5 Effective Tagging Strategies For AWS Cloud Cost Allocation

These days, enterprises are heavily focused on adopting and accelerating their cloud deployments on Amazon Web Services(AWS). However, there is one common issue faced by the finance team including senior executives like CFO is tracking the cloud spend by applications, departments or by business units. In any enterprise cost allocation and tracking are mandatory to ensure budgeting compliance and internal charge backs to respective business units.

Are you looking for an easier way to track your AWS cloud spend? Here it is!

In this post, we will highlight tagging strategies that must be enforced by technical and IT teams for cost allocation and tracking. AWS tagging also helps in streamlining the cloud resources across different teams and business units.

AWS has evolved the custom tagging support for most of the services like EC2, RDS, ELB, BeanStalk etc. Think of tag as a label for your AWS resource and there can be multiple tags (up to 10) for the same resource to track it from different dimensions like business unit, application name, resource owner etc. Each tag is a KEY-VALUE pair. The following diagram shows sample tags for EC2 instances.


AWS Resource Tagging Example

Botmetric Recommended Tagging Strategies

  1. Define Mandatory Tags
  2. Every resource should be tagged at least three tags. They are “BUSINESS UNIT”, “APPLICATION NAME”, “ENVIRONMENT”.
  3. We recommend the following naming conventions.

– BUSINESS UNIT or COST CENTRE is the business group to be billed for the AWS resources.

– APPLICATION NAME is used for tracking cost allocation if there are multiple apps under same BU.

– ENVIRONMENT or STACK is used to categorise your spend across production, development and QA groups.

  1. Define Optional Tags
  2. As usage grows inside enterprises, it will be difficult to identify specific owners for the resources so we recommend having an optional tag called “OWNER”. If you need further granularity some cases, we recommend “BUSINESS OWNER”, “TECHNICAL OWNER” etc.
  1. Monitor Resources Without Tags
  2. It’s important to have a program that can monitor your AWS resources for compliance with your mandatory tags. If any resource is detected without the mandatory tag then IT team can be notified via email with list of resources along with their metadata. This check can be done once a day for your entire AWS account.
  1. Shutdown Resources Without Tags
  2. We have an automated internal policy to shutdown resources without tag if they are older than 7 days. This will force compliance and ensure process is not broken.
  1. Configure Cost Allocation Tags
  2. Once you have defined the tags, it’s important to enable AWS cloud cost allocation tags from the billing preferences. This will ensure your billing data includes selected tags. You can exclude tags like OWNER etc from cost allocation tracking.

An effective tagging and monitoring mechanism is an important first step towards ensuring budgeting and cost compliance with respect to charge backs in the enterprises. Botmetric provides cost exploration based on tagging and we will be launching tag-monitoring audit as a part of our cloud insights.

You can do this and lot more with Botmetric, get started with free trial now!