AWS Billing: 5 things you should do right now

One of the things that attracts start ups and enterprise customers to cloud deployments is on-demand pricing: you only pay for what you use. This is certainly the cornerstone of AWS billing principles. In fact, some AWS services, like VPC, Elastic Beanstalk, Cloud formation, Opsworks, and IAM are available at no charge at all. You will only be billed for the compute resources you actually run.

AWS Billing
AWS Billing Principles

Nevertheless, accurately anticipating your monthly costs can sometimes be tricky, so here are five quick tips for managing the Billing on your AWS account.

1. Pay Less when you reserve AWS instances

If you’re currently using an on-demand EC2 or RDS instance, take a few minutes to do a review. If it turns out that your usage is fairly steady over a long period, you may find that reserve pricing can cost you quite a lot less. One up-front payment covering a period of between one and three years can go for a significant discount over the hourly usage for the same instance.

     Comparison between On-Demand and Reserve pricing for periods of one and three years:

AWS Billing

2. Bid on the Spot market for unused AWS Resources

When you launch an instance, you’re given the option of bidding for unused EC2 capacity on the Spot market. When your bid price is equal to or higher than the current Spot price, you will automatically be given use of an EC2 instance of the specified type for as long as the price doesn’t rise above your bid.  Spot bidding can save you up to 90% on the cost of Ec2 instances.
Spot instances are useful for heavy lift tasks such as complex analytics, Big Data processing, scientific computing, and media processing. You just have to be confident that your application can survive unexpected terminations should the Spot price rise above your bid. It may be necessary for you to review the Spot price history in your availability zone.

3. Set CloudWatch alerts to monitor your AWS usage

Use Amazon CloudWatch to have alert notifications sent to you when your monthly charges for using AWS product reach a pre-configured threshold. This frees you from having to log in AWS Billing Console to check for yourself. More importantly, it protects you from the surprises that you can face if you never get around to checking.
How does it work? Suppose your AWS account gets hacked and the intruders decide to spin up few d2.8xlarge instances. When your usage crosses the pre-set threshold, you will receive a message from CloudWatch advising you to take the necessary action.
To get started with CloudWatch, log into the AWS Billing Dashboard, go to Preferences, and select Receive Billing Alerts.

AWS Billing
Update: We should also note the huge value of enabling “Receive Billing Reports” alongside “Receive Billing Alerts” – the comprehensive CSV-formatted reports can be a really useful source of valuable insight (hat tip).

4. Tag your resources 

When you tag your AWS resources to identify their function or association (QA, Dev, Prod, etc) you’ll be able to quickly know which environments are incurring the highest costs and which business unit is exceeding their AWS cost allocations. This can be a particularly effective way to monitor – and control – costs.

AWS Billing

5. Analyse AWS billing reports

AWS provides monthly billing reports that highlight the costs incurred by individual AWS services, and the number of hours used in a month. But some times this isn’t enough when, for instance, you also want to see a forecast of your future expenses or when you’d like to share figures with a customer.
To get this kind of clarity, you can export your billing reports in CSV format or even build a custom application with its own analytics. You could also enable programmatic access to your AWS account and specify an S3 bucket into which you want your billing data copied. AWS will then generate estimated monthly bills several times a day and save them to your bucket. You can also use the S3 bucket data as input for your application. AWS Billing

Written by

Nitheesh Poojary

My professional IT career began nine years back when I was just out of my college. I worked with a great team as an infrastructure management engineer, managing hundreds of enterprise application servers. I found my passion when I got the opportunity to work with Cloud technologies: I'm addicted to AWS Cloud Services, DevOps engineering, and all the cloud tools and technologies that make engineers' lives easier. Currently, I am working as a Solution Architect in SixNines IT. We are an experienced team of engineers that have helped hundreds of customers move to the cloud responsibly. I have achieved 5 AWS certifications, happily helping fellow engineers across the globe through my blogs and answering questions in various forums.

Related Posts

— February 11, 2019

WaitCondition Controls the Pace of AWS CloudFormation Templates

AWS's WaitCondition can be used with CloudFormation templates to ensure required resources are running.As you may already be aware, AWS CloudFormation is used for infrastructure automation by allowing you to write JSON templates to automatically install, configure, and bootstrap your ...

