- [Instructor] Hello, and welcome to this lecture on AWS cost management services. I'm John Chell, and I'll be your instructor for this course. We are going to cover several services in this course including the Total Cost of Ownership Calculator, the Billing Dashboard and the AWS Billing and Management Console, AWS Cost Explorer, AWS Budgets, and Consolidated Billing. By the end of this lecture, you should understand what each service generally is and does, and each service's use case, simple enough right?

So let's get started, the first service we'll discuss is the Total Cost of Ownership, or TCO, Calculator. The TCO Calculator is a free service to help compare on premise and AWS costs. With the TCO Calculator you can quickly compare the costs of on-premise hardware to running your production environments on the AWS Cloud. The TCO Calculator creates a report after you complete a very short questionnaire. You only provide basic information about your existing or potential data center. This includes the general number and type of servers and the type and amount of storage. And that is all that you need to provide. Once you have provided this information, the TCO Calculator creates a report with the following: an overall estimate of savings by using AWS, a comparison of your potential on-premise and AWS systems, and a detailed cost comparison between the two systems.

Your report will include estimated on-premises costs including server hardware, network hardware, you server power and cooling costs, the cost of data center space, and IT personnel costs for server management. One important point, the TCO Calculator makes certain assumptions in calculating these costs such as the number of personnel required per server. Due to these assumptions the TCO Calculator will likely not match your costs exactly. The purpose of this service is only to provide a reasonable estimate. Now that we've discussed the TCO Calculator, let's move on to the Billing Dashboard. The Billing Dashboard provides graphs that show the overall cost and usage for the previous month, as well as the current month to date. There are three separate graphs, we'll briefly cover each of them.

First is the Spend Summary Graph. It shows the costs for the previous month, the current month to date, and estimates your total spent for the current month end. The other two graphs are very similar and have similar names, they are month-to-date service by spend and month-to-date spend by service. Now both graphs provide your costs month-to-date, and they provide information on the services you used the most, not all services you may use. But here's the difference, month-to-date spend by service shows the total cost by service as a percentage. Month-to-date service by spend shows the actual amount per service. Take a look at this example where you've spent $10,000 month to date.

You can see the two graphs displaying the same cost per service, one as a percentage and the other as a dollar amount. Now that we've covered the Billing Dashboard let's move on to AWS Cost Explorer. Cost Explorer also provides spending and usage data but for a longer period of time and with a wider selection of graphs to review the data. Cost Explorer provides several different services. First, it graphs historic data for up to 12 months. Second, it provides forecasts for up to three months in the future. And finally, it provides Reserved Instance Recommendations. These recommendations analyze your EC2 instance usage and identify where to replace on demand instances with reserved ones to save on costs.

Finally, Cost Explorer also includes numerous preset filters, which offer a wider variety of graphs than the Billing Dashboard. The list of filters here is only a partial list. So as you can see, Cost Explorer serves a different purpose than the Billing Dashboard. The variety of graphs that it provides over a period of up to 12 months allows you to quickly review data and identify longterm trends. However, there are a few limitations.

First, Cost Explorer provides estimates solely based on your account's history. How useful the estimates are depends on how stable your activity is. If your traffic and workloads are fairly stable and consistent with predictable highs and lows, then the estimates should be useful. Second, Cost Explorer filters are preset. The service does not support custom filters or graphs at this point. However, you can use AWS Cost and Usage Reports, which use the same account data as Cost Explorer to export the data in CSV format and then upload it into other graphing services. AWS actually recommends using Cost Explorer and Cost and Usage Reports together. Cost Explorer can help you discover trends quickly, and Cost and Usage Reports allow you to investigate these trends in detail.

Next, we'll cover AWS Budgets. AWS Budgets allow you to set service limits and alert you if you exceed them. There are three types of budgets available. Cost budgets, which set a cost limit for a service. Usage budgets, which limit service usage. And finally, Reserved Instance Utilization Budgets, these budgets ensure your reserved instances are operating at their desired levels. With this budget you can receive alerts if any are operating below the level you've specified. Any Reserved Instances which are idle are likely a poor investment and may need to be reconsidered. And that's AWS Budgets, it's all about setting and maintaining limits related to cost and usage as the service name implies.

There is one additional billing option that we should cover, which is Consolidated Billing. It's very simple; if your company has separate AWS accounts, it can consolidate their separate bills into one combined bill, making costs easier to track. One other potential benefit is volume-pressing discounts. If your company's combined usage of any service meets the volume pricing requirement, the company pays less for that service. So Consolidated Billing simplifies the billing process and potentially can lower your costs.

And this concludes my lecture on Billing and Cost Management Services in AWS. After viewing this lecture, you should be familiar with each of the cost management tools we've discussed, understand what they offer, how each is unique, and know each service's general use case. In the next lecture, we will discuss the different customer support plans offered by AWS. If you're ready to continue, let's keep going.