the entire term, the balance of that discount can be applied
to another account. We recommend ensuring that reserva-
tion sharing is enabled across all your accounts, so that any
excess reservations in one account do not go to waste.
Your account structure can also help your organization rec-
ognize volume discounts offered by cloud providers. Con-
sider S3 on AWS, which has a tiered pricing structure that
gets cheaper per unit the more you consume. To determine
your monthly bill, AWS will aggregate all of the consump-
tion of S3 under an account, determine what level of volume
discount is applicable and then apply that discount propor-
tionally across subscriptions within the account. If you have
numerous independent accounts, they may never consume
enough S3 to earn these volume discounts, so we recom-
mend making sure that all your accounts tie back to one
master billing account.
Controlling Costs Moving Forward:
Policies and Controls
Getting the expected cost reductions and return on invest-
ment from your cloud program require more than one-time
corrections. Financial control policies which reflect the new
world of cloud need to
replace old static infrastruc-
ture behaviors. Many of the
common patterns for con-
trolling costs in the cloud are
predicated upon having a
robust and actively enforced
naming and tagging stan-
dard. In a world where infra-
structure can come and go
by the minute, it is imperative
to take the time to develop a
comprehensive
tagging
schema, and to use tools to
auto-enforce and monitor adherence, which subsequently
will enable all these downstream controls, and help with the
success of your cloud program.
This increased level of cost transparency helps inform
teams that may have had no idea of how much they were
consuming, and can directly incent them to be more cost
conscious with their provisioning, deprovisioning and con-
sumption habits. In fact, some companies have found suc-
cess by gamifying cost reduction through friendly competi-
tions among development teams driving to a better bottom
line. While not all cloud services can be tagged, our best
practice is to implement showback to the application teams
for all services which can be tagged, before considering if
chargeback is right for your organization.
While showback and chargeback could also be imple-
mented on-premises to promote the deprovisioning of
resources, that hardware will still exist in the data center
and the cost must still be carried by the enterprise. The abil-
ity to scale the number (and size) of environments down
(and up) and immediately recognize cost benefits, is a new
opportunity uniquely enabled by the cloud, and you should
take advantage of it.
Showback and chargeback are great ways to provide feed-
back and course correct month over month, but there are
also ways via budgeting and alerting to be more proactive
about controlling consump-
tion before the bill is received
at month’s end. Cloud provid-
ers have tools and systems in
place to enable setting soft
quotas for development
teams that, when reached,
will trigger alarms and send
notifications to identified
stakeholders. Services such
as AWS Budgets and Azure
Consumption’s Budget API
will utilize the tags on your
resources to enable you to
set alerts like, “Let me know if my team gets within 50% of
our budget within the first 10 days of the month.” These
types of guardrails were not necessary in an on-premises
world where the only resources you had to use were those
in your data center. But in the cloud, they represent a new
behavior that your organization needs to adopt in order to
keep your costs in check.
Some companies have
found success
by gamifying cost reduc-
tion through friendly
competitions among
development teams.
With proper naming and tagging, you will be able to pin-
point which users or groups consumed which services
(showback), and thereby have the option to charge them
their portion of the cloud bill each month (chargeback).
38 | THE DOPPLER |
SUMMER 2019