Preventing cloud cost surprises: a guide to cost anomaly detection

At Tailwarden, we're excited to introduce our new cost anomaly detection feature, designed to help you manage cloud expenses more effectively. In today's cloud-driven world, keeping track of costs is essential to avoid unexpected overruns and financial surprises. Effective cost management can significantly impact your organization's bottom line, ensuring that resources are used efficiently and within budget. Our latest feature aims to give you the tools needed to monitor and control cloud spending, providing peace of mind and financial stability.

Importance of cost anomaly detection

Remember the days when you just bought a server, and there were almost no ways your costs could suddenly skyrocket? With cloud providers usually operating on a pay-as-you-go model, today's landscape is quite different. This flexibility is powerful but requires vigilance to avoid unexpected expenses. Cost anomaly detection is crucial for organizations using cloud services because it helps identify unusual spending patterns early. Unchecked cloud costs can lead to budget overruns and resource wastage. Early detection of these anomalies can save significant amounts of money and maintain financial stability.

Consequences of late detection

You might think cost spikes are never huge and couldn't happen to big organizations. Well, let’s prove you wrong with several real examples.

You can listen to Chris Short, a cloud expert who experienced a massive $2,700 bill increase while running a simple static website on AWS. The spike was caused by 30 terabytes of data being downloaded in two days. Despite using billing alarms, the delay in AWS’s billing system meant the issue wasn’t caught in time, highlighting the need for effective cost anomaly detection to prevent such unexpected expenses.

Or if you need more examples, you can also check reddit with thousands of examples on AWS, GCP, Azure of people complaining about an unexpected cloud bill (see this for example).

And it doesn’t only concern niche services - you can have unexpected cost increase with very simple service like s3, as shown here.

Setting up cost anomaly detection

Managing cloud costs can be a daunting task, especially when trying to identify and mitigate anomalies across multiple services. Each cloud provider offers tools to help with this, but setting them up can be complex. Here’s a step-by-step guide for AWS, GCP, and Azure to help you get started.

AWS

1. Enable Cost Explorer: Go to the AWS Management Console and activate Cost Explorer.
2. Set up anomaly detection: In the Cost Management dashboard, navigate to "Anomaly Detection" and create a new alert.
3. Configure alert parameters: Choose the services or accounts to monitor, set threshold values, and specify notification preferences.
4. Review and launch: Review your settings and activate the alert.

GCP

1. Enable billing reports: Access the Google Cloud Console and enable billing reports.
2. Create budget alerts: Go to the "Budgets & alerts" section and set up a new budget.
3. Set thresholds and notifications: Define your budget limits, configure email alerts, and specify the services to monitor.
4. Activate alerts: Save and enable your budget alert.

Azure

1. Enable cost management: Open the Azure portal and navigate to the Cost Management + Billing section.
2. Set up budgets and alerts: Create a new budget in the "Budgets" section, setting your desired thresholds.
3. Configure anomaly alerts: Define alert rules and specify notification channels such as email or SMS.
4. Activate and monitor: Save your settings and start monitoring for anomalies.

Setting up cost anomaly detection in native cloud tools involves multiple steps and ongoing maintenance. These tools have several limitations, including difficulty in setting up alerts for specific resources, lack of cross-cloud provider functionality, challenges in multi-account environments, and limited integration with communication tools like Slack. Despite these challenges, configuring these tools is a crucial step in maintaining financial control and avoiding unexpected expenses in your cloud infrastructure.

Benefits of Tailwarden's cost anomaly detection

So, we have seen that cost anomaly detection is crucial, and not having it can lead to disaster. Setting it up with cloud providers can be hectic. So, what do we do?

Here comes Tailwarden, allowing you to set up policies per service, per resource, on any part of the infrastructure very easily.

Let's see how easy it is with this video.

As you can see, the overall setup is much faster and more straightforward than what you have natively on cloud providers. The bonus? It works across cloud providers and is not limited to one. You don’t have to set up multiple alerts on multiple tools with Tailwarden!

Additionally, receiving an email is not the only option to be notified. You can choose to be notified by email, Slack, or even by webhook. This flexibility allows you to implement your cost anomaly detection with any ticketing tools you use. This reduces multiple alerts on different tools and decreases engineer fatigue.

Conclusion

Proactive cost management is essential for maintaining financial control in cloud infrastructure. Tailwarden's cost anomaly detection simplifies the process, offering more flexibility and integration options than native cloud tools. By using Tailwarden, you can avoid unexpected expenses and ensure efficient use of resources. Try Tailwarden’s cost anomaly detection feature today and take control of your cloud spending.

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