Documentation and Best Practices

Learn how to use Cloudability and get the most out of our cloud cost management tool.

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Which Cost Metric Should I Use?

There are multiple ways Cloudability can display your cost data. Each cost metric displays data calculated in different ways and is meant for specific use cases. Choosing the right metric is essential to understanding your cloud spending:

  • Cost (Total)
  • Cost (Amortized)
  • Cost (Total Blended)

 

Cost (Total) is the most commonly used metric for your cloud spend analysis. It is reported on a cashflow-based accounting method, and for AWS is the unblended cost. If you're looking to allocate spending to resources, tags, or accounts the unblended rate used by this metric will give you the best results including adjustments for where AWS RIs were applied.

 

Cost (Amortized) leverages the Reserved Instance Amortization feature, to give users the option to monitor the upfront costs of RI purchases using an accrual-based accounting method. This method spreads the sign up fees of an RI on an hourly basis across the hours of the reservation term. 

Here is an example of amortizing a $12,000 upfront RI purchase: 

Month Cash-based Cost Accrual-based Cost
June 2016 $12,000 $1,000*
July 2016 $0 $1,000
August 2016 $0 $1,000
September 2016 $0 $1,000
October 2016 $0 $1,000
November 2016 $0 $1,000
December 2016 $0 $1,000
January 2017 $0 $1,000
February 2017 $0 $1,000
March 2017 $0 $1,000
April 2017 $0 $1,000
May 2017 $0 $1,000

*Note: this this amortization example is simplified to make it easier to understand. Cloudability actually amortizes on an hourly basis, where a 1-year reservation equates to 8,760 reserved hours. So, a 30-day month like June actually amortizes out to $986, and a 31-day month like July is $1,019. You can read more about the details of the amortization calculation in this KB article.

 

Cost (Total Blended) uses an AWS-specific blended rate and is on a cash-basis; as opposed to accrual-basis like the Cost (Amortized) metric. The two primary use cases for this metric are: to reconcile to an AWS invoice or b) to see total amount of money you've committed to RIs in a given month. Outside of these two specific use cases we recommend that you use Cost (Total) or Cost (Amortized) metrics.

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