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AWS Cost Explorer: How To Analyze Cloud Expenses for Better Savings

Originally Published December, 2023 · Last Updated July, 2024
AWS Cost Explorer: How To Analyze Cloud Expenses for Better Savings

AWS Cost Explorer allows organizations to get an in-depth view of their cloud expenditures and usage, and is critical to successfully leveraging Amazon Web Services (AWS). 

By helping businesses optimize costs and ensure a balanced and efficient cloud infrastructure, Cost Explorer has proven itself as an ideal tool for maximizing cloud investments. 

Cost Explorer’s significance lies in its ability to offer granular insights so that users can make better decisions, helping them identify primary cost drivers and potential areas for savings.  Using predictive analytics and historical data to forecast future spending, its capacity to break down costs by different AWS services, regions, and time periods only adds to its versatility.  

This article details all you need to know about AWS Cost Explorer, including its benefits, and how to use it to better manage your compute and storage spending on AWS.  

What is AWS Cost Explorer?

AWS Cost Explorer is a powerful, web-based tool offered by Amazon Web Services designed to help users analyze, visualize, and understand their AWS spending and usage over time. 

It enables detailed tracking of AWS costs, providing an interactive interface that displays and breaks down expenses by various dimensions such as service, geography, and user-defined cost allocation tags. 

Here’s an overview of its core functionalities:

  • Data Visualization: Cost Explorer presents a user-friendly interface where users can view graphs and charts depicting their AWS spending and usage. These visualizations can be customized based on time periods, services, and various usage dimensions.
  • Detailed Analysis: Users can drill down into their AWS costs and usage data to uncover detailed insights. They can filter and group data by different parameters such as service, region, tags, and more, providing a comprehensive understanding of where and how you use these resources.
  • Cost and Usage Reports: It generates detailed reports that break down AWS costs and usage, enabling users to track trends over time. These reports can be customized and scheduled for regular delivery, providing ongoing insights into cloud expenditure.
  • Forecasting: Cost Explorer uses historical usage patterns to predict future costs, helping in budgeting and financial planning. This forecasting tool can project future spending based on current usage trends.
  • Budgeting Tools: It integrates with AWS Budgets, allowing users to set custom budget thresholds and receive notifications when spending or usage approaches or exceeds these thresholds.
  • Optimization Recommendations: The tool offers recommendations for cost-saving opportunities, such as identifying underutilized resources or suggesting AWS service plans with better pricing.
  • API Access: It provides a Cost Explorer API, enabling programmatic access to AWS usage and cost data, which you can integrate into custom applications or third-party tools for more advanced analysis.

Key benefits of AWS Cost Explorer

By providing detailed insights into cloud spending, you can use Cost Explorer to make data-driven decisions for effective resource management and cost optimization. 

Here are some of its key benefits:

Reduced cloud costs

AWS Cost Explorer enables users to identify and eliminate wasteful spending on AWS resources. By providing detailed insights into usage and costs, users can analyze their AWS spending patterns and pinpoint areas where they are overspending. For instance, identifying underused or idle resources can help cut unnecessary costs.

Cost Explorer’s ability to visualize cost trends over time also helps spot anomalies or spikes in spending that may indicate inefficiencies or unoptimized resource use​​.

Improved resource utilization

Cost Explorer aids significantly in improving resource utilization. Analyzing data with daily, monthly, or even hourly granularity helps users identify under-utilized or over-provisioned AWS resources. 

This in-depth analysis allows for the rightsizing of resources, ensuring that users are not overpaying for resources they don’t fully utilize. Rightsizing resources according to actual needs leads to more efficient resource utilization and cost reduction​​.

Increased visibility

AWS Cost Explorer offers increased visibility into AWS spending, providing a comprehensive view of how your organization distributes these costs across different AWS services. With its user-friendly interface, users can create custom reports to automate cost and usage data analysis at both a high level and in fine detail. 

This enhanced visibility into spending patterns helps users better understand their costs and make informed decisions about their AWS infrastructure. By identifying trends and cost drivers, organizations can align their cloud spend more closely with their business objectives​​​​.

Enhanced financial planning

Another significant benefit of AWS Cost Explorer is its capability to aid in financial planning. The tool includes features to forecast future AWS costs, allowing users to better predict and plan for their financial needs. 

Based on historical usage data, these forecasts can be used to estimate future AWS bills and set alarms and budgets accordingly. This predictive capability is invaluable for organizations looking to manage their cloud budget proactively and avoid overspending​​.

How to analyze your costs with AWS Cost Explorer

AWS Cost Explorer is a dynamic resource for analyzing AWS costs and usage, empowering users with actionable insights to optimize their cloud spending. But, effective usage is key to ensure that your reports align with your cloud financial management goals. 

Here are some tips:

1. Select time range

To begin analyzing your AWS costs, select the appropriate time range for your analysis in Cost Explorer. 

The tool allows you to view data for the last 13 months and forecast your likely spending for the next 12 months. Range selection is crucial as it sets the temporal scope for your analysis, enabling you to examine historical data for trends or predict future costs for budgeting purposes​​.

