Understanding AWS Cost Metrics: Do You Have a True Cost Metric?
AWS has always provided us with a number of different cost metrics, starting with the DBR (Detailed Billing Report) on up through the CUR (Cost and Usage Report). With each item having the full range of cost metrics, we, as the end user, could pick whichever one worked best for us and that item. It sounds great, in theory, but in practice it’s a classic example of getting more data than you need. When faced with a wall of metrics, most people ended up using “unblended cost” for the majority of use cases. But the unblended cost doesn’t paint the whole picture. If you’re trying to figure out how you’re actually using your cloud spend, then you need a metric that ties your cost to your use. And that’s where additional metrics come in.
Recently, AWS gave us even more specific costs metrics in the newer CUR file. We’re leveraging the extra detail from them to give you more flexibility and more granular reporting. As always, our goal is help you uncover the True Cost of running your cloud and help you meaningfully share it across your organization. To help make that easier, we’ve written this post so you can understand your options. We’re diving into each metric, reviewing the cost items it represents, and helping you figure out whether it’s the right one for your True Cost story.
Note: Unless otherwise stated each metric below is described in the context of CUR.
Metric – Cost (Blended)
Blended cost has often felt like a bit of an enigma, at times seeming to make sense and other times being utterly confusing. In DBR, it was handy for tracking used vs. unused reserved EC2 hours with the injected line item. With the move to CUR, this benefit no longer exists and we have yet to see a really good use for the metric. It’ll still be around, at least for the moment, but we’d highly recommend using a different cost metric moving forward.
The bottom line:
An eccentric metric that it’s probably best to walk away from.
Metric – Cost (Total)
This is the default cost metric in Cloudability and is an alias for unblended cost. For non-RI cost items, this metric represents the whole cost incurred at the public list price (no custom pricing applied). When viewing the sign-up charges (upfront component) of reserved instances this metric tells you exactly what you paid. For instance hours covered by a reservation, this metric represents the monthly component of the RI being used up — and nothing else. So for All Upfront RI purchases, this will be $0, since the entire charge is at sign-up. This means that using this metric will only give you a partial allocation of costs if you have partial or All Upfront RIs in play.
As a note, AWS can retroactively add credits into the billing data which will impact this metric. However, those credits aren’t allocated at the point of use in terms of tags, accounts or resource IDs. You can use the Cloudability dimension ‘Transaction Type’ to filter in or out credits, if applicable.
The bottom line:
Your ultimate cash accounting metric — straight-forward and unadulterated.
Metric – Cost (Adjusted)
This is basically the same Cost (Total), but with an extra step: custom pricing has been applied. Any special pricing rules you have are applied to each line item on ingestion from the cloud vendor. The net cost is then provided with this metric. If you have a custom pricing agreement with your cloud vendor, this metric effectively represents what you pay them each month.
The bottom line:
Your ultimate cash accounting metric with special pricing mixed in.
Metric – Cost (Amortized)
For non-RI items, this metric is like Cost (Total), and shows the whole cost at the public list price. The big difference comes with how RIs are handled. Because this metric amortizes costs, the sign-up charges for RIs will show up as zero. It might seem strange, but that’s the whole point of this metric. The goal is to allocate all costs where and when they’re consumed instead of when you paid for them. So if you report on a single instance hour covered by an RI using this metric, you’ll see both the associated upfront costs and the monthly costs. We achieve this by directly attributing the costs from the specific applied RI.
This metric supports a full allocation of costs. If you have no custom pricing at play, then this should be your True Cost metric.
The bottom line:
Your core accrual accounting metric that allocates for RIs.
Metric – Cost (Adjusted Amortized)
Perhaps the ultimate True Cost metric, Cost (Adjusted Amortized) brings it all together. It starts with the same consumption-based costs as Cost (Amortized), and then goes the extra mile by applying any special or custom pricing rules.
The bottom line:
Your True Cost metric, rolling your costs, RI consumption and pricing agreements all together into one metric.
Handy RI Cost Metrics Table
For a quick comparison, you might find the following table useful for understanding how the metrics play with Reserved Instances.
|Cost(Total)||Cost(Adjusted)||Cost (Amortized)||Cost (Adjusted Amortized)|
|No Upfront RIs|
|Sign Up Charge||NA||NA||NA||NA|
|Instance Hour||Monthly component consumed||Monthly component consumed, pricing rules applied||Monthly component consumed||Monthly component consumed, pricing rules applied|
|Partial Upfront RIs|
|Sign Up Charge||Upfront Payment||Upfront Payment, pricing rules applied||Always $0||Always $0|
|Instance Hour||Monthly component consumed||Monthly component consumed, pricing rules applied||Monthly and Upfront components consumed||Monthly and Upfront components consumed, pricing rules applied|
|All Upfront RIs|
|Sign Up Charge||Upfront payment||Upfront payment, pricing rules applied||Always $0||Always $0|
|Instance Hour||Always $0||Always $0||Upfront component consumed||Upfront component consumed, pricing rules applied|
Choosing the Right Cost Management Tool
Hopefully, this post has helped you understand the cost metrics available to you, and how you can make the most use out of them. Once you’ve chosen the best metric(s) for your company, it’s easy to select that metric within Cloudability and use it throughout the platform, including in Budgets and Forecasting.
If you don’t have Cloudability and aren’t sure which cloud cost management platform is right for you, then here are some key questions you should ask yourself:
- Does the tool deliver a True Cost metric that delivers full and accurate allocation?
- Can this metric be used throughout the application and charted in its own right?
- Does it fully allocate RI costs at point of usage in a manner that makes sense?
- Is RI allocation covered for all AWS services, such as Redshift and Elasticache?
- If needed, can you interrogate the allocation of RIs to make sure it’s working as you expect? (Cloudability provides a ‘Reservation ID’ dimension just for this purpose.)
- Can RI costs be allocated all the way down to the resource level for a True Cost rollup?
Ready to see what Cloudability’s metrics can show you about your AWS spend? Sign up for a free trial today!
Oh, and Two More Things…
To provide further utility with your cost analytics work, we’ve provided two special measures you can use throughout reporting. The Cost Adjustment metric identifies the adjustment made with custom pricing rules and is the difference between Cost(Total) and Cost(Adjusted). We also have an additional dimension called Cost Adjustment Description. This can be used in any report to identify the actual pricing rule applied.