AWS Cost Allocation Tags: Implementation, Challenges, and Alternatives

Aug 8th, 2023
AWS Cost Allocation Tags: Implementation, Challenges, and Alternatives
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AWS Cost Allocation Tags: Implementation, Challenges, and Alternatives

Introduction to AWS Cost Allocation Tags

Are you tired of sifting through complex billing reports to pinpoint where your Amazon Web Services (AWS) costs are coming from? You're not alone! A significant third of cloud computing costs go to waste. With AWS commanding the majority of the cloud market share, managing your AWS spending through AWS cost allocation tags is more crucial than ever.

Whether you're a small business or a large enterprise, these tags can offer enhanced visibility and control over your cloud spending.

Understanding AWS Cost Allocation Tags

What are AWS Cost Allocation Tags?

AWS cost allocation tags are specific labels used for classifying, organizing, and identifying your resources. These key-value pairs simplify the management and tracking of resource usage. By assigning these tags, you can monitor your overall AWS costs through Cost Explorer or the AWS API.

Types of AWS Cost Allocation Tags

There are two types of AWS cost allocation tags:

  1. AWS-generated tags: Automatically defined by AWS, these include system-defined "createdBy" tags.
  2. User-defined AWS tags: Tags that you create and attach to resources, like a "Project" tag for resources associated with a specific project.

Utilizing both types of AWS cost allocation tags can grant a more nuanced understanding of your costs, aiding in more informed decision-making.

How to Implement AWS Cost Allocation Tags: A Step-by-Step Guide

Implementing AWS cost allocation tags can be achieved through several methods. Here's a comprehensive guide to help you get started:

Using AWS Management Console

  1. Open the AWS Management Console, navigate to the AWS Resource Group, then the "Tags Editor" section.
  2. Select the resource you want to tag and follow the instructions to add the tag.
  3. Repeat for any additional tags or resources.

Using AWS Resource Options

Alternatively, you can navigate to the specific AWS resource and use the "Tags" tab. Repeat for other resources.

Programmatic Tagging with AWS API

For a large number of resources or automated tagging, the AWS API can be employed. Refer to AWS documentation for further guidance.

Challenges and Alternatives in AWS Cost Allocation Tagging

While AWS cost allocation tags are incredibly useful, they can present challenges in complex environments. Leveraging third-party tools or specialized AWS services may offer more advanced capabilities.

AWS cost allocation tags are indispensable for achieving visibility and control over your cloud spending. By understanding what they are and how to implement them, you can stay ahead of your expenses. Whether manually or programmatically, these tags can be an essential tool in your AWS cost management toolkit. Explore the best options for your needs and start optimizing your cloud costs today.

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Challenges and Solutions of AWS Cost Allocation Tags

AWS cost allocation tags are essential in managing and tracking cloud expenditures, but implementing them isn't always straightforward. Understanding the challenges of AWS cost allocation tags can help in devising strategies to make the most of them.

Primary Challenges of AWS Cost Allocation Tags

AWS cost allocation tags have specific challenges that users must overcome:

1. Time of Application:

AWS cost allocation tags must be applied at the resource creation stage. Adding or altering tags afterward can be challenging or unfeasible.

2. Planning and Expertise Required:

Effectively utilizing AWS cost allocation tags requires careful planning, knowledge, and consistent application across the organization.

3. Limited Scope:

While AWS cost allocation tags provide insights into spending on each resource type, they don't offer detailed breakdowns for specific teams or projects within an AWS account.

4. Non-Retroactive Nature:

AWS cost allocation tags only reflect costs after their application, limiting their use in historical data analysis.

5. Single Account Limitation:

For organizations with multiple AWS accounts, AWS cost allocation tags can only track costs within a single account.

Technical Challenges of AWS Cost Allocation Tags

Specific technical challenges make achieving accurate cost allocation with AWS cost allocation tags especially difficult:

1. Tag Propagation:

Ensuring correct tagging within an AWS account can be intricate, as AWS cost allocation tags may not propagate to all associated resources.

2. Tagging Policies:

Consistent enforcement of tagging policies is vital for accurate cost allocation using AWS cost allocation tags, particularly in multi-department environments.

3. Resource Ownership:

Determining responsibility for shared resources can be complex, making AWS cost allocation tags less effective without clear ownership policies.

4. Cost Allocation Reports:

Complex AWS environments may struggle to accurately assign costs using AWS Cost and Usage Report (CUR), highlighting a limitation of AWS cost allocation tags.

Conclusion: Looking Beyond AWS Cost Allocation Tags

While AWS cost allocation tags are an invaluable tool, the aforementioned challenges call for comprehensive strategies or even alternative methods for detailed cost tracking.

