AWS cost management, cost analysis, and cost optimization requires some introductory understanding of a few key terminologies, which we will briefly cover below.
The usage cost is presented to you on the same day as it is charged by AWS. It’s also referred to as the cash basis of accounting in financial terms. Unblended AWS costs are useful to isolate the one-time charges and the recurring charges. This is the most common, and the default option provided by AWS for financial planning.
Net unblended costs
The AWS cost is calculated after applying discounts on the unblended costs.
The one-time AWS costs are distributed evenly to the duration of their validity. Amortized costs help audit the charges on an accrual basis and are helpful to see the overall cost patterns.
Net amortized costs
The AWS cost is calculated after applying discounts on the amortized costs.
The AWS cost is calculated by averaging the rate applied to a service across all of your AWS accounts under the same organization. For example:
- AWS considers all member accounts as a single account to calculate cost for services that support Tiered pricing. As the consumption of service is distributed across multiple accounts, blending the cost to a single rate gives a clear view.
- Average cost of instances according to on-demand, reserved, and savings plan cost across all member accounts of an organization is calculated as the blended rate for the service. This is used to calculate the blended costs for all instances.
For additional information on AWS cost management, visit the following link:
- Understanding your AWS Cost Datasets: A Cheat Sheet. (n.d.). Amazon Web Services, Inc. https://aws.amazon.com/blogs/aws-cloud-financial-management/understanding-your-aws-cost-datasets-a-cheat-sheet/