2. Apply filters

Cost Explorer provides a robust filtering mechanism to help you isolate specific cost drivers. You can filter your cost data by various parameters such as services, accounts, tags, and more. 

This helps hone in on specific areas of your AWS spending, allowing you to identify where the majority of your costs are coming from and where you might need to focus your cost optimization efforts​​.

3. Choose your granularity

Determining the granularity of the data is another critical step. Cost Explorer offers options to view your data at a monthly, daily, or hourly granularity. Selecting the right granularity depends on your specific needs. 

Monthly granularity provides a broad overview, daily granularity is useful for more frequent analysis, and hourly granularity offers the most detailed view, particularly useful for identifying peak usage times or specific events driving costs​​.

4. Analyze data using cost and usage reports

Finally, use the platform’s built-in reporting features to dive deep into your cost and usage data. The tool offers both pre-configured and custom report options, enabling you to tailor your analysis to your specific needs. 

These reports can reveal trends, pinpoint cost drivers, and identify usage patterns. For a comprehensive review, you can download the data into a CSV file for further analysis.

Limitations of AWS Cost Explorer

While AWS Cost Explorer is a powerful tool for managing and analyzing AWS costs, it does have certain limitations that users should be aware of:

Data granularity

AWS aggregates Cost Explorer data at the daily level, which can make it challenging to track costs for specific workloads or applications within shorter time frames. 

For more granular insights, users often have to turn to other AWS tools and services, such as AWS CloudTrail, or even third-party tools that provide more detailed data analytics capabilities​​.

Limited support for custom metrics

Cost Explorer provides valuable insights into AWS cost and usage data but does not support all custom metrics. This can be a limitation for organizations that rely heavily on custom metrics to understand their cloud environment and make informed decisions. To collect and analyze custom metrics, you may need to use other specialized tools like AWS CloudWatch.

Lack of predictive analysis

While Cost Explorer does offer some forecasting capabilities, its focus is primarily on historical cost and usage data. The tool allows users to get forecasted costs up to 12 months into the future based on past usage, but it has limitations. 

For example, it will not provide a forecast if there is not enough data to create a forecast with an 80% prediction interval, which is common for newer accounts or those with less than one full billing cycle. 

Additionally, users cannot change the prediction interval to a custom value, and AWS bases forecasts on the consolidated data from all accounts in AWS organizations.

Resource level details

AWS designed Cost Explorer to provide high-level information on AWS spending. However, this high-level focus can make it difficult to pinpoint specific resource-level cost issues. Users seeking detailed, resource-specific cost breakdowns may find the tool lacking in this regard, and they might need to turn to other AWS tools or services for more detailed analysis at the resource level.

How ProsperOps fills in the gaps of AWS Cost Explorer

ProsperOps is a robust cloud financial management solution that effectively fills in the gaps left by AWS Cost Explorer to provide a more comprehensive source of truth for AWS cost management

Let’s explore how ProsperOps enhances and extends the capabilities of Cost Explorer:

Custom metrics support

Cost Explorer’s support for custom metrics is very limited, which often causes challenges for organizations needing to track and analyze metrics specific to unique workloads or applications. ProsperOps addresses this gap by allowing users to collect, analyze, and incorporate custom metrics into their cost optimization efforts.

Automated cost optimization

ProsperOps goes further than AWS Cost Explorer’s primarily reactive approach by automating cost optimization strategies. It continuously analyzes cloud usage patterns, identifies underutilized or over-provisioned resources, and recommends rightsizing actions. 

It autonomously builds, manages, and optimizes a portfolio of Savings Plans and RIs, ensuring that it is continually adjusting commitments to align with usage needs, and that you are only paying for necessary resources​​.

Real-time discount monitoring

AWS Cost Explorer often experiences a delay in reflecting discount utilization and coverage metrics, typically around two days. ProsperOps differentiates itself by not relying on the same data source as Cost Explorer, enabling real-time monitoring of discounts. This is particularly beneficial in environments where cost dynamics change rapidly, allowing organizations to react promptly and optimize their spending effectively​​.

Better financial forecasting

While Cost Explorer does provide some forecasting capabilities, it has limitations, particularly in terms of the depth and flexibility of its predictive analysis.

ProsperOps offers more nuanced financial forecasting, which does not solely rely on brief lookback periods and takes into account potential decreases in usage or optimizations organizations have planned. This approach provides coverage without requiring significant forecasting for full commitment terms, presenting a more agile and responsive financial planning tool.

ProsperOps: Your ally in navigating AWS cost management

By bridging the gaps in AWS Cost Explorer’s capabilities, ProsperOps delivers a more refined, responsive, and automated approach to cloud cost optimization for AWS users. 

From forecasting AWS cloud resource utilization trends to automatically managing your portfolio of Savings Plans and Reserved Instances, its results-driven approach to FinOps has helped organizations save up to 50% in AWS cloud costs over flexible time frames.

Learn more about how ProsperOps’ dedicated AWS cost management can help your organization.  Sign up for a demo today!

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