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One of the things “everyone knows” about migrating to the Cloud is that it saves companies money. Now you don’t need all those expensive data centers with the very physical costs associated with them. So companies migrate to the Cloud and are so sure they will see their costs plummet… then they get their bill for Cloud usage and experience sticker shock. Typically, this is when our customers reengage 2nd Watch – they ask us why it costs so much, what they can do to decrease their costs, and of course everyone’s favorite – why didn’t you tell me it would be so much?

First, in order to know why you are spending so much you need to analyze your environment. I’m not going to go into how Amazon bills and walk you through your entire bill in this blog post. That’s something for another day perhaps. What I do want to look into is how to enable you to see what you have in your Cloud.

Step one: tag it! Amazon gives you the ability to tag almost everything in your environment, including ELB’s, which was most recently added. I always highly recommend to my customers to make use of this feature. Personally, whenever I create something manually or programmatically I add tags to identify what it is, why it’s there, and of course who is paying for it. Even in my sandbox environment, it’s a way to tell colleagues “Don’t delete my stuff!” Programmatically, tags can be added through CloudFormation, Elastic Beanstalk, auto scaling, CLI, as well as third party tools like Puppet and Chef. From a feature perspective, there are very few AWS components that don’t support tags, and more are constantly being added.

That’s all well and good, but how does this help analytics? Tagging is actually is the basis for pretty much all analytics, and without it you have to work much harder for far less information. For example, I can tag EC2 instances to indicate applications, projects, or environments. I can then run reports that look for specific tags – how many EC2 instances are associated with Project X and what are the instance types? What are the business applications using my various RDS instances? – and suddenly when you get your bill, you have the ability to determine who is spending money in your organization and work with them on spending it smartly.

Let’s take it a step further and talk about automation and intelligent Cloud management. If I tag instances properly I can automate tasks to control my Cloud based on those tags. For example, maybe I’m a nice guy and don’t make my development team work weekends. I can set up a task to shutdown any instance with “Environment = Development” tag every Friday evening and start again Monday morning. Maybe I want to have an application only online at month end. I can set up another task to schedule when it is online and offline. Tags give us the ability to see what we are paying for and the hooks to control that cost with automation.

I would be remiss if I didn’t point out that tags are an important part of using some great 2nd Watch offerings that help manage your AWS spend. Please check out 2W Insight for more information and how to gain control over and visibility into your cloud spend.

-Keith Homewood, Cloud Architect

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