Reconcile AWS Costs within CloudHealth: Amortization Metrics Are Not Matching AWS Cost Explorer

Products

• CloudHealth

Issue/Introduction

 

Confirm Total Overall Costs Line Up

This is the most important step in the process as it not only confirms that all cost data is being collected correctly but that information provides confidences in the metrics.  This should be a quick process by following these steps:

• Request that the customer provides a grand total of all costs for the time period in question (generally it's easier to limit scope to a specific month if the customer is stating an issue that spans many)
• Reference that same data set within CloudHealth with all filters and categorizations removed

The totals should line up.  This is good news because it shows that all cost data is captured and the conversation is no longer about missing or added cost, but categorization.  If total cost is not lining up, be sure to check your billing account configuration status and submit a ticket to Technical Support if necessary.

 

 

Understand How Amortization Is Calculated

Once totals are confirmed to match up the next step is to understand the data used when comparing to CloudHealth amortization metrics.  Before looking at the data, it's important to understand the different ways that amortization can be calculated.

 

Amortization Calculation Methods

The main point to keep in mind while you work on amortization metrics is that there is two different ways to calculate the number:

• By Purchase:  This is a simple calculation that takes the total prepay amount, divides it by the timeframe of the reservation, then applies those equal cost chunks to each month, for instance.  An example is say $1200 is spent on 1-year reservations.  The monthly amortized amount would be $1200 divided by 12 months, or $100 amortized cost per month.  Many companies refer to amortization metrics this way.

• By Usage:  This is a much more complex calculation that takes into account where reservation coverage took place as well as accounting for the cost of any reservation that were not fully utilized and applying those costs appropriately.  The benefit of this method of amortization calculation is it can be considered more accurate since it takes into account "no upfront" reservation coverage as well.  CloudHealth amortization metrics by default utilize this method of calculation which is generally where a lot of the confusion in comparing amortization metrics comes in.

Be sure to confirm the amortization data type in the comparison as manually created "By Purchase" spreadsheets will not match amortization values "By Usage".  

Amortization Timeframes

This pertains to the duration of the reservations that were purchased.  AWS provides two timeframes for reservations:

• 1-Year 
• 3-Year

CloudHealth will take into account all active reservations regardless of whether they are 1 or 3-year and amortize appropriately based on where the reservation coverage took place.

 

Resolution

Review the Amortization Comparison

The next step is to obtain a detailed breakdown of the amortization numbers regarding the comparison to CloudHealth.  

 

Obtain All Comparison Information

Gather all of the data used in the comparison (i.e. Cost Explorer reporting, spreadsheets, etc). 

NOTE Manually calculated amortization spreadsheets will nearly always be calculated "By Purchase".  Besides the overall total value, it will never match up with the "By Usage" amortization metrics shown in CloudHealth.

 

Items to look out for:

• Be sure that you note all filter and categorization details provided - This is important to try and build a true apples to apples comparison but due to potentially different calculation methods, this may not match up to CloudHealth even with matching filters and categorization.
• Note the timeframe that the calculations cover - This is important if a report is using "By Purchase" as that may only be amortizing purchases made in the past 12 months whereas CloudHealth will reflect active 3-year 36 month amortization metrics as well.

In many cases, the difference between "By Purchase" and "By Usage" calculations clears up many amortization related questions.

 

Line Up Total Amortization Metrics Without Any Additional Manipulation

There is a way to line up overall amortization metrics, regardless of calculation type, by looking at the overall monthly totals without any categorization.  The way to view this number in CloudHealth is to navigate to the REPORTS > COST > AMORTIZATION and remove the category type:

The cost that appears under "Amortized Cost" will be the overall total.  This metric can be used to compare the overall total for accounts or specific consolidated billing accounts.  These totals still may not match so it's important to note the months included in the comparison calculations.  

NOTE CloudHealth is amortizing cost for ALL active reservations which includes any 3-year reservations made in the past.  Many comparisons may only be doing a 12-month amortization calculation which will most likely not match up with CloudHealth.

 

It's possible to illustrate that 3-year reservations are still active and accounted for in CloudHealth by doing the following:

• Navigating to ASSETS > AWS > EC2> RESERVATIONS (this assumes that the customer has reservations in EC2 which is usually the case)
• Pulling in the "Purchase Date" column from the "Edit Columns" option at the top of the screen
• Filtering to "Status = Active" in the Smart Filters then click "Run Report"
• Click the "Purchase Date" column header to so that the information is sorted oldest to newest

By reviewing the "Purchase Date" column and comparing it to the "Time to Expire" column you can see which 3-year reservations are still active.

With all of the above information and noting that raw un-amortized totals all match up, the resolution to these issues usually boils down to explaining the difference between "By Purchase" and "By Usage" amortization calculations.