Read more
  • AWS
— January 24, 2019

The 9 AWS Certifications: Which is Right for You and Your Team?

As companies increasingly shift workloads to the public cloud, cloud computing has moved from a nice-to-have to a core competency in the enterprise. This shift requires a new set of skills to design, deploy, and manage applications in the cloud.As the market leader and most mature p...

Read more
  • AWS
  • AWS certifications
— November 28, 2018

Two New EC2 Instance Types Announced at AWS re:Invent 2018 – Monday Night Live

The announcements at re:Invent just keep on coming! Let’s look at what benefits these two new EC2 instance types offer and how these two new instances could be of benefit to you. If you're not too familiar with Amazon EC2, you might want to familiarize yourself by creating your first Am...

Read more
  • AWS
  • EC2
  • re:Invent 2018
— November 21, 2018

Google Cloud Certification: Preparation and Prerequisites

Google Cloud Platform (GCP) has evolved from being a niche player to a serious competitor to Amazon Web Services and Microsoft Azure. In 2018, research firm Gartner placed Google in the Leaders quadrant in its Magic Quadrant for Cloud Infrastructure as a Service for the first time. In t...

Read more
  • AWS
  • Azure
  • Google Cloud
Khash Nakhostin
— November 13, 2018

Understanding AWS VPC Egress Filtering Methods

In order to understand AWS VPC egress filtering methods, you first need to understand that security on AWS is governed by a shared responsibility model where both vendor and subscriber have various operational responsibilities. AWS assumes responsibility for the underlying infrastructur...

Read more
  • Aviatrix
  • AWS
  • VPC
— November 10, 2018

S3 FTP: Build a Reliable and Inexpensive FTP Server Using Amazon’s S3

Is it possible to create an S3 FTP file backup/transfer solution, minimizing associated file storage and capacity planning administration headache?FTP (File Transfer Protocol) is a fast and convenient way to transfer large files over the Internet. You might, at some point, have conf...

Read more
  • Amazon S3
  • AWS
— October 18, 2018

Microservices Architecture: Advantages and Drawbacks

Microservices are a way of breaking large software projects into loosely coupled modules, which communicate with each other through simple Application Programming Interfaces (APIs).Microservices have become increasingly popular over the past few years. The modular architectural style,...

Read more
  • AWS
  • Microservices
— October 2, 2018

What Are Best Practices for Tagging AWS Resources?

There are many use cases for tags, but what are the best practices for tagging AWS resources? In order for your organization to effectively manage resources (and your monthly AWS bill), you need to implement and adopt a thoughtful tagging strategy that makes sense for your business. The...

Read more
  • AWS
  • cost optimization
— September 26, 2018

How to Optimize Amazon S3 Performance

Amazon S3 is the most common storage options for many organizations, being object storage it is used for a wide variety of data types, from the smallest objects to huge datasets. All in all, Amazon S3 is a great service to store a wide scope of data types in a highly available and resil...

Read more
  • Amazon S3
  • AWS
— September 18, 2018

How to Optimize Cloud Costs with Spot Instances: New on Cloud Academy

One of the main promises of cloud computing is access to nearly endless capacity. However, it doesn’t come cheap. With the introduction of Spot Instances for Amazon Web Services’ Elastic Compute Cloud (AWS EC2) in 2009, spot instances have been a way for major cloud providers to sell sp...

Read more
  • AWS
  • Azure
  • Google Cloud
  • SpotInst
— August 23, 2018

What are the Benefits of Machine Learning in the Cloud?

A Comparison of Machine Learning Services on AWS, Azure, and Google CloudArtificial intelligence and machine learning are steadily making their way into enterprise applications in areas such as customer support, fraud detection, and business intelligence. There is every reason to beli...

Read more
  • AWS
  • Azure
  • Google Cloud
  • Machine Learning
— August 17, 2018

How to Use AWS CLI

The AWS Command Line Interface (CLI) is for managing your AWS services from a terminal session on your own client, allowing you to control and configure multiple AWS services.So you’ve been using AWS for awhile and finally feel comfortable clicking your way through all the services....

Read more
  • AWS