Assessment

Types of costs

• Compute
  • Costs associated with running virtual machines, containers, or serverless functions. This includes costs for instances, auto-scaling, and load balancing.
• Storage
  • Storing data on the cloud, including costs for object storage, block storage, and file storage.
• Data transfer
  • These are costs associated with transferring data in and out of the cloud, including costs for data transfer between services, regions, and Internet gateways.
• Database
  • Costs associated with running databases on the cloud, including costs for relational, NoSQL, and in-memory databases.
• Network
  • Networking on the cloud, including costs for virtual private clouds (VPCs), load balancers, and direct connect.
• Security
  • Costs associated with securing the cloud infrastructure, including costs for identity and access management (IAM), security groups, and security audit.
• Monitoring
  • These are costs associated with monitoring and logging cloud infrastructure, including costs for CloudWatch, CloudTrail, and CloudFormation.
• Backup and recovery
  • Backing up and recovering data on the cloud, including costs for snapshots, backup storage, and disaster recovery.
• Developer and IT
  • These are costs associated with developing, deploying, and managing applications on the cloud, including costs for developer tools, IT operations, and DevOps.
• **Licensing costs**
  • These are costs associated with running software on the cloud, including costs for operating systems, middleware, and application software.

AWS Cost Tools

These calculators can give you a rough estimate of the cost,

• AWS Simple Monthly Calculator
  • Allows you to estimate the costs of AWS services based on usage, including compute, storage, and data transfer.
• AWS Pricing Calculator (many AWS services)
  • Allows you to estimate the cost of running different AWS services based on usage, including EC2 instances, RDS databases, and S3 storage.
• AWS Cost Explorer
  • tool that allows you to view, analyze, and manage your AWS costs and usage over time.
• AWS Budgets
  • Allows you to set custom budgets for your AWS costs and receive alerts when you are approaching or exceeding your budgeted amount.
• AWS TCO Calculator
  • Helps you compare the costs of running your workloads on-premises versus in the AWS cloud.
• AWS Savings Plan Calculator
  • Helps you compare the costs of using Savings Plans versus On-Demand pricing for EC2 and Fargate.
• AWS Total Cost of Ownership (TCO) Calculator for Windows Server
  • Helps you estimate the costs of running Windows Server on AWS compared to on-premises.
• AWS Data Transfer Calculator
  • Helps you estimate the cost of data transfer between AWS services and regions.
• AWS Cost and Usage Report (CUR) Calculator
  • Helps you estimate the cost of using the AWS Cost and Usage Report service.
• AWS Compute Optimizer
  • A service that analyzes your resource usage and recommends cost-effective AWS resources for your workloads.

AWS Pricing calculator tool includes a number of individual AWS services, for example:

• AWS Elastic Beanstalk Cost Calculator: Allows you to estimate the costs of running your application on AWS Elastic Beanstalk, including compute, storage, and data transfer costs.
• AWS App Runner Cost Calculator: Helps you estimate the costs of using AWS App Runner to build, test, and deploy containerized applications.
• AWS CloudFormation Cost Estimator: Allows you to estimate the costs of using AWS CloudFormation to provision and manage your infrastructure.
• AWS CloudFront Cost Calculator: Helps you estimate the costs of using AWS CloudFront for content delivery.
• AWS CodeBuild Cost Calculator: Allows you to estimate the costs of using AWS CodeBuild to build, test, and deploy your applications.

Azure Cost Tools

1. Microsoft Azure Total Cost of Ownership (TCO) Calculator to reflect all costs.
2. Azure Pricing Calculator: Allows users to estimate the cost of using various Azure products and services.
3. Azure Cost Management: A set of tools and services that help users optimize their spending on Azure.
4. Azure Billing Reports: Provides detailed information about a user's past and current Azure charges.
5. Azure Cost Analysis: A tool that allows users to analyze and visualize their Azure spending.
6. Azure Reservations: Allows users to purchase reserved instances for specific products and services.
7. Azure Hybrid Benefit: Allows users to apply existing on-premises Windows Server and SQL Server licenses to reduce the cost of running those workloads on Azure.
8. Azure Dev/Test Pricing: Special pricing options available for Azure resources used for development and testing.
9. Azure CSP (Cloud Solution Provider) Pricing: Special pricing options available for Azure partners and resellers.
10. Azure Spot VMs: A lower-cost option for running non-critical workloads that can be terminated if the resources are needed for higher-priority workloads.
11. Azure Credit: Allows users to apply credits to their Azure account to reduce the cost of usage.

