The 3 Pillars of Cloud Cost Observability: Visualization, Control & Management

Your finance team looks at rising cloud bills and finds the numbers are shockingly higher than last month’s. They turn to the DevOps team and ask, “What’s going on? Are we on the brink of a cost overrun?” Suddenly, there’s a scramble to make sense of these mind-boggling numbers. Now, the DevOps team is racing to analyze cloud usage and determine what went wrong.

Cloud computing has revolutionized how modern businesses operate. It provides unparalleled flexibility, scalability, and opportunity for rapid innovation. However, with great power comes great responsibility – or in our case, great costs. Cloud expenses can quickly get out of control, leaving DevOps and FinOps teams scrambling to justify the unexpected surge and to regain control over resource usage and surging cloud costs.

This is where cloud cost observability comes in, providing businesses with a detailed view of their cloud spending. Think of it as an augmented layer of best practices that provides a comprehensive view of all cloud expenses and usage, tied to the different elements of your cloud infrastructure. Cloud cost observability not only allows you to track expenses but also helps you understand the “why” behind every dollar spent. With the right tools and strategies, companies can identify inefficiencies, optimize cloud usage, and, most importantly, make smarter financial decisions.

But here's the challenge: cloud costs can easily become a bloated expense. A report by McKinsey & Company shows that 30% of cloud spending is wasted on unused or underutilized resources. That money could be better spent elsewhere – for growing your business, improving products, or investing in new technologies.

In the end, cloud cost observability is more than just watching costs soar through the roof. It’s about getting detailed insights into every aspect of your cloud infrastructure, implementing controls, and taking action before your expenses go off the rails and you blow through your budgets. 

In this blog, let’s look into the three key pillars of cloud cost observability: Visualization, Control, and Management, and show you how you can incorporate them to keep your cloud expenses in check.

What is Cloud Cost Observability?

Cloud cost observability offers the ability to gain thorough visibility and insights into cloud spending across various cloud providers, services, and environments. It places a spotlight on engineering efficiency to ensure spending aligns with organizational goals. 

Cloud cost observability goes beyond simple cost tracking and provides granular insights into resource usage and how cloud costs are allocated, helping identify inefficiencies. With capabilities built around cost debuggability, teams can break down expenses across multiple dimensions and utilize tools like the Cost Analyzer for detailed visualizations and reporting.

Strategically implemented cost governance helps you effectively allocate spending across product lines, teams, customers, and more. Organizations foster a culture of accountability and informed decision-making by measuring unit economics and chargeback models. This approach is complemented by pre-built reporting tools that can simplify the generation of monthly reports and deliver valuable insights without the hassle of complex setups.

Another key advantage of cloud cost observability is proactive cost control. Teams can swiftly respond to potential overspending through anomaly detection, alerts, and forecasting that helps predict future costs and allows teams to remediate cost surges faster. Gaining real-time insights into costs at a granular level provides metrics that resonate across all departments, promoting a culture of accountability.

For those utilizing Kubernetes, cloud cost observability offers profound insights into workload utilization at the cluster, pod, and node levels. This visibility makes resource management more efficient and enables rapid optimization and waste reduction. 

Lastly, the flexibility of multi-cloud environments lets businesses quickly and securely connect with various cloud providers. Multi-cloud cost observability empowers organizations to easily slice and dice their cloud usage data in one centralized location, letting them focus on the most relevant costs and maximize the value derived from cloud investments.

Navigating the New Financial Frontier

As cloud infrastructure evolves and more offerings continuously hit the market, cloud cost management becomes increasingly complex. Today’s businesses often operate across multi-cloud environments (using platforms like AWS, Azure, and Google Cloud), manage multiple SaaS tools, and run containerized workloads in Kubernetes clusters. While these technologies offer flexibility, they also make cost management more challenging.

Without proper visibility into these sprawling cloud ecosystems, businesses can face significant issues such as:

• Runaway costs: Imagine you’ve set up a temporary server for testing but forget to shut it down. Even though it’s no longer in use, the cloud provider keeps charging you. This is a common scenario that leads to unexpected bills at the end of the month.

• Lack of insights: Cloud bills can be highly detailed and overwhelming. Without the applicable context and the ability to break down bills into meaningful insights, it’s tough to understand which teams, projects, or services are driving the majority of spending.

• Forecasting challenges: Predicting future cloud expenses without full visibility into current spending is almost impossible. You might underestimate future costs which could lead to budget overruns. Or, you can overestimate your expenses, leading to wasted resources.

