Cost management services: choosing the right one

The services at a glance

The AWS Cost Management category of the exam covers four services. Three of them help you see and control what you spend; the fourth, Savings Plans, helps you pay less for what you use. Each service name links to its own tutorial.

Service	What it does
AWS Cost Explorer	Charts and reports of past costs and usage, forecasts of future spend, and Savings Plans and Reserved InstanceRI (Reserved Instance)A billing discount for committing to an instance type in a Region or Availability Zone for one or three years. It is not an instance: running instances that match are billed at the lower rate. AWS now recommends Savings Plans instead.Glossary entryClose recommendations
AWS Budgets	Sets a cost or usage limit, alerts you when actual or forecasted spend crosses it, and can act automatically
AWS Cost and Usage Report	The most detailed billing data, delivered as files to Amazon S3 for analysis with Athena, Redshift, or Quick Sight
Savings Plans	Lower prices in exchange for a 1- or 3-year commitment to spend a set amount per hour on compute, databases, or SageMaker AI

Features that work with all of them

• Cost allocation tags label resources, such as CostCenter or Project, so costs can be grouped by them. A tag must be activated in the Billing and Cost Management console, by the management account in an organization, before it appears in Cost Explorer and the Cost and Usage Report.
  • AWS-generated tags, such as aws:createdBy (the user or role that created a resource), are applied by AWS. The management account must activate them too, and AWS tags only resources created after activation.
  • To make sure resources carry a tag from the start, attach an SCPSCP (Service control policy)An AWS Organizations policy that sets the maximum permissions for IAM users and roles in member accounts. It grants nothing by itself, and it does not apply to the management account.Glossary entryClose that denies the create action, such as ec2:RunInstances, when the aws:RequestTag/CostCenter key is missing (a Null condition). AWS Config only finds untagged resources after they exist.
• Cost categories group costs into your own categories, such as teams or business units, using rules on accounts, tags, and services. They appear in Cost Explorer, Budgets, the Cost and Usage Report, and Cost Anomaly Detection.
• AWS Cost Anomaly Detection uses machine learningML (Machine learning)Software that learns patterns from example data to make predictions or decisions, instead of following rules written by hand. A model is first trained on data, then used to make predictions on new data, which is called inference.Glossary entryClose to spot unusual spend, for example by service, account, or tag, finds the likely root cause, and alerts you by email or Amazon SNS.
  • A monitor watches one dimension: AWS services, linked account, cost allocation tag, or cost category. An AWS managed monitor tracks every value of the dimension separately, such as every account or every value of a tag key, and adds new values automatically. A customer managed monitor tracks only the values you pick (up to 10 accounts or tag values, or one cost category value), added together, for example to give them their own threshold.
  • An AWS services monitor can be created in any account, including a member account with no access to the management account. Linked account, cost allocation tag, and cost category monitors can be created only in the management account.
• AWS Organizations consolidated billing combines the bills of all accounts, so the management account can see and analyze every account's costs, and Savings Plans and Reserved Instance discounts can be shared across accounts.

How they fit together

1. Tag and organize: apply and activate cost allocation tags, and define cost categories.
2. Explore: use Cost Explorer to find what drives your costs and to forecast spend.
3. Control: set budgets with alerts and actions, and turn on Cost Anomaly Detection.
4. Analyze in depth: export the Cost and Usage Report to S3 and query it with Athena, or build dashboards in Quick Sight.
5. Optimize: buy the Savings Plans that Cost Explorer recommends for steady usage, and check utilization and coverage over time.

Reverse mindmap: from the question to the service

Exam scenarios describe what the finance or operations team needs. Find the kind of need, then follow its clue to the service.

