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Managing AWS Billing

Without a doubt, AWS has fundamentally changed how modern enterprises deploy IT infrastructure.  Their services are flexible, cost effective, scalable, secure and reliable. And while moving from on-premise data centers to the cloud is, in most cases, the smart move; once there managing your costs becomes much more complex.

On-premise costs are straight forward, enterprises purchase servers and amortize their costs over the expected life.  Shared services such as internet access, racks, power and cooling are proportionally allocated to the cost of each server. AWS on the other hand, invoices each usage type separately.  For example, if you are running a basic EC2 instance, you will not only be charged for the EC2 box usage but also the data transfer, EBS Storage and associated snapshots. You could end up with as many as 13 line items of cost for a single EC2.

Example: Pricing line items for a single c4.xlarge Linux virtual machine running in the US East Region (Click on image to view larger)

Linux Example_Managing AWS Billing

When examining the composition of various workload types the numbers of line items to manage will vary. A traditional VM-based workload may have 50 cost line items for every $1,000 of spend while an agile, cloud-native workload may have as many as 500 per $1,000 and a dynamic workload leveraging spot instances may have upwards of 1,200 per $1,000. This “parts bin” approach to pricing makes the job of cost account challenging.

To address this complexity and enable accurate cost accounting of your cloud costs; we recommend creating a business-relevant financial tagging schema to organize your resources and associated cost line items based on your specific financial accounting structure.

Here are some recommended financial management tags you should consider (Click on image to view larger):

Financial Management Tags_AWS Billing Management

AWS Tagging data integrity is extremely important in ensuring the quality of the information it provides and is directly dependent upon the rigor applied in adopting a systematic and disciplined approach to AWS Tagging.

Financial Management Tagging – Best Practices

  • Create a framework or standard for your enterprise that outlines required tag names, tag formatting rules, and governance of tags.
  • Tags should be enforced and automated at startup of the resource via Cloud Formation templates or other infrastructure as code tools, such as Terraform, to ensure cost accounting details are captures from time of launch.
    • NOTE:  Tags are point in time based.  If a resource is launched without being tagged and then tagged sometime in the future, all hours the resource ran prior to being tagged will not be included in tag reports in the AWS console.
  • Manually creating tags and associated values is strongly discouraged as it leads to miss-tagged and untagged resources and in-accurate cost accounting
  • Select all upper case or all lower-case keys and values to avoid discrepancies with capitalization.
    • NOTE: “Production” and “production” are considered two different tag names or values.
  • Monitor resources with AWS Config Rules and alert for newly created resources that are not tagged

Once your tagging schema is created, automation is in place to tag resources during startup and alerts are set up to ensure tagging is managed, you can accurately to view, track and report your cost and usage using any of your tagging dimensions.

Financial Management Reporting – Best Practices

  • Using your tagging schema, group your resources by workload.
  • Apply Reserved Instance discounts to the workloads you intended them to be for.
    • NOTE: 2nd Watch’s CMP Finance Manager tool converts reserved instances into resources so that you can add them to the workload they were intended for.
  • Organize your groups to match your specific multi-level financial reporting structure.
  • Managed shared resources
    • Create groups for shared resources. If you have resources that are shared across multiple workloads such as a database used my multiple applications or virtual machines with more than one applications running on it, create groups to capture these costs and allocate them proportionally to the applications using them.
  • Manage un-taggable resources
    • Create a group for un-taggable resources. Some AWS resources are not taggable and should be grouped together and their associated costs proportionally allocated to all applications.
  • Manage spend to budget
    • Create budgets and budget alerts for each group to ensure you stay in budget throughout the year.
    • Key alerts
      • Forecasted month end cost exceeds alert threshold
      • MTD cost is over alert threshold
      • Forecasted year end cost exceeds alert threshold
      • YTD cost is over alert threshold
    • Sign up to receive monthly cost and usage reports for integration into your internal cost accounting system.
      • Cost by application, environment, business unit etc.

 

Even though AWS’ “parts bin” approach to pricing is complicated, following these guidelines will help ensure accurate cost accounting of your cloud spend.

