Log in
4 Ways to Get Cloud Cost Anomaly Detection Right

4 Ways to Get Cloud Cost Anomaly Detection Right

Table of Contents

  1. Define a baseline
  2. Use native tools to detect changes in cloud spend
  3. Set alerts to get notified about cost spikes
  4. Use a third-party tool

Accidental overspending in the cloud is one of the biggest issues faced by FinOps teams. Something as small as cache misconfiguration can throw off your cloud spend and cause thousands of dollars in surprise costs. Just look at what happened to the "Have I Been Pwned" owner in early 2022

To keep sticker shock at bay, organizations across the world are experimenting with cost anomaly detection. The idea is to quickly identify unusual and unexpected changes in cloud cost patterns. Do this early enough and you'll be take timely corrective measures to prevent any adverse impact on your monthly cloud bill.

Here are the top four tips for detecting cloud cost anomalies in your infrastructure. 

1. Define a baseline

The first step in detecting cloud cost anomalies is to establish a baseline of your expected costs. Simply look at your average cloud spend to get a reference point for what is considered a 'normal' representation of your typical usage and cost patterns. 

For example, if you know that your AWS monthly costs range between $900 and $1,100, you'll have the context you need to determine whether changes in cloud costs are abnormal or the result of normal fluctuations.

 2. Use native tools to detect changes in cloud spend

Most cloud providers, including Amazon, Microsoft, and Google offer their own cost anomaly detection tools for free. They run machine learning models under the hood to project your daily usage and are able to distinguish between gradual cost changes and one-off spikes.

For example, in Azure Cost Management and Billing, you can view any cost anomalies in the Cost analysis tab. If you have a cost anomaly, it will show in the resource insights.

Spotting anomalies in Azure Source

You can then drill down into the anomaly details to see how the cost per resource has changed over time.

Analyzing usage patterns per resource (source)

3. Set alerts to get notified about cost spikes

Most native tools also let you set up a dollar threshold and get notified when your usage exceeds it. In Azure, you can add anomaly alerts to email you about changes in resource group count and cost. 

Setting up anomaly alerts via email (source

If you're running your app on AWS, you can set up the monitor and alert preferences in via AWS Cost Explorer API, or directly in the Cost Management Console.

When an anomaly is detected, you'll get notified either via email or directly in a Slack channel.  

Setting up cost alerts in AWS (source)

Once you're aware of an unusual cost increase, you can work on ways of resolving the root cause of the spike, whether that's shutting down resources that are no longer in use or optimizing resources that are costing too much.

4. Use a third-party tool

Relying on native tools for cost anomaly detection may not cut it if your infrastructure is powered by multiple cloud providers. A third-party tool like Finout can help you automatically detect cloud cost anomalies across all cloud providers, including AWS, GCP, Datadog, Databricks, Kubernetes, and others. 

And instead of detecting cost per cloud service or resource, Finout shows you how much you're spending per team, feature, and even customer. Once one of these costs goes over your set threshold, you are immediately notified on Slack or email, allowing you to take action quickly.

Final thoughts

The cloud promises substantial cost savings compared to on-premises costs. But you'll still need to proactively plan, govern, and monitor your cloud spending to avoid cost surprises. 

Establishing a baseline for your cloud spending and setting up alerts for when it's exceeded, either via native or third-party tools, can help you keep cloud costs in check. 

Give it a try by booking a demo with our specialist today.

Learn More

Snowflake Cost Optimization Techniques: Part Two

Databricks Cost Optimization

How To Optimize Your Snowflake Costs: Part One

Best practices for Kubernetes cost management

Azure Kubernetes Service Pricing: Cost Optimization and Management

Podcast - The secret to healthy business growth

How to reduce Azure storage costs

Learn how Finout integrates with Datadog

How to evaluate FinOps tools: 6 things to consider

8 GCP cost reduction tips

The best Azure cost management tools - 2023

How to track and reduce your Azure spending

Logs Cost Optimization

How to reduce Datadog cost

How to reduce EKS costs

AWS Cost Allocation Tags: Implementation, Challenges, and Alternatives

A comprehensive guide to Kubernetes cost management tools for 2023

How to monitor Snowflake usage and spend with Datadog

A Comprehensive Guide to Choosing the Right FinOps Tools in 2023

Recommendations for AWS RDS Cost Reduction

How FinOps helps businesses enjoy the economic advantages of the cloud

Rightsizing tips and recommendations for getting your cloud costs down

7 ways to reduce your Snowflake costs

Google Cloud Platform (GCP) Services and Pricing

7 ways to reduce AWS S3 spend

FinOps Essentials: Understanding cloud usage optimization

7 Ways to Improve Your Cloud ROI

AWS Recommendations for EC2 Cost Reduction

How FinOps can help cyber security vendors rein in cloud costs

Cloud Economics: Cost of Cloud Services Explained

Finout Integrates with all your usage-based tools