Why Do Businesses Need Cloud Cost Observability?

For progressive businesses, cloud cost observability is no longer just a “nice-to-have” but a critical need. Here’s why:

• Avoid surprises: With observability, companies can monitor real-time cloud expenses, identifying cost spikes before they get out of control. Pinterest’s cloud expenses surged well beyond initial forecasts during the holiday season. The company had already committed to a $170 million deal with AWS but ended up needing an additional $20 million due to unexpectedly high demand.

• Optimize resources: By gaining granular insights into which workloads or services are consuming the most resources, businesses can better optimize their cloud usage. For example, Pinterest scales down its server usage by about 40% during off-peak hours to save costs, since Amazon charges by the hour. During peak traffic, Pinterest pays around $52 per hour for EC2 instances but this drops as low as $15 per hour during off-peak times.

• Better decision-making: Observability tools provide the data needed to make informed decisions about cloud investments. If one team is using an expensive cloud service inefficiently, the business can shift resources to more cost-effective solutions.

The 3 Pillars of Cloud Cost Observability

Businesses are navigating the journey of cloud adoption and optimization, moving step by step toward a more efficient and cost-effective future. Those who prioritize cloud cost observability are better positioned to build sustainable cloud development practices that enhance financial performance and support long-term growth.

The first step is cloud cost visualization, which provides a comprehensive view of expenses across multiple cloud accounts and providers, including essential development tools like Kubernetes. Tools like Amnic’s Cost Analyzer allow organizations to create tailored visualizations that break down cloud costs associated with networks, storage, computing, and Kubernetes. This single-pane view equips all teams with the insights they need to make more informed decisions.

Next comes cloud cost control, which comes into play when you wish to keep your expenses in check. By setting strategic guardrails, businesses can prevent runaway spending and manage budgets more effectively. You can also implement best practices from leading cloud service providers for faster detection of anomalies that deviate from expected spending patterns. When these anomalies occur, timely alerts enable teams to respond quickly to avoid overages, recommendations provide an actionable next step, and potential overspending is addressed before it continues to escalate.

Lastly, cloud cost management focuses on understanding the unit economics and allocation of cloud spending, such as dollars spent per cloud resource, team, or customer. By allocating expenses to specific teams, business units, or product lines, organizations gain granular insights into their budget utilization. This clarity facilitates more efficient budgeting and forecasting based on historical data and leads to more data-driven product development decisions in the future. Moreover, automating and simplifying the reporting process can democratize cloud cost knowledge across various roles and teams within the organization.

1. Cloud Cost Visualization

   Cloud cost visualization is all about making your cloud spend easy to understand. With businesses using multiple cloud platforms and SaaS tools, there’s no doubt that managing these costs can become complex fast. 

   This is exactly where our first cloud cost observability pillar comes in – cloud cost visualization – which can sort things out by offering real-time insights into how and where your cloud budget is used. 

   So, rather than scrolling through endless billing reports, you get clear visual representations of your cloud expenses. This makes it easier to spot trends, inefficiencies, and areas where costs can be optimized.

   In today’s cloud-first world, it's not enough to simply track expenses — we need to understand them fully as well. And, with cloud cost visualization, you get to:

   • Quickly identify which projects or teams are driving costs with real-time insights.

   • Detect anomalies or spikes in expenses to take immediate corrective measures.

   • Break down spending by cost centers such as departments or teams (e.g., engineering, product, finance) in a simplified graphical manner.

   • Gain immediate visibility into how various parts of the business are using cloud resources.

   Multi-Cloud & Multi-SaaS Cost Analysis

   Managing cloud costs becomes even more tricky when you're dealing with multiple platforms like AWS, Azure, and Google Cloud. Add SaaS providers like Salesforce into the mix and it can be a headache trying to track all those costs in one place.

   This is where Amnic can help. Instead of jumping between different platforms to see how much you’re spending on each one, Amnic lets you view all your cloud and SaaS costs from one centralized dashboard. 

   How does a centralized dashboard help you? A detailed analysis identifies inefficiencies or overspending and uncovers potential cost-saving opportunities. And, when you’ve got consolidated data in a single view, you eliminate the hassle of toggling between different tools to view the bigger picture of your cloud spend. 

   Challenges with Multi-Cloud & SaaS Visibility

   One of the main challenges companies face with multi-cloud environments is data fragmentation. Every cloud provider has different ways of reporting costs and SaaS products bring even more complexity into the picture. Without a unified reporting system, it’s difficult to get a clear view of where money is being spent.

