Factoring one-time fees into your AWS cost monitoring
Unexpected spikes in your AWS costs can be bewildering at best, and devastating at worst. But not all cost spikes should be feared.
When your company buys Reserved Instances, the one-time purchasing fee can cause a unique brand of cost spike: an intentional and temporary bump in costs in exchange for reduced rates down the line. This means that when you see that your AWS spending has suddenly skyrocketed, you may not have cause for alarm; some of it might actually be accounted for by a recent Reserved Instance purchase. However, some or all might not. The key to reacting to spikes appropriately, and to ensuring that you can minimize accidental usage spikes without unnecessary stress, is in knowing how to tell the difference.
Watch our free webinar: Mastering the Fundamentals of AWS Cost Management to learn more about controlling your AWS costs
Decode the spikes
You can become alerted to spikes in your AWS spending from a variety of sources: from your Cloudability Daily Summary Email, from a Dashboard Widget of daily spending, or even from your bill at the end of the month (though we hope you don’t have to find out that way).
Regardless of how you catch a spike, your first step is not to panic. You can quickly determine what sort of spike you’re dealing with by applying the Transaction Type dimension to a Cloudability spending report or spending widget. This dimension will break down your spending within the selected reporting period into five categories: usage charges, recurring charges, one time charges, credits, and taxes. What you want to determine is how much of the cost spike falls under the “one time charge” label, and how much falls under “usage.”
In the widget above, you can see that almost half of the costs for the reporting period are attributed to one-time charges. So if the “cost spike” was simply a doubling of your normal spending, you can breathe easy—your actual usage charges haven’t increased, and your spending will very likely fall back to normal in future reporting periods. In fact, if the Reserved Instances purchased during the period are applied as planned, your spending will likely sink even lower than it was prior to this reporting period. Aren’t you glad now that you didn’t panic?
However… if you experience a cost spike and find that very little if any of it is accounted for by one-time charges, then something substantially fishier might be going on. In that case, you’ll want to look into optimizing your usage to ensure there isn’t any wasteful or unchecked spending being accrued.
Filter out spikes you shouldn’t worry about
If you’re not in Finance or Exec, one-time Reserved Instance charges likely aren’t relevant to what you’re doing. As such, you can choose to filter these spending types out of your Daily Summary Emails and out of any widgets or reports that you use. You can do so using the “Transaction Type = Usage” filter to see exclusively variable usage-based spending, or using the “Transaction Type =/= One time” filter, so that you can still see taxes, credits, and other aspects of your spending which you can actively impact.
With these filters in effect, you can eliminate confusion around cost spikes—if you see one, it’s not a result of a Reserved Instance purchase.
Even out the bumps
Ideally, Reserved Instance purchases shouldn’t cause spikes in your spending at all—but achieving such a reality requires a sophisticated purchasing strategy.
Most AWS users make Reserved Instance purchases on a yearly or quarterly schedule, and will therefore encounter one-time-fee-driven cost spikes on a yearly or quarterly basis. However, as we’ve explored in other blog posts, the most effective Reserved Instance portfolios are those which are updated every single month in order to accommodate ever-changing needs. If you can achieve a monthly cadence of Reserved Instance purchases, you’ll be accruing some amount of one-time charges within nearly every reporting period, effectively evening out the spikes across each month.
At that point, Reserved Instance purchasing fees won’t cause “cost spikes” at all—and any cost spikes you detect can be clearly interpreted.
Whether you’re regularly sorting out spikes or simply keeping an eye out to make sure they don’t occur, Cloudability can help you do so. Simply log in or sign up for a free 14-day trial of Cloudability to start monitoring your AWS spending today.