Top 12 AWS Cost Optimization Tools and how to Choose

What Are AWS Cost Optimization Tools? 

 

AWS cost optimization tools help users manage and reduce their AWS spending. They provide insights into where money is spent within AWS environments, identifying areas where costs can be cut without sacrificing performance or availability. They analyze usage patterns, recommend resource adjustments, and offer strategies for reserving instances or using spot instances.

These tools enable organizations to make informed decisions about their cloud resources, ensuring they only pay for what they need. Through reporting and analytics, they help track spending trends over time, send budget alerts, and forecast future expenses. 

• Native AWS tools: AWS provides built-in tools to help users manage and optimize their cloud spending. Examples include AWS Cost Explorer, AWS Budgets, and AWS Cost Anomaly Detection.
• Third-party tools: These external solutions offer additional or enhanced cost optimization features beyond native AWS tools. These tools often support multicloud environments and provide advanced analytics, automation, and reporting capabilities. BTW, we’re one of these tools.

In this article:

• Why Should You Optimize Your AWS Costs?
• Key Features of AWS Cost Optimization Tools
• Native AWS AWS Cost Optimization Tools 
• Third-Party AWS Cost Optimization Solutions
• How to Choose the Right Cloud Cost Optimization Tool for Your Organization?

Why Should You Optimize Your AWS Costs? 

 

Optimizing AWS costs can provide the following benefits: 

• Maximize ROI: Organizations ensure they get the most out of their cloud investments. Reducing unnecessary expenses improves the return on investment (ROI).
• Improved efficiency: More efficient resource use means that companies can achieve the same performance and capacity at a lower cost, allowing them to allocate savings to other business priorities.
• Budget management: Controlling cloud spending helps organizations stay within their budget. This is important for financial planning and avoiding unexpected costs.
• Competitive advantage: Lower operational costs allow companies to offer more competitive service pricing or reinvest savings into innovation and growth.
• Scalability: Cost optimization ensures that an organization can sustainably scale its AWS usage without experiencing exponential cost increases as it scales. This is particularly important for organizations expecting rapid growth or fluctuating demand.
• Environmental impact: It can reduce an organization’s environmental footprint by minimizing wasted resources and ensuring more efficient energy use.
• Risk mitigation: Identifying and addressing cost anomalies early can prevent financial risks associated with unexpected cloud bills, which could disrupt operations or strain resources.  

Key Features of AWS Cost Optimization Tools

 

Detailed Usage Analytics

AWS cost optimization tools provide comprehensive analytics that breaks down resource usage across various AWS services. These tools offer granular visibility into how and where resources are utilized, enabling users to identify inefficiencies and areas for potential savings. Detailed usage reports can highlight underutilized resources, such as idle instances or over-provisioned storage, which can be right-sized or terminated to reduce costs. 

Organizations can make data-driven decisions to optimize their AWS environments more effectively by understanding usage patterns. Additionally, these tools provide visualizations such as graphs and dashboards, making it easier to interpret data and identify trends over time. This level of detail ensures that every dollar spent on AWS is accounted for and optimized.

Cost Forecasting

Cost forecasting features in AWS cost optimization tools help organizations predict future spending based on current and historical usage data. These tools use advanced algorithms and machine learning models to project costs, allowing businesses to anticipate budget needs and avoid unexpected expenses. 

Accurate cost forecasts enable better financial planning and resource allocation, ensuring that cloud expenditures align with business goals. Additionally, these forecasts can be adjusted for different scenarios, such as changes in usage patterns, pricing models, or the introduction of new services, providing flexibility and preparedness for varying business demands.

Reserved Instance Recommendations

AWS cost optimization tools can recommend the purchase of Reserved Instances (RIs) to reduce costs. By analyzing usage patterns, these tools identify opportunities where committing to RIs would be more cost-effective compared to on-demand pricing. They provide recommendations on the type, quantity, and term length of RIs that best match an organization’s usage profile. 

