With AWS Cost and Usage Report, you can generate cost and usage reports that show the hourly, daily, or monthly granular line items for each unique cost allocation tag to analyze your cost usage.
Can AWS Budgets be used to set cost and usage alerts?
- True
Answer: True
Explanation: AWS Budgets allows you to set custom cost and usage budgets to track your cost and usage patterns. When your cost or usage exceeds (or is forecasted to exceed) your budget, AWS Budgets can send you email notifications.
Can AWS Cost Explorer be used to generate an estimated monthly bill?
- True
Answer: True
Explanation: AWS Cost Explorer includes a default report that provides a high-level summary of your month-to-date AWS costs, and projects your end-of-month spending.
Can user get notified if actual and forecasted costs exceed their budget amount in AWS?
- True
Answer: True
Explanation: With AWS Budgets, user can set custom budgets that alert them by sending notifications when their costs or usage are over their budgeted amount.
True or False: AWS Trusted Advisor does not provide recommendations to reduce costs.
- False
Answer: False
Explanation: AWS Trusted Advisor provides suggestions for reducing costs by analyzing AWS usage and identifying areas where resources can be optimized or removed, saving on costs.
Can user control data at resource level with AWS Cost Explorer?
- True
Answer: True
Explanation: AWS Cost Explorer has a user-friendly interface that lets you visualize, understand, and manage your AWS costs and usage over time. This makes it easy to identify trends, pinpoint cost drivers, and detect anomalies.
AWS Cost and Usage Report provides information that is updated daily. Do you agree with this statement?
- True
Answer: True
Explanation: AWS Cost and Usage Reports consolidate your usage and cost data, updates it once a day and stores it in a S3 bucket for analysis and visualization.
Which AWS tool can be used to forecast future costs?
- A. Cost Explorer
- B. AWS Budgets
- C. Both A and B
- D. None of these
Answer: C. Both A and B
Explanation: Both AWS Cost Explorer and AWS Budgets can be used to forecast future costs based on historical trends.
Does AWS Budgets only provide spend data linked to AWS services?
- False
Answer: False
Explanation: AWS Budgets provides a set of cost management features that allow you to track AWS usage and spend data across all linked accounts, not just AWS services.
Interview Questions
What is AWS Cost Explorer and how can it be used to manage costs?
AWS Cost Explorer is a user interface that allows you to visualize, understand, and manage your AWS costs and usage over time. It offers tools to help you view past costs, forecast your future costs, identify patterns of wasteful spending, and make decisions to control your costs.
Can AWS Budgets help in managing costs? How?
Yes, AWS Budgets can help in managing costs by enabling you to set custom cost and usage budgets that alert you when your costs or usage exceed the budgets you’ve set. AWS Budgets tracks spend across all AWS services and accounts.
What is AWS Cost and Usage Report (CUR) and what does it provide?
The AWS Cost and Usage Report (CUR) provides comprehensive data about your costs. The report includes additional metadata about AWS services, pricing, and Reserved Instances, which can make it easier to map usage to specific projects, departments, or cost centers.
How can Reserved Instances be used as a cost-saving measure in AWS?
AWS Reserved Instances (RIs) allow you to reserve capacity for specific products. In return for this commitment, you receive a significant discount compared with on-demand pricing.
If you need to analyze the cost performance of your resources over time, which tool would you use?
You would use AWS Cost Explorer. It allows you to track costs over any period of time and identify trends to better project future costs.
If you want to receive alerts when your AWS spending is going higher than expected, which cost management tool should be your choice?
AWS Budgets would be the best choice. It allows you to set custom cost and usage budgets and alerts you when your costs or usage exceed what you budgeted.
What use cases does AWS Cost and Usage Report support?
AWS CUR supports use cases like understanding spend trends, allocating costs to business units, and managing reserved instance usage.
How can you break down AWS costs in detail?
Using AWS Cost Explorer, you can break down the costs by different dimensions, such as AWS service, linked account, tag, and more.
What is the primary difference between AWS Cost Explorer and AWS Budgets?
AWS Cost Explorer is a tool for visualizing, understanding, and managing your AWS costs and usage over time, while AWS Budgets allows you to set custom budget thresholds and will alert you if those are exceeded.
How can you predict AWS expense in advance?
You can use AWS Cost Explorer’s forecasting feature to predict your AWS costs. This feature uses machine learning algorithms to predict future expenses based on historical data.
What are AWS Saved Reports in Cost Explorer?
Saved Reports in AWS Cost Explorer allow you to save a snapshot of your cost data. This includes all of your filters, grouping, and chart preferences so that you can quickly access them again in the future.
How does AWS Budgets help manage costs in multi-account environments?
AWS Budgets can track spend across all linked AWS accounts and ensure that the spends don’t exceed the specified limits. In the case of multi-account environments, AWS Budgets prove to be an effective governance tool.
Can AWS Cost and Usage Report be integrated with external reporting systems?
Yes, AWS Cost and Usage Report can be exported in CSV format, which is easy to import into many external reporting systems.
What is the importance of cost allocation tags in AWS cost management?
Cost allocation tags help assign costs to different teams, projects, or cost centers. This way, organizations can track their AWS costs and usage more granularly and make more informed cost control decisions.
How can Savings Plans be used to manage costs?
AWS Savings Plans offer significant savings on AWS compute usage, similar to Reserved Instances, but with greater flexibility as to instance families, sizes, regions, operating systems or tenancies over a chosen term.
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