   Solution: By integrating these platforms and their data into a single tool like Amnic, teams can consolidate cost data from multiple sources and get unified reports. This way, you can easily compare and contrast expenses across platforms and ensure nothing falls through the cracks.

   Custom Views and Dashboards

   Everyone in the organization does not need the same cost information. Engineers might need a detailed view of resource usage while finance teams focus more on the overall cloud spending. That’s why customizable dashboards are key to making cloud costs understandable for different departments.

   Amnic makes it easy to create the exact dashboards you need. With a customizable, centralized dashboard, anyone can easily navigate the system, access relevant data, generate personalized reports, and effortlessly gain valuable insights.

   You can filter the data to focus on specific teams, projects, or specific timeframes. Want a chart showing your cloud spending over the last quarter for a specific product? You can build it. Need a dashboard that shows your monthly spending on storage vs. computing power? Amnic lets you build your own charts based on the data you need most.

   With this centralized dashboard, you can:

   • Access all your cloud cost and usage data in one place for simplified tracking across services and platforms.

   • Instantly identify unexpected spikes in usage or costs to manage potential issues proactively.

   • Keep up with your cloud expenses for effective resource management and more informed decision-making.

   • Easily monitor and analyze spending to uncover opportunities for savings and optimize resource usage.

   Kubernetes (K8s) Views

   Kubernetes (K8s) is fantastic for managing containers but it adds another layer of complexity to cloud cost management. Since Kubernetes clusters are made up of many moving parts (e.g., pods, namespaces, clusters, and nodes), breaking down the costs associated with these resources can be challenging. In this case, it’s not about understanding the overall cloud bill but figuring out how much spending is due to each part of your K8s infrastructure.

   Best Practices for Visualizing K8s Costs

   • Use Amnic’s reporting to see costs by node and instance. This helps you understand how your spending breaks down across compute, storage, and network for each Node ID.

   • Utilize Karpenter configuration recommendations to provision and optimize nodes without needing custom auto-scalers or extra tools.

   • Take advantage of Amnic’s recommendations engine for container and PVC rightsizing to improve efficiency and lower costs across cloud providers.

   • Present cost splits and efficiency scores in a visually engaging format to simplify taking action and managing your cloud resources.

   • Lastly, to analyze costs and allocate spending accurately across teams and projects, inculcate the habit of saving reports, tag resources, and filter data using Amnic’s granular views.
     
     

2. Cloud Cost Control 

   To prevent cloud costs from going out of control, it’s essential to establish strong guardrails that keep spending in check. This is where cloud cost control takes center stage.

   Cloud cost control refers to the strategic practices and tools employed to monitor, manage, and optimize cloud expenditures effectively. 

   A common challenge many organizations face, especially in large engineering environments, is a lack of clarity regarding the sources of their cloud costs. This confusion can arise from the deployment of multiple features or services, making it difficult for teams to pinpoint where specific expenses originate.

   By implementing cloud cost control measures, businesses can gain valuable insights into their spending patterns, identify anti-patterns—areas of waste or inefficiency—and ensure that resources are allocated appropriately. 

   Cloud cost observability tools enable businesses to apply platform-specific recommendations that align with the best practices of leading cloud service providers (CSPs). 

   By detecting anomalies – expenses that fall outside of regular spending patterns – you can trace them back to the specific accounts or resources responsible. With proactive alerts for cost fluctuations, you can quickly respond to these unexpected spikes or deviations.

   Let’s take a look at each of these capabilities, one by one, to gain a thorough understanding of our second cloud cost observability pillar – cloud cost control.

   Anomaly Detection

   We’re already aware that, with anomaly detection, you can identify unusual patterns in cloud spending that deviate from the norm. It helps you spot irregularities before they turn into costly surprises. 

   You can utilize Amnic’s anomaly detection capabilities across major cloud platforms like AWS, Azure, and GCP. This helps you resolve several issues before they impact your budget by:

   • Pinpointing unstable cloud resources

   • Curbing unexpected cost spikes

   • Alerting your teams to quickly take action

   While you’re at it, you can break down the spending by team, cloud, tool, product line, and many more categories to manage unit economics more effectively and drive both performance and cost savings.

   Amnic’s Recommendations

   Amnic provides recommendations grounded in industry best practices from leading cloud service providers like AWS, Azure, and GCP. This ensures you achieve the best price-to-performance ratio while eliminating the constraints of legacy infrastructure.

