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Laying the Foundation: Setting Up Your Environment for Cost Optimization
AWS Whitepaper

Use Tagging to Organize Your Environment and Drive Accountability

Tagging your AWS resources lets you assign custom metadata to instances, images, and other resources. For example, you can categorize resources by owner, purpose, or environment, which helps you organize them and assign cost accountability.

Define Mandatory Cost Tagging

An effective tagging strategy will give you improved visibility and monitoring, help you create accurate chargeback/showback models, and get more granular and precise insights into usage and spend by applications and teams. The following tag categories can help you achieve these goals:

  • Environment – Distinguishes between development, test, and production infrastructure. Specifying an environment tag reduces analysis time, post-processing, and the need to maintain a separate mapping file of production versus non-production accounts.

  • Application ID – Identifies resources that are related to a specific application for easy tracking of spend change and turn-off at the end of projects.

  • Automation Opt-In/Opt-Out – Indicates whether a resource should be included in an automated activity such as starting, stopping, or resizing instances.

  • Cost Center/Business Unit – Identifies the cost center or business unit associated with a resource, typically for cost allocation and tracking.

  • Owner – Used to identify who is responsible for the resource. This is typically the technical owner. If needed, you can add a separate business owner tag. You can specify the owner as an email address. Using an email address supports automated notifications to both the technical and business owners as required (e.g., if the resource is a candidate for elasticity or right sizing).

Enforce Quality of Tagging

Without enforcement, tagging quality will be low, and reporting will be manual, time-consuming, and subject to debate. There are two general types of tagging enforcement: soft and hard. Soft enforcement notifies users when they have not followed policies. Hard enforcement terminates resources that are not tagged to the company standard (usually within hours after they’re launched). Mature organizations find hard enforcement of tagging to be the best way to ensure that quality tagging is maintained.

Tagging Tools

The following tools can help you manage your tags:

  • AWS Tag Editor – Finds resources with search criteria (including missing and misspelled tags) and allows you to edit tags via the AWS Management Console

  • AWS Config – Identifies resources that do not comply to tagging policies

  • Capital One’s Cloud Custodian (open source) – Ensures tagging compliance and remediation