Implementing these recommendations can lead to significant savings, as RIs often offer substantial discounts over on-demand instances. Furthermore, these tools can continuously monitor usage and suggest modifications to RI purchases, such as instance exchanges or modifications, to adapt to changing needs.

Automated Alerts and Budgeting Tools

Automated alerts and budgeting tools help organizations stay on top of their cloud spending by providing real-time notifications and budget tracking. Users can set custom budget thresholds and receive alerts when spending approaches or exceeds these limits. This proactive approach allows for immediate action to prevent overspending. 

Budgeting tools also offer detailed tracking of expenditures against predefined budgets, ensuring that financial targets are met. These features enhance financial control and transparency, enabling organizations to maintain their cloud costs within acceptable boundaries and avoid unexpected financial surprises. The tools often integrate with other financial management systems, allowing for a seamless flow of information and a holistic view of organizational spending.

Native AWS AWS Cost Optimization Tools 

 

The following tools are offered free by the AWS platform but have limited capabilities and can be used only within the AWS ecosystem.

1. AWS Cost Explorer 

Cost Explorer is an analytics tool Amazon Web Services provides to help users understand and manage their AWS spending. It offers a detailed view of cost and usage patterns, which can be used to identify trends, pinpoint cost drivers, and uncover opportunities for cost reduction. 

Cost Explorer simplifies the analysis of AWS expenses over time, breaking down costs by service, geographic location, and usage type. Its visualization capabilities allow users to create custom reports and forecasts to predict future spending. It can recommend optimizations such as reserved instances based on past usage data. 

Related content: Read our guide about another AWS cost visualization solution, AWS CUDOS.

2. AWS Cost Anomaly Detection 

Cost Anomaly Detection monitors patterns in an organization’s AWS spending and automatically identifies unusual or unexpected increases in costs. It uses machine learning models to pinpoint anomalies in spending data, alerting teams to issues before they escalate. This allows organizations to quickly address unexpected charges, keeping their cloud spend under control

The service provides insights into the nature of the detected anomalies, including the services and accounts involved. It also offers actionable recommendations for investigating and resolving these issues, helping users understand the root cause of unexpected cost spikes.  

3. AWS Trusted Advisor

Trusted Advisor acts as a cloud consultant, offering real-time guidance to optimize AWS deployments. It assesses a user’s environment against best practices in five categories: cost optimization, performance, security, fault tolerance, and service limits. It provides actionable insights with detailed recommendations on how to address each identified issue. 

The tool identifies unused or underutilized resources, recommends optimizations, and highlights opportunities to reduce costs by changing service configurations. Users can prioritize their actions based on the potential impact and ease of implementation.  

4. AWS Budgets 

AWS Budgets is a tool that helps users control their AWS spending, allowing them to set custom budget thresholds for their cloud expenses. It enables the creation of budgets based on various parameters, including costs, usage, and even reserved instance or savings plan utilization rates. Organizations can monitor their financial performance against operational goals in real time. 

The tool provides automatic alerts via email or Amazon Simple Notification Service (SNS) when actual or forecasted spending exceeds the predefined thresholds. These notifications allow users to take immediate action, such as adjusting resource consumption or revising budgetary constraints.  

5. AWS Computer Optimizer 

Compute Optimizer is a service that helps users optimize their AWS resources for compute performance and cost. It analyzes usage patterns and configurations to provide recommendations on how to adjust resources for optimal efficiency. This includes suggestions on instance types, sizes, and Amazon EC2 Auto Scaling configurations. 

Using machine learning algorithms, Compute Optimizer identifies the best resource configurations for workloads. It supports various AWS resources, including EC2 instances, EBS volumes, Lambda functions, and Auto Scaling groups. For EC2 instances, it can be recommended to change to a different instance family or size to achieve similar performance at a lower cost.  

Why Native AWS Tools Are Not Enough

While native AWS tools like Cost Explorer, Budgets, and Trusted Advisor offer valuable insights, they often fall short for organizations with more complex needs or those managing multi-cloud environments. These tools are designed primarily for AWS, limiting their ability to provide a comprehensive view of cloud costs across different platforms. They also lack advanced capabilities like automated cost allocation, deeper customization, and robust anomaly detection that third-party solutions offer.

