Navigating Cloud Costs: The Power of AWS Budget Service

In today’s digital age, businesses are increasingly migrating their operations to the cloud to leverage its scalability, flexibility and efficiency. However, with the benefits of cloud computing come the challenges of managing costs effectively. Enter AWS Budget Service — a game-changi

AWS Budget:

The AWS Budget is a financial managing tool primarily employed for cost planning and forecasting within the AWS Consulting platform. It is free to use and helps you to manage and predict the AWS expenses over the period.

We can use the AWS budgets for tracking and taking the necessary actions to control costs and usage. Furthermore, it can be employed for the aggregation of utilization and coverage metrics for savings plans or reserved instances.

You can create the budgets in terms of annual, quarter, monthly or even daily as per your needs. It can make you take effective budget actions on time to reduce unnecessary costs or usage.

Architecture of Budget

Problem Statement

Navigating the complex landscape of cloud costs presents a formidable challenge for organizations of all sizes. Without adequate visibility and control over their spending, businesses are susceptible to a myriad of financial risks and operational inefficiencies, including:

• Budget Overruns: Unpredictable costs and lack of budget controls often lead to exceeding allocated budgets.
• Lack of Visibility: Limited visibility into spending patterns impedes effective decision-making and optimisation efforts.
• Resource Overutilization: Excessive resource allocation leads to inefficient usage, wasted resources and increased costs.

How AWS Budget Service help manage Cloud Budgets?

AWS Budget Service provides a comprehensive set of features to address these challenges and empower businesses to manage their cloud budgets effectively:

• Custom Budgets: Set tailored spending limits based on various parameters such as total cost, usage or reservations.
• Alert Mechanisms: Receive timely alerts via email or SNS when actual spending exceeds predefined thresholds, enabling proactive cost management.
• Cost Allocation Tags: Categorize costs to specific projects or departments for enhanced transparency and accountability.
• Forecasting Capabilities: Predict future spending trends based on historical data and usage patterns, facilitating proactive planning and budget allocation.

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How Budget Works?

With AWS Budgets, set custom budgets to track your costs usage and respond quickly to alerts received from email or SNS notifications if you exceed your threshold.

Types of Budget in AWS

• Cost budgets — Plan how much you want to spend on a service.
• Usage budgets — Plan how much you want to use one or more services.
• RI utilization budgets — Define a utilization threshold and receive alerts when your RI usage falls below that threshold. This lets you see if your RIs are unused or under-utilized.
• Savings Plans utilization budgets — Define a utilization threshold and receive alerts when the usage of your Savings Plans falls below that threshold. This lets you see if your Savings Plans are unused or under-utilized.

In a multi-account AWS environment, depending on your organization’s governance structure, there are two patterns for managing the budget:

• Centralized budget management → The budget is set by the management account for all its member AWS accounts.
• Decentralized budget management → The budget is set for individual AWS member accounts by its owners.

Deployment:

1. Sign in to the AWS Management Console and open the AWS Cost Management console at https://console.aws.amazon.com/cost-management/home.
2. In the navigation pane, choose Budgets.
3. You’ll see two different budget options namely “Use a template” and “Customize (Advanced)”.
4. Budget templates are a simplified way to start using AWS Budgets, with a single page workflow, unlike the 5-step workflow that is required for Customizing a budget (advanced).
5. The Cost Budget type, it’s like the monthly whole account cost budget, which will notify us if/when the actual costs of whole account services exceed the specified budgeted amount.

Enter the following details:

• Budget Name: Whole-account-budget
• Period: Monthly
• Budget effective date: Recurring budget
• Start month: (current month)
• Choose how to budget: Fixed (NOTE: There are different ways to budget like planning where you know how much you going to spend (Approx) or Auto-adjusting which will analyze your spending pattern and adjust it dynamically)
• Enter your budgeted amount ($): 100.00 (Based on the last month’s cost you can add it)
• Choose Budget Scope: All AWS services (Recommended), currently we areapplying the budget alerting on our whole account which covers all the AWS services.

Select the Next button:

To create an alert for our new whole account cost usage budget, select Add an alert threshold:

You can add multiple alert thresholds based on actual as well as forecasted usage of the budgeted amount as shown in the screenshot below:

[1] Actual Budget

• Notification preferences: Input email addresses in the Email recipients field who should receive the email alert.

[2] Forecasted budget

• As a best practice, add an alert threshold when your actual budget goes about 50%, 60% and 70%.
• Click Next and here you can attach actions that can be taken when your budget exceeds its threshold. We will not be attaching any actions for this lab. Select Next to move to the next page:
• Review the configuration and click Create a budget:
• The budget is created for your AWS account:
• So, if the budgeted amount exceeds the threshold, you will receive an email within a few seconds as shown below:
• Hope you have understood AWS Budgets and how to leverage them when planning cloud financial management.

You can check more info about: Cloud Costs: The Power of AWS Budget Service , 

• Iaas/Paas Migration, 
• Security Consulting, 
• Hybrid Cloud Implementation .