7 Top Tools for Enhancing AWS Cost Allocation Tags

For those seeking advanced solutions for AWS cost tracking and allocation, here are top tools that complement and extend the functionalities of AWS cost allocation tags:

These tools can significantly augment the capabilities of AWS cost allocation tags, providing a more nuanced understanding of your AWS expenditures.

1. Finout's Holistic cloud cost solution

Finout's AWS Cost Management

Finout is a holistic cost management platform that serves as a single source of truth for all your cloud costs across AWS, GCP, Kubernetes, Datadog, and Snowflake. With its intuitive interface, you can quickly and easily see where your money goes, giving you the granular data you need to make informed decisions about your AWS usage.

If you are facing challenges with AWS tagging and are looking for alternatives, you should consider Finout. With Finout’s virtual tags feature, you can remap cost filters into tag values, allowing you to track your spending across different cloud platforms and billing origins. 

Virtual tags can also combine AWS tags, Kubernetes labels, and GCP namespaces into a single dashboard, making it easier to track expenses by development teams, features, and environments. Additionally, virtual tags can solve issues with wrongly tagging AWS services or using different names for tags.

One thing that sets Finout apart from other cloud cost monitoring tools in this regard is the fact teams can create customizable dashboards, reports, and notifications to suit their infrastructure needs. Using Finout, IT teams are easily aware of any unusual spending patterns or anomalies. That can help you catch any potential issues often and early.

Finout lets you dig deep into your cloud usage and actual cost per customer, feature, or team. This gives people the visibility they need to cut costs together and make better decisions. 

2. AWS Native monitoring tools


AWS provides native solutions that serve as an excellent first step for companies with relatively simple cloud billing requirements.

  • AWS Cost Explorer: This is one of the most popular tools. It allows you to visualize and analyze your AWS costs and usage. With Cost Explorer, you can create custom reports and graphs to see how your AWS costs fluctuate and identify areas where you can optimize your cloud usage and reduce costs.
  • AWS Budgets: This tool allows you to set up budgets for your AWS usage and receive alerts when your usage or costs exceed your defined thresholds. You can use AWS Budgets to track your costs by allocation tags, making it easy to see how much you spend on each project or business unit.
  • AWS Trusted Advisor: AWS Trusted Advisor is another valuable tool for managing AWS costs. It can identify underutilized resources, such as Amazon Elastic Compute Cloud (EC2) instances or Amazon Elastic Block Store (EBS) volumes, and recommend ways to optimize their usage. Trusted Advisor can also help you identify unused or underutilized Amazon Simple Storage Service (S3) buckets and Amazon Relational Database Service (RDS) instances and suggest ways to optimize their usage.

On the whole, native AWS cost optimization tools can help you improve your cost awareness and visibility to make informed decisions about your AWS usage. However, as your organization grows and its AWS workloads become more complex, especially when you reach a certain level of spending across multiple accounts, you may want to consider upgrading to a more robust cost management solution to ensure that your costs don't spiral out of control.

3. Flexera


Flexera is a cloud management platform that offers various cost optimization capabilities, making it a valuable tool for managing private and public cloud platforms, bare metal, and virtual servers. With its unified view of cloud resources, Flexera allows users to easily identify the state of their workloads and automate repetitive tasks across cloud services, using its powerful orchestration engine.

One of the standout features of Flexera is its customizable interface, which allows users to drill down into data and uncover hidden insights. This feature, combined with its single pane of glass for multi-cloud management, makes it easy for users to forecast costs and expenses.

Flexera Cloud Cost Optimization (CCO) offers a powerful tool that helps businesses manage and automate AWS tagging.

With CCO, you can provision your cloud accounts, projects, subscriptions, or resource groups with mandatory tags from the start. You can also segment your cloud resources and costs based on metadata from third-party data sources, such as a CMDB, and get real-time cost visibility for various stakeholders.

But CCO doesn't stop there. It also offers automated remediation of tags and termination of non-compliant resources, as well as reports on any non-compliance issues. This helps ensure that your tagging policy is applied consistently and allocates costs accurately.

In addition to its tagging capabilities, CCO also offers budget alerts, cost optimization recommendations, and detailed cost and usage reports to help you better understand your cloud costs and make more informed decisions about optimizing and allocating them.

Additionally, Flexera is well-suited for building an integrated IT asset management system. It also comes with a cloud cost calculator for free forecasting and scenario modeling to help users better budget and plan across regions, instance types, reserved instances, and more. 

Despite all this, Flexera does have some drawbacks. Some users have reported longer resolution periods for issues that arise, and to top it off, API instability when integrating with multiple third-party tools. 

