Basic cloud cost allocation tools may be suitable for some smaller businesses, but for businesses that want greater visibility into how cloud budgets are being spent, they lack versatility. More sophisticated tools exist, but finding the right solution to support business needs can present significant challenges.
Allocating cloud costs is more complex than allocating cost for physical IT infrastructures because of factors such as self-service provisioning, pay-as-you-go consumption, and limitless scalability. Acknowledging the complexity, most cloud service provides make cost allocation tools available to customers. These do the job to a certain degree, but not as much as most customers would like.
Possibly the best of the service providers’ cost allocation tools is AWS’ Cost Explorer, which allocates costs according to the tags applied to each resource. However, the tool has its limitations inasmuch as not every AWS service can be tagged, businesses have to have a uniform tagging policy in order for Cost Explorer to be effective, and (naturally) AWS´ cost allocation tools only report on AWS costs—which is only partially helpful if your business operates in a multi-cloud environment.
More sophisticated cloud cost allocation tools
There are many commercially-available cloud cost allocation tools that overcome the limitations of AWS´ Cost Explorer. We are not going to go through them one-by-one, because their capabilities frequently change—as do businesses' requirements. Instead we will list the key capabilities cloud cost allocation tools should possess to provide the depth and breadth of reporting most often required.
Costs by business perspective
Most businesses want their cost allocation tools to report costs from multiple viewpoints. Common “perspectives” include by environment, by owner, by department, by application, and by product line. These perspectives will likely change over time, so when choosing cost allocation tools, it is important to consider the level of flexibility you may require in the future.
Depth of detail
Basic cloud cost allocation tools usually report on costs based on tags or other group structures. More sophisticated cloud cost allocation tools enable businesses to allocate costs based on resources and/or usage to provide more depth of detail (for example—spend for compute, storage, and data transfer on an individual department´s web server).
Although AWS´ Cost Explorer offers a number of customizable options, these may not be as comprehensive as some businesses would like. Sophisticated cost allocation tools enable businesses to customize reports by stakeholder or region, export reports in different formats, customize charts, and filter reports by specific criteria—i.e. by time of day or by period of time.
Most businesses want to receive reports proactively, either via email or a messaging application. Flexibility in scheduling reports is another key differentiator in cost allocation tools. Basic tools require that you log into a console to get your data; whereas more sophisticated tools deliver scheduled reports directly to key personnel through their preferred channel of communication.
For some businesses, a few of these capabilities will be convenience capabilities rather than key capabilities—i.e. automated delivery. However, one capability that is not a luxury item is multicloud support. Even if you are exclusively deploying resources in just one cloud at present, you need to factor into your evaluation that it is unlikely your cloud strategy will remain this way forever.
Using CloudHealth as a cost allocation tool
CloudHealth is best known as a cloud management platform with advanced optimization and governance capabilities, but it also offers maximum versatility when it comes to cost allocation reporting. CloudHealth collects data from every source to give you complete visibility into your cloud environment, and the ability to view and sort information based on dynamic parameters.
This allows you not only to look at costs from every possible angle, but also usage and performance - giving you the opportunity to uncover trends and identify inefficiencies that otherwise may go unnoticed. This depth of information helps you determine what’s working and what’s not working, and make well-informed decisions in order to adapt quickly.