Day 1 - Cost Explorer and Tags

AWS Cost Optimisation Advent Calendar 2024

4 min read time

#aws

Welcome to day 1 of the unofficial AWS Cost Optimisation Advent Calendar 2024 where every day we will be sharing new tips or tricks to help you optimise your cloud costs before Christmas 2024.

The target audience for this calendar is anyone who is interested in cloud cost optimisation, specifically on AWS.

The goal is to get you thinking about your AWS costs for 10-15 minutes each day in the lead up to Christmas so that you can sleep easy over the holiday period knowing you are on top of your costs or what you need to do in the New Year.

Everyone will be running different workloads and many cost optimisation strategies require a deep understanding of specific needs and requirements. We hope that if some of the tips are not relevant to your workloads they could be a decent reference to come back to if you ever find yourself using these services.

Today's tip may not be groundbreaking, but it is essential for understanding and benefiting from the upcoming tips in the following days.

Tip 1: Enable AWS Cost Explorer and tag your resources

AWS Cost Explorer is a free tool that allows you to view and analyse your AWS costs and usage. It provides a range of features that can help you understand your costs and usage patterns, and identify opportunities for cost savings.

If you have not done so already, enable this feature in the AWS Management Console by navigating to the Billing and Cost Management section and selecting Cost Explorer.

A powerful feature in AWS Cost Explorer is the ability to filter by tags on your resources, enabling you to group and analyse costs by environment, application or any other category.

A very common strategy is to add an Environment tag to all resources and set the value to prod for your "live" environment and staging for your "test" environment and then any other environments that might be specific to your organisation.

Other common tags are:

Application - the application that the resource belongs to eg. Marketing Website, API, etc. Owner - the person or team responsible for the resource

Whilst tagging a few resources manually is easy, tagging hundreds or thousands of resources can be a daunting task.

There are a few ways to automate this process:

Terraform and/or Cloudformation

If you are already using a tool like terraform or CloudFormation to manage your infrastructure, these tools provide convenient ways to bulk tag resources.

In terraform you can do this on an individual resource but you can also tag entire modules or applications at once using the default_tags argument in the provider block.

provider "aws" {
  default_tags {
    tags = {
      Environment = var.environment
      Application = "my-application"
      Owner       = "my-team"
      ManagedBy   = "terraform"
    }
  }
}

More information on default tags in terraform can be found here.

CloudFormation also supports tagging resources using the Tags property on individual resources or entire stacks.

AWSTemplateFormatVersion: "2010-09-09"
Description: Stack Description
Parameters:
  StackName:
    Type: String
    Description: Name of the stack

Tags:
  - Key: Application
    Value: !Ref "AWS::StackName"
  - Key: Environment
    Value: production
  # Add more default tags as needed

Whether tagging is a 5 minute job for you to do today, or a stream of work that needs to be implemented in the future, make sure this is in your backlog as it greatly helps you understand your costs and find areas you can improve.

Join us tomorrow for the next edition!

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