Cloud Cost Management

Overview

Cloud cost management involves monitoring, analyzing, and optimizing cloud spending. Implement strategies using reserved instances, spot pricing, proper sizing, and cost allocation to maximize ROI and prevent budget overruns.

When to Use

• Reducing cloud infrastructure costs
• Optimizing compute spending
• Managing database costs
• Storage optimization
• Data transfer cost reduction
• Reserved capacity planning
• Chargeback and cost allocation
• Budget forecasting and alerts

Implementation Examples

1. AWS Cost Optimization with AWS CLI

# Enable Cost Explorer
aws ce get-cost-and-usage \
  --time-period Start=2024-01-01,End=2024-01-31 \
  --granularity MONTHLY \
  --metrics "UnblendedCost" \
  --group-by Type=DIMENSION,Key=SERVICE

# List EC2 instances for right-sizing
aws ec2 describe-instances \
  --query 'Reservations[*].Instances[*].[InstanceId,InstanceType,State.Name,LaunchTime,Tag]' \
  --output table

# Find unattached EBS volumes
aws ec2 describe-volumes \
  --filters Name=status,Values=available \
  --query 'Volumes[*].[VolumeId,Size,State,CreateTime]'

# Identify unattached Elastic IPs
aws ec2 describe-addresses \
  --query 'Addresses[?AssociationId==null]'

# Get RDS instance costs
aws rds describe-db-instances \
  --query 'DBInstances[*].[DBInstanceIdentifier,DBInstanceClass,StorageType,AllocatedStorage]'

# Create budget alert
aws budgets create-budget \
  --account-id 123456789012 \
  --budget BudgetName=MyBudget,BudgetLimit='{Amount=1000,Unit=USD}',TimeUnit=MONTHLY,BudgetType=COST \
  --notifications-with-subscribers \
    'Notification={NotificationType=ACTUAL,ComparisonOperator=GREATER_THAN,Threshold=80},Subscribers=[{SubscriptionType=EMAIL,Address=user@example.com}]'

# List savings plans
aws savingsplans describe-savings-plans

# Get reserved instances
aws ec2 describe-reserved-instances \
  --query 'ReservedInstances[*].[ReservedInstancesId,InstanceType,State,OfferingType,Duration]'

2. Terraform Cost Management Configuration

# cost-management.tf
terraform {
  required_providers {
    aws = {
      source  = "hashicorp/aws"
      version = "~> 5.0"
    }
  }
}

provider "aws" {
  region = var.aws_region
}

variable "monthly_budget" {
  default = 10000
  description = "Monthly budget limit"
}

# CloudWatch Cost Anomaly Detection
resource "aws_ce_anomaly_monitor" "cost_anomaly" {
  monitor_name    = "cost-anomaly-detection"
  monitor_type    = "DIMENSIONAL"
  monitor_dimension = "SERVICE"
  monitor_specification = jsonencode({
    Dimensions = {
      Key          = "SERVICE"
      Values       = ["Amazon EC2", "Amazon RDS", "AWS Lambda"]
    }
  })
}

# Anomaly alert
resource "aws_ce_anomaly_subscription" "cost_alert" {
  account_id    = data.aws_caller_identity.current.account_id
  display_name  = "Cost Alert"
  threshold     = 100
  frequency     = "DAILY"
  monitor_arn   = aws_ce_anomaly_monitor.cost_anomaly.arn
  subscription_type = "EMAIL"

  subscription_notification_type = "FORECASTED"
}

# Budget with alerts
resource "aws_budgets_budget" "monthly" {
  name              = "monthly-budget"
  budget_type       = "COST"
  limit_amount      = var.monthly_budget
  limit_unit        = "USD"
  time_period_start = "2024-01-01_00:00"
  time_period_end   = "2099-12-31_23:59"
  time_unit         = "MONTHLY"

  tags = {
    Name = "monthly-budget"
  }
}

# Budget notification
resource "aws_budgets_budget_notification" "monthly_alert" {
  account_id      = data.aws_caller_identity.current.account_id
  budget_name     = aws_budgets_budget.monthly.name
  comparison_operator = "GREATER_THAN"
  notification_type   = "ACTUAL"
  threshold       = 80
  threshold_type  = "PERCENTAGE"

  notification_subscribers {
    address              = "user@example.com"
    subscription_type    = "EMAIL"
  }
}

# Savings Plan Commitment
resource "aws_savingsplans_savings_plan" "compute" {
  commitment  = 10000
  payment_option = "ALL_UPFRONT"
  plan_type   = "COMPUTE_SAVINGS_PLAN"
  term_in_months = 12

  tags = {
    Name = "compute-savings"
  }
}

# Reserved Instances
resource "aws_ec2_instance" "app" {
  ami           = "ami-0c55b159cbfafe1f0"
  instance_type = "t3.medium"

  tags = {
    Name = "app-instance"
  }
}

# Reserve the instance
resource "aws_ec2_capacity_reservation" "app" {
  availability_zone       = "us-east-1a"
  instance_count          = 1
  instance_platform       = "Linux/UNIX"
  instance_type           = aws_ec2_instance.app.instance_type
  reservation_type        = "default"

  tags = {
    Name = "app-reservation"
  }
}

# CloudWatch Dashboard for cost monitoring
resource "aws_cloudwatch_dashboard" "cost_dashboard" {
  dashboard_name = "cost-dashboard"

  dashboard_body = jsonencode({
    widgets = [
      {
        type = "metric"
        properties = {
          metrics = [
            ["AWS/Billing", "EstimatedCharges", { stat = "Average" }]
          ]
          period = 86400
          stat   = "Average

...