Top AWS tools for cloud cost forecasting

A snapshot of AWS cost forecasting tools

With cost forecasting, enterprises can predict future costs based on infrastructure architecture implementations, as well as current and future usage patterns. The main goal is to prevent situations that would result in unexpected and unnecessarily high AWS costs. This translates into multiple benefits to the organizations, such as accurate budgeting and financial resource allocation. AWS offers multiple tools to implement best practices for cost management and forecasting.

AWS Cost Explorer

Cost Explorer is a tool for visualizing and analyzing how money is being spent in AWS. It delivers multiple configurable reports that display charts based on various dimensions, such as cost by region, service, usage type, resources and accounts in an AWS Organization. It also supports downloading specific report data into CSV files for more detailed analysis. With Cost Explorer, you can view past, current, and future usage trends in an AWS account.

AWS Data Exports

Data Exports are the next generation of Cost and Usage Reports. This feature creates periodic file exports into an S3 bucket, where cost data can be analyzed using SQL statements or custom dashboards using Amazon QuickSight. These reports provide a detailed analysis of costs in an AWS account, with up to 1-hour granularity and visibility at the resource level, which is essential for identifying the top areas to optimize and reduce AWS costs.

Both Data Exports and Cost Explorer are essential tools for cost analysis and forecasting. While Data Exports provides more granular and customizable access to cost data, Cost Explorer offers a straightforward way to view AWS cost information. Cost Explorer also delivers AI-based cost analysis and forecasts up to 18 months into the future.

AWS Budgets

While cost data analysis and visualizations are a critical part of cloud cost forecasting, it is also extremely important to implement automated notifications for when cost and usage exceed an organization's thresholds. This is where AWS Budgets plays a vital role in ensuring costs remain within the expected amount.

This feature supports notifications for specific patterns related to usage types or notifications for when the cost exceeds a certain threshold, either at the account level or for specific usage types. Notifications can be sent to a Simple Notification Service (SNS) topic or to an AWS Chatbot alert that integrates with chat platforms such as Amazon Chime, Slack and Microsoft Teams. Notifications sent to an SNS topic can trigger an email or SMS message, or they can integrate with AWS services such as Lambda functions, which can execute custom processes in response to a budget notification.

Amazon CloudWatch Billing Alerts

CloudWatch Billing Alerts is a feature very similar to AWS Budgets, since it enables CloudWatch metrics related to cost by usage type and also by estimated monthly charges. Billing Alerts can be enabled from the Billing and Cost Management console and once CloudWatch metrics are available, users can configure CloudWatch Alarms that send notifications to SNS topics or AWS Chatbot. This is similar to AWS Budgets and also allows automation tasks in response to cost anomalies.

AWS Pricing Calculator

AWS Pricing Calculator is a tool that generates pricing calculations for all services in AWS. Users can enter the expected usage for AWS resource types and see the expected cost for each one of them. Using the Pricing Calculator tool is an important task early in the design and implementation stages and before updating cloud resources. It's also important to use it when usage patterns are expected to increase in volume.

Implementation strategy for accurate forecasting

While using the right tools is essential, having a cloud cost forecasting strategy is just as important. A good strategy allows organizations to choose the right cost management tools and implement the right configurations.

There are many steps that can be taken to define the right strategy. Some examples are:

• Identifying usage patterns and how they impact cost.
• Determining the right budget thresholds and scenarios.
• Identifying critical resources with cost that needs to be monitored.
• Performing early and regular cost calculations using AWS Pricing Calculator based on expected usage and growth.
• Executing budget planning based on current and expected future revenue and how cloud usage correlates with business growth.

Once these variables are clearly defined, the next step is to configure the right tools in AWS for cost analysis, monitoring, notifications and optimizations. It is highly recommended to execute load tests as early as possible in the development stage, to trigger system behavior at the expected usage volume in production and to execute early cost calculations. This also allows teams to identify patterns early and implement optimizations before the system goes into production, which helps avoid unexpected high costs.

Ernesto Marquez is owner and project director at Concurrency Labs, where he helps startups launch and grow their applications on AWS. He enjoys building serverless architectures, building data analytics solutions, implementing automation and helping customers cut their AWS costs.