Additionally, native AWS tools may require significant manual effort to manage and interpret data, which can be time-consuming and prone to errors. They often provide basic cost-saving recommendations but do not automate the optimization process to the extent that third-party tools do. For organizations seeking to scale their cloud usage efficiently or manage large, complex environments, third-party solutions provide the automation, integration, and advanced analytics needed to truly optimize cloud spending.

Third-Party AWS Cost Optimization Solutions

 

6. Anodot 

Anodot provides AWS Usage Monitoring integration for clear visibility into cloud expenses, helping MSPs and Enterprises track, analyze, and optimize AWS usage in real time. The platform prevents unexpected costs and boosts efficiency with advanced analytics and anomaly detection. Tailored for MSPs and enterprises, it delivers instant insights and cost management for different cloud services.

Key features:

• White label capabilities: MSPs can offer their customers a branded reporting portal that includes pricing manipulations, billing rules, and credit management.
• 5-click integration: Simplifies the setup process, allowing quick deployment and minimizing the time and effort required to start managing cloud costs.
• Kubernetes governance: Offers detailed insights into Kubernetes costs, helping Enterprises manage and optimize resource usage effectively across multiple environments.
• Enhanced visibility: Provides comprehensive insights into cloud spending, crucial for aligning financial and operational goals and improving cost management strategies.
• Anomaly detection: Monitors cloud costs in real-time, providing early alerts on irregular spending patterns to prevent budget overruns and maintain smooth operations.

Get Anodot on the AWS Marketplace and save up to 40% off your yearly cloud expenses.

7. nOps 

nOps aims to simplify AWS cost allocation and optimization. It provides insights into AWS spending, identifying misconfigurations and inefficiencies that lead to unnecessary costs. It automates the process of allocating cloud expenses across various teams and business units, enabling accurate chargebacks and showbacks.

Key features:

• Real-time AWS cost allocation: Continuously analyzes AWS billing data, enabling the allocation of costs in real time. This feature addresses the challenge of tag misconfiguration by automatically correcting errors.
• Dynamic allocation rules: Users can create custom rules for allocating costs based on dimensions such as region, tags, operations, accounts, and usage types. 
• Shared costs distribution: Helps distribute shared expenses like bandwidth or support by allocating these costs across business units or teams based. It uses criteria such as percentage of spend or custom percentages.
• Untagged resource management: Handles untagged or mistagged resources by providing tools to identify these assets and allocate their costs appropriately. 

8. Cloudability

Cloudability helps optimize cloud costs by offering visibility and control over cloud spending. It enables IT, finance, and DevOps teams to collaborate, ensuring resources are utilized efficiently while aligning costs with business value.

Key features:

• Cloud spend allocation: Accounts for every aspect of the cloud spend, including containers and support charges. This allows for complete chargeback of cloud costs.
• Cloud cost optimization: Offers rightsizing recommendations across major cloud services, helping organizations reallocate savings towards future investments or innovation efforts.
• Financial decision-making: Allows teams to take ownership of their cloud spend by correlating expenses with business value. This enables strategic decision-making based on clear financial insights.
• Team-specific views: Different stakeholders get tailored views that match their roles—IT Finance establishes budgets and tracks spending; Business Leaders correlate spend with business outcomes; DevOps acts on cost anomalies and rightsizing opportunities.

9. Densify 

Densify is a cloud resource optimization solution that uses machine learning and deep analytics to automate the process of identifying suitable instance types and resource specifications for applications.

Key features:

• Optimization directives: Provides clear steps for reducing costs while preserving cloud performance. 
• Automated instance type selection: By analyzing workload patterns, the most efficient size and family for compute and database instances are determined. 
• Auto Scaling group optimization: Optimizes Auto Scaling groups by analyzing utilization, performing simulations, and determining optimal configurations. It ensures that scaling parameters are set correctly, reducing resource constraints.
• Cloud infrastructure visibility: Offers a comprehensive view across all cloud environments, enabling organizations to assess efficiency, risks, and savings potential. 