4. Apptio


Cloudability is a cloud cost management tool that helps customers gain visibility into their cloud spending to optimize it. With support for multi-cloud environments like AWS, GCP, and Azure, Cloudability provides cost savings recommendations, anomaly detection, budgeting, and forecasting to manage cloud budgets effectively. 

Using a traditional approach to cloud cost management, Cloudability is a good platform for tracking mostly high-level metrics like cost center costs rather than the granularity and details of your cloud costs. A concern with Cloudability is its less-than-friendly interface and inability to integrate seamlessly with other third-party tools.

With custom allocation rules and automatic tag application, you can ensure that all of your resources are correctly tagged, and your costs are accurately allocated. Besides that, the platform also provides detailed cost and usage reports that you can use to track and allocate costs to specific teams or departments.

Cloudability's Tag Explorer tool allows you to visually assess how you're using tags, identify untagged resources, and better understand your cloud costs. You can also map related tags into a Cloudability tag or dimension to ensure relevant and logical mapping from the cloud to your business or other logical constructs.

 The platform lags behind when it comes to drilling down into costs for idle and unallocated resources, and lacks visibility into how engineering changes affect these costs.

5. Cloud Checker


Cloudcheckr is a popular cost-monitoring tool for multi-cloud environments. It provides a range of customizable alerts and notification that allows you to maintain a close watch on your AWS costs. 

For example, you can set up alerts to notify you when your costs reach a certain threshold, or when specific resources are underutilized or overused. By doing so, you can take proactive steps to manage your costs and avoid surprises on your monthly AWS bill.

Using CloudCheckr's tag mapping feature, businesses can identify similar tags and merge them, enabling administrators to simplify reporting and track cloud usage by department, environment, or other factors. The platform also lets businesses assign percentages to tag maps to divide charges based on tag values, helping organizations split the costs of a single resource by percentage.

Additionally, Cloudcheckr offers a wealth of educational resources and support to help you get the most out of the tool. The platform also includes detailed documentation, webinars, and a dedicated support team to assist you with any questions or issues you may have.

6. ProsperOne


ProsperOps is a cloud management platform that offers cost optimization capabilities for AWS. It provides a comprehensive view of your AWS resources, allowing you to monitor and manage your costs efficiently. You can streamline and enable effective cloud cost allocation using its intelligent Showback feature.

One of the critical features of ProsperOps is its intelligent cost optimization engine, which automatically identifies and recommends actions to help you reduce your AWS costs. It includes identifying and recommending reserved instances and Savings Plans, pinpointing underutilized resources, and suggesting ways to optimize their usage.

But ProsperOps isn't just about saving money - it also offers a number of other benefits. Its integration with other tools and services makes it easy to manage your AWS costs within your existing workflow. Whether you use Terraform, Ansible, Datadog, or New Relic, ProsperOps can be easily integrated, allowing you to track and optimize your AWS costs in real time.

However, one potential downside of ProsperOps is that it's only focused on cost optimization for AWS, so if you use other cloud providers or want a more comprehensive cloud management platform, ProsperOps may not be the best fit for you. On top of that, ProsperOps requires a certain level of technical expertise to set up and use effectively, so it may not be the best choice for users with limited technical experience.

7. Spot by Netapp

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Spot by NetApp is another cloud cost management tool that automates cloud cost optimization based on machine learning and automation. Geared typically towards large enterprises, it's designed to help engineering and finance teams optimize their cloud costs and gain visibility into their spending across multiple cloud platforms, including AWS, GCP, and Azure.

An important feature of Spot is automation. It helps to optimize cloud infrastructure, including container setups, and provides easy-to-implement optimization recommendations. Teams can save time and effort by automating tedious tasks and allowing them to focus on more important work.

Another advantage is Spot's ability to offer forecasted spend based on historical usage data, which can help teams plan and budget for their cloud expenses. However, in terms of replacing AWS cost allocation tags, Spot requires good tag management to get granular visibility into cloud costs, and costs are only visible on a daily basis. 

Besides, Spot's manual configurations can be time-consuming, and the API may need to be regularly updated, making pipeline integration more challenging.

Leave Your Cost Allocation Challenges Behind You With Finout

AWS cost allocation tags are essential for any organization that uses AWS to manage its cloud infrastructure. However, they're not easy to manage or implement manually, making it quite challenging to get accurate cloud cost reports. 

Finout is a standout cost management platform to consider. It offers a range of features, including multi-cloud cost optimization and visibility, customizable dashboard and notifications, historical reports, and comprehensive cloud cost optimization.

Book a demo with one of our specialists to get an overview of the platform.

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