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Key considerations when buying AWS cost management tools

Third-party management tools can keep costs down in AWS environments, particularly in a multi-cloud strategy. Learn how to evaluate these tools and the features that they offer.

Once an organization uses AWS infrastructure to host all of its production applications, it can run up five- or six-figure bills per month. Plus, initial AWS adoption often leads to enormous waste and inefficiency that administrators can only rein in with disciplined cost management.

Thus, organizations need disciplined and automated cloud cost management tools. And because native AWS cost management tools are proprietary, they won't meet the needs of organizations that use multiple cloud providers or want advanced visualization and forecasting features. For these companies, it is essential to evaluate third-party cost management tools, as well as understand their most significant features.

Assess your needs

When IT professionals embark on a cloud cost management project, they must engage in a strategic review before they get bogged down in vendor software features. First, they must understand company requirements and deficiencies in their current cost management methods. Too often, technology professionals dive right into spec sheets and feature comparisons before they know what they actually need from AWS cost management tools.

Focus on these four major categories when you begin your evaluation:

  • your organization's multi-cloud strategy;
  • projected size of your AWS deployment;
  • exposure to standards and regulations and the need for verifiable compliance; and
  • overall approach to software vendors.

Here's a closer look at each of these factors.

Multi-cloud strategy and roadmap

Too often, technology professionals dive right into spec sheets and feature comparisons before they know what they actually need.

Most organizations today use a hybrid cloud environment, which generally means they will need to supplement on-premises virtual infrastructure with cloud services. If an organization only plans to use AWS as a public cloud provider, the basic set of AWS cost management tools should be adequate. While these AWS tools don't integrate well with existing on-premises management and automation software, an organization can typically handle the minimal overhead of running two sets of usage and cost tracking tools.

Things get more complicated when an organization adopts a multi-cloud strategy, which entails stitching cloud services from AWS and one or more other public cloud providers into a cohesive, heterogeneous IT infrastructure. AWS cost management tools don't assess other cloud environments, so if an organization plans to use Azure or Google, for example, it might need a third-party, cloud-agnostic tool. Before embarking on product evaluations, consider the following questions:

  • To what extent will the company use cloud services?
  • Will these services be supplemental or coequal with AWS?
  • Do these services require integration with on-premises infrastructure monitoring and management software, or can the company manage cloud and internal environments separately?

Size of deployment and monthly AWS spend

The greater the AWS expenses, the more likely that a third-party application with sophisticated cost optimization features will pay for itself. Conversely, organizations that use AWS primarily as a test/dev platform or for limited disaster recovery capacity probably cannot justify the expense of separate AWS cost management tools.

Before your organization decides whether to purchase a separate, third-party cost management product, evaluate whether native AWS tools are good enough. Perform an ROI analysis with an estimate of AWS overspending bracketed by a 30% to 45% ratio. Then, determine whether that figure is enough to justify a more sophisticated tool.

Also, make sure to factor in company savings if you make more rigorous use of AWS optimization tools, such as CloudWatch and Trusted Advisor. If the balance tips toward third-party cost management tools, do a more thorough ROI analysis as part of the final selection process.

Regulatory and compliance needs

Cloud services significantly complicate compliance with information security, privacy, process and audit regulations, such as GDPR, Health Insurance Portability and Accountability Act and Federal Information Security Modernization Act. While regulatory compliance is mainly tangential to cost management, it does affect the decision to use a third-party product.

Third-party AWS cost management tools often have sophisticated usage reporting capabilities that can feed formal IT audit processes covering data privacy, information security, user access and cost. Organizations in highly regulated industries or those with structured IT management processes might find that third-party cost and usage management products enable better automation and provide additional audit trails for regulatory reporting.

Vendor preference

Organizations must address a few vendor-related questions in this buying process:

  • Will the organization's AWS use grow over time? If so, is there a strong preference to use AWS whenever possible?
  • Will the organization add non-AWS tools and services if vendors can demonstrate a reasonable integration with the platform? It's important to know whether vendors will take ownership over potential problems where the cause is either ambiguous or a composite of AWS and third-party issues.
  • Does the organization prefer working with small, responsive companies? These vendors often provide better, more immediate technical support, but there could be a concern about the long-term viability of these software companies.

Core cost management features

Cost management products -- both on-premises and SaaS products -- share many core features. It's critical to understand the basics of each category, weigh its importance to the organization and assess products based on how they meet particular requirements. From there, select the top two or three options for further evaluation and real-world testing.

Weigh the following criteria:

  • Resource usage reports. Like AWS tools, every third-party product provides a variety of historical usage reports, categorized by date range, service, AWS tag, account or other metadata. Most tools provide a real-time dashboard of current usage that organizations can filter by various parameters. Areas of differentiation include the level of report customization, automation capabilities via exposed APIs, the ability to send notifications when usage or cost levels are exceeded and data visualization.
  • Cost reports and dashboards. All third-party products will emphasize AWS cost data aggregation, which typically generates and categorizes reports by AWS tag, AWS account, assigned project or billing code. Most third-party products can also set budgets for each of these categories and report actual spend against planned spend over various timeframes. Some products can work with existing financial systems to support internal spending chargebacks and generate invoices. But keep in mind that the sophistication of spending and usage forecasting models can vary, with the most innovative products using machine learning to improve accuracy.
  • Platform support. Some organizations need to access cost data from multiple cloud platforms, and they might also need support for other public cloud providers. Indeed, most products start out on AWS and later expand to other platforms, meaning that newer features might be limited to AWS. Note that some products also support on-premises systems, like VMware, and share data with vSphere, Microsoft System Center Configuration Manager or another management system.
  • Cost optimization recommendations. Each product will differ in its optimization features and the breadth of services it covers. Most will match AWS Cost Explorer's ability to recommend Spot or On-Demand Instances that might be more suitable for a Reserved Instance. It's also standard for these tools to suggest EC2 instance sizing in accordance with past usage, as well as identify underutilized or orphaned resources. However, more advanced products include predictive models in the recommendation engine to assess baseline norms and workload trends. These models can also identify costly anomalies that might result from application problems or a security breach. Some tools can also recommend sizes and parameters for other services, like Elastic Block Store volumes based on IOPS profiles and requirements.
  • Governance and security. Most products can use the AWS Identity and Access Management service to integrate existing users and groups for role-based access controls. This integration provides a granular, hierarchical structure for access to various features. Some third-party AWS cost management tools might also integrate with on-premises user directories, such as Microsoft Active Directory. While not a primary focus of cost management products, customizable reports can supplement native AWS monitoring services, such as CloudTrail and CloudWatch. Note that SaaS products should be able to demonstrate compliance with relevant regulations, such as GDPR.

Finally, evaluate the product's provisioning model. There are two choices: self-managed software or a SaaS service. Each option appeals to different constituencies. Although SaaS is easier to procure and imposes virtually no management overhead, user-managed software provides more configuration control and might be less expensive, particularly for large AWS fleets.

Editor's note

With extensive research into cloud cost management vendors, TechTarget editors have focused this series of articles on vendors that specialize in the AWS environment. Our research included Gartner and TechTarget surveys.

This was last published in August 2018

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