 

–Timothy Hill, Senior Product Manager, 2nd Watch

 

 

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Raising the Bar – Managing Enterprise Cloud Workloads

Momentum continues to build for companies who are migrating their workloads to the cloud, across all industries, even highly regulated industries such as Financial Services, Health Care, and Government. And it’s not just for small companies and startups. Most of the largest companies in the world – we’re talking Fortune 500 here – are adopting rapid and aggressive strategies for migrating and managing their workloads in the cloud. While the benefits of migrating workloads to the cloud are seemingly obvious (cost savings, of course), the “hidden” benefits exist in the fact that the cloud allows businesses to be more nimble, enabling business users with faster, more powerful, and more scalable business capabilities than they’ve ever had before.

So what do enterprises care about when managing workloads in the cloud? More importantly, what should you care about? Let’s assume, for the sake of argument, that your workloads are already in the cloud – that you’ve adopted a sound methodology for migrating your workloads to the cloud.

GraphRaise your expectations I would submit that enterprises should raise their expectations from “standard” workload management. Why? Because the cloud provides a more flexible, powerful, and scalable paradigm than the typical application-running-in-a-data-center-on-a-bunch-of-servers model. Once your workloads are in the cloud, the basic requirements for managing them are not dissimilar to what you’d expect today for managing workloads on-premise or in a data center.

 

The basics include:

  • Service Levels: Basic service levels are still just that – basic service levels – Availability, response time, capacity, support, monitoring, etc. So what’s different in the cloud world? You should pay particular attention to ensuring your personal data is protected in your hosted cloud service.
  • Support: Like any hosting capability, support is very important to consider. Does your provider provide online, call center, dedicated, and/or a combo platter of all of these?
    • Security: Ensure that your provider has robust security measures in place and mechanisms to preserve your applications and data
  • Compliance: You should ensure your cloud provider is in compliance with the standards for your specific industry. Privacy, security and quality are principal compliance areas to evaluate and ensure are being provided.

 

Now what should enterprises expect on top of the “basics?”

  • Visibility: When your workloads are in the cloud, you can’t see them anymore. No longer will you be able to walk through the datacloud gears center and see your racks of servers with blinking lights, but there’s a certain comfort in that, right? So when you move to the cloud, you need to be able to see (ideally in a visual paradigm) the services that you’re using to run your critical workloads
  • Be Proactive: It used to be that enterprises only cared if their data center providers/data center guys were just good at being “reactive” (responding to tickets, monitoring apps and servers, escalating issues, etc). But now the cloud allows us to be proactive. How can you optimize your infrastructure so you actually use less, rather than more? Wouldn’t it be great if your IT operations guy came to you and said “Hey, we can decrease our footprint and lessen our spend,” rather than the other way around?
  • Partner with the business: Now that your workloads are running in the cloud, your IT ops team can focus more on working with the business/applications teams to understand better how the infrastructure can work for them, again rather than the other way around, and they can educate the business/applications teams on how some of the newest cloud services, like elasticity, big data, unstructured data, auto-scaling, etc., can cause the business to think differently and innovate faster.

 

Enterprises should – and are – raising their expectations as they relate to managing their workloads in the cloud. Why? Because the cloud provides a more flexible, powerful, and scalable paradigm than the typical hardware-centric, data center-focused approach.

-Keith Carlson, EVP of Professional and Managed Workload Services

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What is CloudTrail?

Amazon Web Services™ (AWS) released a new service at re:invent a few weeks ago that will have operations and security managers smiling.  CloudTrail is a web service that records AWS API calls and stores the logs in S3.  This provides organizations the visibility they need to their AWS infrastructure to maintain proper governance of changes to their environment.

2nd Watch was pleased to announce support for CloudTrail in our launch of our 2W Atlas product.  2W Atlas is a product that organizes and visualizes AWS resources and output data.  Enterprise organizations need tools and services built for the cloud to properly manage these new architectures.  2W Atlas provides organizations with a tool that enables their divisions and business units to organize and manage the CloudTrail data for their individual group.

2nd Watch is committed to assisting enterprise organizations with the expertise and tools to make the cloud work for them.  The tight integration 2nd Watch has developed with CloudTrail and Atlas is further proof of our expertise in bringing enterprise solutions that our customers demand.

To learn more about 2W Atlas or CloudTrail, Contact Us and let us know how we can help.

-Matt Whitney, Sales Executive

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