By managing the cloud budget, the enterprise can plan and budget for cloud costs before migrating to the cloud, monitor and alert the budget consumption during the migration process, and analyze the budget and actual consumption afterwards. This closed-loop cost management of cloud costs improves the level of fine-grained cost management in the cloud. Accurately allocating cloud costs to business units is a key part of cloud cost management. Cost allocation is necessary in order to implement cost responsibility. Enterprises should regularly monitor and analyze the costs allocated to the responsible teams, track the reasons for any overspending, and enable the responsible teams to actively and continuously optimize costs.
Cloud Budgets Management
The Budget Management Tool can be used to manage three types of budgets: "Expense Budgets," "On-Demand-Budgets," and "Usage Rate and Coverage Rate Budgets." Enterprises can manage the expense budget by setting planned consumption amounts for expenses based on the financial unit, account, product, and other dimensions for periods of one year, one quarter, or one month. Creating a budget based on resource usage is also an effective way to manage the budget. You can plan the amount of resources based on business needs and calculate the budget amount accordingly. You can then monitor your expenses based on the budget amount. For enterprises that have implemented savings plans and reserved instance coupons, budget management can also be done based on usage rate and coverage rate. For example, you can set usage rate and coverage rate budgets for savings plans and reserved instance coupons based on dimensions such as account, region, and specification, for periods of one year, one quarter, or one month, along with corresponding alert thresholds. When the usage rate or coverage rate reaches the set alert threshold, an alert notification will be sent. These different budget management methods can be used together.
Allocation for Cloud Costs
Cost Allocation through Amortization
The purchase and usage of cloud products may not occur at the same time. For example, if an ECS instance is pre-paid for one year, it can be used for 12 months. Similarly, a prepaid resource package is only consumed when it is actually deducted. Therefore, costs should be allocated to the actual usage time period based on the "amortization based on actual consumption" principle in order to accurately reflect the cost of cloud products. This is the biggest difference between "expense" and "cost." The Cost Amortization provides cost allocation capabilities, allowing costs generated in the cloud (including prepaid and postpaid costs) to be allocated to natural months according to specified amortization rules. This enables quick understanding of cost allocation in the cloud.
Cost Allocation through Financial Unit
Cloud products that are purchased may be used by different departments, projects, or business lines. To meet the requirements of fine-grained cost management, costs should be allocated to the actual users based on the principle of "who uses, who pays." The Cost Center feature allows costs incurred by corresponding cloud resource instances to be identified with a custom "financial unit" and establishes a custom cost hierarchy in a directory tree structure. Three allocation methods can be used to allocate purchased resource instances to the corresponding financial units. The automatic allocation method supports allocating resource instances to designated financial units based on rules. The manual allocation method supports manually allocating resource instances to designated financial units. The shared allocation method allows the cost that needs to be shared to be allocated to other financial units based on custom rules.
Cost Allocation through Tags
Cost allocation in the cloud primarily involves cost allocation for expenses incurred by cloud resources. It is recommended to use tags for resource tagging, combined with Alibaba Cloud's provided capability of cost center to achieve cost allocation. The key steps to implement cost allocation with tags are as follows:
Design a tag system: You can use pre-defined tags to unify the resource tagging system, including cost tags used for cost allocation. The cost tag values can be set to applications, projects, departments, business lines, etc., according to actual requirements.
Design a financial unit: Design a financial unit directory tree from the perspective of cost attribution, identifying projects, departments, business lines, etc., where the cost belongs.
Tag the resources with cost tags: Cost tags should cover all resource instances. It is recommended to tag resources at the time of creation, and tags can also be retroactively applied to existing resources.
Set automatic allocation rules: In the financial unit, set automatic allocation rules based on tags to automatically assign the resource instance bills to the financial unit. The allocation rules should cover all resource instances to improve cost allocation efficiency.
Audit cost tags: Use tag policies to automatically audit resource cost tags, discover instances without cost tags or instances with incorrect tag values, and promptly fix them to ensure the cost tag data of resource instances is accurate and comprehensive.
Cost Allocation of Common Expenses through Financial Units
For expenses that need to be shared among multiple businesses, costs can be first assigned to a shared financial unit, and then split to target business financial units according to customized split rules using the shared allocation feature of financial units. The custom split ratio should be set based on the actual situation of the enterprise. For example, if you need to allocate the costs of deploying an ECS cluster for a public service among different business users, you can define a split ratio based on the number of users or the number of system calls, etc.
Cost Allocation for Complex Scenarios through a Multi-Account Structure
For multi-organization and enterprise group companies, LandingZone can be used to plan the cloud multi-account structure and perform unified financial and cost management within the finance master account. After mapping the organizational structure to the account structure, costs can be separated at the account level, complemented by financial unit allocation rules and shared allocation rules to complete cost allocation. The financial unit feature supports custom cost hierarchy structures, allowing enterprises to flexibly summarize and view billing costs for corresponding resource instances based on multiple dimensions, thereby improving cost allocation efficiency.