Migration Optimization Tips

3 Ways CloudHealth Helps You Allocate Your Costs

One of the key fundamentals to cost effectively managing a large-scale cloud environment is the ability to align your costs and organize resources in ways that mirror your business.

Well, in reality, it can be a real challenge to identify and organize all of the moving parts that allow you to evaluate your cloud environment from a business perspective. Furthermore, creating groups that meet business-reporting requirements can be difficult if there is a large “unknown/other” bucket at the end of each month.

While tagging is a great way to get started in allocating costs across your infrastructure and usage, it doesn’t cover all the bases for accurate reporting. So where does tagging fall short in cost allocation? And can CloudHealth help solve this?

#1 – Aligning untaggable assets to business metrics

There are a number of resources, as well as indirect services, that either cannot be tagged through your cloud provider or are not dedicated to a specific cost center. In order to account for these costs, it’s important to have a way to align to your business groups so you can track spikes.

To track your untaggable assets, CloudHealth maintains a historical record of all assets over their lifecycle, including objects and metadata. Tracking your costs at the resource level is key to driving more accurate cost allocation analyses.

As for indirect costs, CloudHealth allows you to create policies to define how to allocate these costs within your environment. You can do this in two ways:

  • Allocate charges to your costs centers by a fixed percentage.
  • Tie allocation charges to cost centers by usage percentage of another resource. For example, if engineer A uses 20% of your EC2 usage one month, engineer B uses 50%, and engineer C uses 30%, you can assign AWS support costs to these engineers based on your EC2 usage.

#2 – Implementing and enforcing a unified tagging structure across an entire organization

In order to ensure you have a unified tagging structure across your organization, you need to know what you don’t know. Finding untagged resources in a complex environment is a daunting task. Without a way to govern your tagging structure and bring accountability to untagged resources, it’s unachievable.

CloudHealth allows you to set a policy to notify key stakeholders of all untagged resources, and resources with non-conforming tags. Your stakeholders can receive reports that highlight which resources have been spun up without proper tags in the past day, week, or month. There’s no way to set, govern, and enforce a coherent tagging structure across a large-scale environment without a cloud management service like CloudHealth keeping all stakeholders accountable.

#3 – Maintaining historical data as naming and tagging evolve

When trying to immediately see and understand cost trends in your cloud environment, you need to be able to analyze historical data. As your business and infrastructure evolve, so will your tags, naming conventions and the way you view your business.

Unfortunately, updating your tags or names will cause you to lose historical data.

CloudHealth eliminates this challenge by tracking assets at a resource level so you can preserve historical data while having the freedom to advance your tagging structure with your cloud.

Final thoughts

Having the ability to align your cloud assets with your environment is the most important prerequisite to reigning in cloud sprawl. Although tagging is step one, you need a solution that tracks assets at a resource level and aligns them with your business metrics to ensure complete reporting accuracy and flexibility. Only then can you get full visibility into your cloud spend.

Another way to gain full visibility into your cloud and cloud spend is by creating a Cloud Financial Management practice. Cloud Financial Management (CFM), also known as FinOps or Cloud Cost Management, is a function that helps align and develop financial goals, drive a cost-conscious culture through best practices, establish guardrails to meet financial targets, and gain greater business efficiencies.

Want to learn more about establishing a Cloud Financial Management practice and best practices? Read our white paper Building a Successful Cloud Financial Management Practice.