Other Cost-Related Metrics - Cost Management in the AWS Cloud

Other Cost-Related Metrics

Creating cost-related metrics and then tracking them supports a data-driven decision-making culture. This makes it easy to understand and manage your costs and identify opportunities for savings. Some examples of cost-related metrics that you can implement include percentage of:

  • Resource utilization

  • Instances turned off daily

  • Instances tagged

  • Amazon EC2 instances that have undergone EC2 Right Sizing

Organizations taking advantage of AWS cost optimization offerings such as Reserved Instances and Spot Instances should develop metrics around them, such as percentage of:

  • Reserved Instance coverage of key workloads

  • Aggregate utilization of EC2 Reserved Instances

  • Application of EC2 Spot Instances and any associated discounts

As organizational needs evolve, cost management requirements tend to evolve as well toward quantifying savings. Savings can be realized as a result of cost optimization efforts:

  • Workload management – Gain elasticity by turning off development, test, and staging workloads when not in use. A common approach is to mandate on/off for all such instances except those flagged manually as exceptions:

    On/off savings = (highest hourly cost x hours per month) − actual monthly cost

  • Reserved Instance utilization – Maximize Reserved Instance utilization using the EC2 Reserved Instance Reports in AWS Cost Explorer. A typical utilization target is 70% of always-on workloads.

  • Reserved Instance Right Sizing – Apply a benchmark to a point in time and measure savings potential by right sizing your EC2 instances. Over time, you can measure savings achieved through right sizing and compare that to your initial benchmark.

These are a few examples of possible metrics that you can implement in your cost optimization journey. You can further refine your metrics to track unit costs along the following dimensions:

  • Number of customers or active subscribers

  • Revenue generated

  • Product or business unit

  • Internal user

  • Experiment

By using the cost metrics outlined above, you can link your cloud computing costs and usage to your business objectives.