• See what was spent
  • Visualize costs by service, account, or tag→ leads to AWS Cost Explorer
  • Forecast next month's spend→ leads to AWS Cost Explorer
  • Line-item, hourly billing data with resource IDs→ leads to Cost and Usage Report
  • Query billing data with SQL→ leads to Cost and Usage Report with Athena
  • Billing data in an open format shared with other clouds→ leads to FOCUS export in AWS Data Exports
• Control what is spent
  • Alert when spend will exceed a limit→ leads to AWS Budgets forecasted alert
  • Stop new resources when the budget is hit→ leads to Budget action with an IAM policy or SCP
  • Detect an unusual spike in spend→ leads to Cost Anomaly Detection
  • Unusual spend for every team tag, including new teams→ leads to AWS managed anomaly monitor on the tag key
  • Unusual spend in a member account, no management access→ leads to AWS services anomaly monitor in that account
  • Savings Plans underused or covering too little→ leads to Savings Plans utilization or coverage budget
• Assign costs to teams
  • Show costs per project or cost center→ leads to Activated cost allocation tags
  • Group accounts and tags into business units→ leads to Cost categories
  • Reject launches without a cost tag→ leads to SCP denying requests without aws:RequestTag
  • Show who created each resource→ leads to Activate the aws:createdBy tag
• Pay less
  • Steady EC2, Fargate, and Lambda use, any Region→ leads to Compute Savings Plan
  • Steady use of one instance family in one Region→ leads to EC2 Instance Savings Plan
  • Steady RDS, Aurora, or DynamoDB use→ leads to Database Savings Plan
  • Steady Lambda and Fargate plus steady Aurora→ leads to Compute Savings Plan plus Database Savings Plan
  • Steady baseline, short peaks, interruptible batch→ leads to Savings Plan for the baseline, On-Demand for peaks, Spot for batch
  • Which plan to buy→ leads to Savings Plans recommendations

Commonly confused pairs

If the choice is between	Choose the first when	Choose the second when
Cost Explorer or Cost and Usage Report	You want charts, forecasts, and recommendations in the console	You need every line item, resource IDs, and SQLSQL (Structured Query Language)The standard language for querying and changing data in relational databases. Analytics services such as Amazon Athena and Amazon Redshift also use SQL.Glossary entryClose analysis in your own tools
Cost Explorer or AWS Budgets	You want to analyze past and forecast spend	You want to be alerted, or act, when spend crosses a limit
AWS Budgets or Cost Anomaly Detection	You know the limit you want to enforce	You want machine learning to flag unexpected spend with no fixed limit
Savings Plans or Reserved Instances	You want a flexible commitment in dollars per hour	You need a capacity reservation in an Availability ZoneAZ (Availability Zone)An isolated location within an AWS Region, made up of one or more data centers with their own power, cooling, and networking. The AZs in a Region are linked by fast, low-latency connections, so spreading resources across them protects against the failure of one site.Glossary entryClose, or a service that only offers reservations

Key takeaways

• See: Cost Explorer for charts and forecasts; the Cost and Usage Report for the most detailed data.
• Control: Budgets for alerts and actions at a limit; Cost Anomaly Detection for unexpected spikes.
• Pay less: Savings Plans for steady usage, with recommendations from Cost Explorer.
• Tags must be activated as cost allocation tags before costs can be grouped by them; enforce tagging at creation with an SCP on aws:RequestTag.

Sources

• AWS Certification: SAA-C03 in-scope AWS services
• AWS Cost Management User Guide: Analyzing your costs and usage with AWS Cost Explorer
• AWS Cost Management User Guide: Managing your costs with AWS Budgets
• AWS Data Exports User Guide: What are AWS Cost and Usage Reports?
• Savings Plans User Guide: What are Savings Plans?
• AWS Billing User Guide: Organizing and tracking costs using AWS cost allocation tags
• AWS Billing User Guide: Using AWS-generated tags
• IAM User Guide: Controlling access to AWS resources using tags
• AWS Billing User Guide: Organizing costs using AWS Cost Categories
• AWS Cost Management User Guide: Getting started with AWS Cost Anomaly Detection