GCP Price Tools

1. Google Cloud Pricing Calculator: Allows users to estimate the cost of using various Google Cloud products and services.
2. Google Cloud Cost Management: A set of tools and services that help users optimize their spending on Google Cloud.
3. Google Cloud Billing Reports: Provides detailed information about a user's past and current Google Cloud charges.
4. Google Cloud Cost Explorer: A tool that allows users to analyze and visualize their Google Cloud spending.
5. Google Cloud Reservations: Allows users to purchase committed use discounts for specific products and services.
6. Google Cloud Committed Use Discounts: Discounts that are applied automatically when a user commits to using a specific amount of a product or service for a period of time.
7. Google Cloud Sustained Use Discounts: Discounts that are applied automatically when a user consistently uses a certain amount of a product or service.
8. Google Cloud Custom Machine Types: Allows users to create custom virtual machine configurations to optimize performance and cost.
9. Google Cloud Preemptible VMs: A lower-cost option for running non-critical workloads that can be terminated if the resources are needed for higher-priority workloads.
10. Google Cloud Custom Pricing for Partners: Special pricing options available for Google Cloud partners and resellers.

Amazon EC2 cost breakdown by type of cost

• Utilization

• Instance

• Storage

• Data backup

• Data transfer

• Instance scale (# of instances)

• Load Balancing

• Hourly instance pattern = (hits per hour on website) / (number of instances)

  • Amazon EC2 instances that run each hour then take the average.
  • number of hits per day and
  • average number of instances for your calculations.

• Daily profile = SUM(Hourly instance pattern) / 24 https://docs.aws.amazon.com/whitepapers/latest/how-aws-pricing-works/amazon-ec2-cost-breakdown.html

AWS Well Architected Cost Optimization strategies

AWS cost and budgeting best practices (source: official AWS docs):

Practice Cloud Financial Management

• Establish a cost optimization function
• Establish a partnership between finance and technology
• Use cloud workload budgets and forecasts
• Cost awareness in your organizational processes
• Report and notify on cost optimization
• Monitor cost proactively
• Keep up-to-date with new service releases
• Create a cost-aware culture
• Quantify business value from cost optimization

Awareness of usage and spending

• Governance
  • Develop policies based on your organization requirements
    • Meet with team members
    • Define workloads, services, resources
    • Define users by function
    • Define actions by users/resources
    • Document policies
  • Implement goals and targets
    • Expected Usage levels
    • Defined costs, golas and targets
  • Implement an account structure
  • Implement groups and roles
  • Implement cost controls
  • Track project lifecycle
• Monitor
  • Configure detailed information sources
    • create a AWS Cost and Usage Report (CUR)
    • configure hourly granularity in Cost Explorer
    • AWS Glue, Athena and Quicksight may help
  • Identify cost attribution categories
    • Org categories
    • Functional categories
  • Establish organization metrics
  • Configure billing and cost management tools
    • Create a Cost Optimization group
    • Configure AWS Budget
    • Configure AWS Cost Explorer
    • AWS Cost Explorer, AWS Budgets, and Amazon Athena with Amazon QuickSight
  • Add organization info to cost and usage
    • Define a tagging scheme
    • Tag resources and Cost Categories
    • Automate tagging
    • Monitor
  • Allocate costs based on workload metrics
• Decommission Resources
  • Track resources over their lifetime
    • Tagging and output monitoring
  • Implement a decommissioning process
  • Decommission resources
  • Decommission resources automatically
    • Auto Scaling, Cloudwatch termination, other workload code

Cost Effective Resources

• Evaluate cost when selecting services
  • Identify organization requirements for cost
    • AWS Total Cost of Ownership (TCO) Calculator
  • Analyze all components of the workload
    • List the workload components
    • Prioritize component list
    • Perform the analysis
    • AWS Cost Explorer and the AWS Cost and Usage Report, AWS Pricing Calculator
  • Perform a thorough analysis of each component
  • Select software with cost-effective licensing, analyze otpions
  • Select components of this workload to optimize cost in line with organization priorities
  • Perform cost analysis for different usage over time
    • Define predicted usage pattern
    • Perform cost analysis at predicted usage
    • AWS Total Cost of Ownership (TCO) Calculator
  • Select the correct resource type, size, and number
    • Perform cost modeling
    • Select resource type, size, and number based on data
    • Select resource type, size, and number automatically based on metrics
  • Select the best pricing model
    • Perform pricing model analysis
    • Implement Regions based on cost
    • Select third-party agreements with cost-efficient terms
    • Implement pricing models for all components of this workload
    • Perform pricing model analysis at the master account level
  • Plan for data transfer
    • Perform data transfer modeling
    • Select components to optimize data transfer cost
    • Implement services to reduce data transfer costs

Manage demand and supply resources

• Perform an analysis on the workload demand
• Implement a buffer or throttle to manage demand
• Supply resources dynamically

Optimize over time

• Develop a workload review process
• Review and analyze this workload regularly

source: AWS Well-Architected: Cost