CloudHealth by VMware helps manage and optimize AWS costs and resources across an organization’s cloud environment. It allows users to improve financial management, enforce cloud governance, and conduct migration assessments. It simplifies operational tasks and provides insights into cost and usage trends to support informed decisions on cloud spending.

Key features:

• Financial management: Provides visibility into AWS spending with detailed breakdowns of major expenses. This enables trend analysis, anomaly monitoring, and performance data tracking to optimize financial management practices.
• Cloud governance: Helps maintain control over the cloud environment with policies that ensure tagging hygiene, configuration streamlining, and automation of daily operational tasks. 
• Migration assessment: Assesses the total cost of ownership (TCO) for migrating to AWS from on-premises environments. 
• AWS competency program specializations: CloudHealth has achieved several specializations, validating its capability to deliver solutions in these AWS domains.

11. CloudCheckr 

Key features:

• Cost optimization: Offers hundreds of best practice checks and assesses the environment continuously to identify opportunities for reducing expenses.
• Security optimization: Monitors cloud infrastructure configurations to mitigate risks that could lead to costly breaches. It includes security best practice configuration checks with options for automatic fixes or escalation for remediation.
• Compliance monitoring: Monitors cloud infrastructure against 36 standards including HIPAA, PCI DSS, CIS, NIST, and SOC2, providing audit-ready reports.
• Resource utilization: Offers visibility into provisioned cloud resources across an organization, tracking changes made to the infrastructure and identifying opportunities for improving utilization, like CPU optimization through right-sizing recommendations. 

12. Flexera 

Flexera aids in optimizing cloud costs across various platforms, including AWS, Azure, and Google Cloud. It enables organizations to gain visibility into their cloud spend and manage it through a set of tools that support FinOps processes. 

Key features:

• Cloud cost management: Provides a detailed analysis of cloud spending across major service providers. This includes the ability to track costs in real time, identify wasteful expenditures, and receive recommendations for optimization.
• Cloud governance capabilities: Organizations can enforce policies that ensure cost-efficient resource usage. This includes the creation of automated workflows to manage cloud expenses and maintain compliance with internal standards.
• Cloud migration planning and modernization: Aids in planning migrations by evaluating current on-premises workloads and predicting the cost implications of moving them to the cloud. It also offers insights into modernizing applications for optimal cloud performance.
• Visibility across multiple clouds: Flexera’s dashboard consolidates data from different cloud platforms, offering a unified view of an organization’s cloud landscape. 

How to Choose the Right Cloud Cost Optimization Tool for Your Organization? 

 

When evaluating cloud cost optimization tools for AWS, it’s important to consider the following:

• Scalability: Ensure the tool can handle current and future cloud usage. It should scale with the organization’s growth without compromising performance or accuracy.
• Integration: Check if the tool integrates with existing systems and workflows. Compatibility with the cloud infrastructure and other tools and services used is crucial for smooth operation.
• Ease of use: A user-friendly interface and straightforward setup process can save time and reduce your team’s learning curve. Look for tools that offer intuitive dashboards and clear reporting.
• Customization: Customizing reports, alerts, and recommendations according to the organization’s needs can enhance the tool’s effectiveness. This includes setting custom budgets, policies, and thresholds.
• Support and documentation: Reliable customer support and comprehensive documentation aid in troubleshooting and maximizing the tool’s potential. Check for available resources such as tutorials, FAQs, and community forums.
• Security and compliance: Ensure the tool meets the organization’s security standards and compliance requirements. It should offer features like data encryption, access controls, and compliance reporting.

Conclusion

 

Optimizing AWS costs is essential for maximizing efficiency and maintaining financial health in a cloud-driven environment. By carefully selecting a cloud cost optimization tool that aligns with your organization’s needs and growth plans, you can better control and manage cloud spending, driving greater value from your cloud investments.

Learn more about Anodot for cloud cost management.