   The tailored recommendations are designed to help you optimize your entire cloud infrastructure. Whether it’s Kubernetes, AWS, Azure, or GCP, our insights focus on rightsizing and cost optimization. 

   These recommendations give you a single view of your cloud costs, helping you: 

   • Prioritize improvements to boost efficiency

   • Track unit economics for better cost visibility

   • Ensure you’re not overspending with optimized resource allocation

   Amnic’s recommendations help you stay on top of your cloud budget, no matter what you’re doing – managing multi-cloud environments or understanding third-party SaaS tool costs.

   Kubernetes Recommendations

   Kubernetes environments are dynamic so, without real-time visibility, it's easy to experience inefficiencies that can lead to unnecessary costs. 

   You can monitor your clusters and nodes at a granular level, scanning key metrics like CPU and memory capacity, requests, and actual usage. By identifying deviations in these metrics, the tool helps pinpoint areas where resources may be over or under-provisioned.

   Amnic helps maintain optimal configurations by continuously monitoring these critical resources and alerting your teams to anomalous spending patterns. This leads us to the final aspect of cloud cost control – real-time alerts.

   Real-Time Alerts

   So, what do you do when you spot cloud costs going through the roof? Here’s where real-time alerts come into play. 

   Amnic lets you know the moment something unusual happens, giving you the chance to jump in before things get too expensive.

   Amnic’s integrations with tools like Slack and MS Teams help alerts land right where your team is already collaborating, without needing to switch tabs. When things get hectic, these alerts are your first line of defense. They help keep your cloud costs in check and ensure everyone’s on the same page.

   
   

3. Cloud Cost Management 

   Cloud cost management serves as the third pillar of cloud cost observability, playing a crucial role in translating cloud spending into actionable insights tailored to the unique needs of different organizations. 

   While cloud cost visualization provides a comprehensive overview of cloud expenditures and cloud cost control helps to rein in runaway spending, effective cloud cost management empowers teams to utilize that data strategically for informed financial decision-making.

   Understanding how these costs impact engineering and product teams is vital, as it enables businesses to critically assess their cloud investments. Cloud cost management is about both tracking spending and ensuring that every dollar spent contributes to overall business goals. This begins with gaining a clear understanding of unit economics tied to cloud expenses, including metrics like cost per customer or cost per user.

   By allocating costs to various teams, business units, and product lines, organizations can effectively monitor every dollar spent in the cloud. This approach allows for more accurate budgeting and enables forecasting of future expenditures based on historical spending patterns. Here’s what cloud cost management mostly revolves around:

   • Understand unit economics and analyze costs at a granular level 

   • Allocate costs to teams, departments, or product lines

   • Budget for future expenses more accurately

   • Forecast upcoming costs based on historical data

   • Automate reporting to make cloud cost insights accessible to everyone in the organization

   Unit Economics

   Understanding unit economics for your cloud costs is crucial for teams looking to benchmark their infrastructure expenses against key metrics like revenue, operational costs, and other factors that contribute to their Cost of Goods Sold (COGS). With Amnic, users can allocate cloud expenses across various dimensions, such as costs by business unit, cost per customer, or expenses associated with specific teams and products.

   Monitoring unit economics is essential for linking cloud costs to tangible business outcomes. By analyzing spending at a granular level—such as per customer, transaction, or user—businesses can evaluate how effectively they are utilizing their cloud resources. 

   Here’s how unit economics helps:

   • Relates cloud spending to business value
     Calculate cost per customer, transaction, or other critical units to assess cloud spending efficiency.
     
     

   • Identifies cost sustainability
     Helps determine if current cloud spending is sustainable or if adjustments are needed.
     
     

   • Pinpoints underused or overprovisioned resources
     By analyzing unit economics, you can identify areas where resources aren’t being used effectively and reduce waste.
     
     

   • Improves decision-making across teams
     Marketing, finance, and product teams can use unit economics data to make better decisions for pricing, resource allocation, and customer acquisition.
     
     

   • Optimizes cloud usage
     Helps organizations make data-driven decisions to optimize cloud usage.

   Cost Allocation

   Cost Allocation is the process of tracking and assigning your cloud costs to specific areas of your business such as teams, departments, services, projects, or products.

   For example, let’s assume that you want to know how much your engineering team is spending on cloud resources versus the production team, this is where cloud cost management would offer a more streamlined picture. You might also want to track costs for a specific project or product to ensure it stays within budget.

   Some of the key questions you’ll be able to answer after implementing cost allocation in your organization include:

   • How much is our engineering team spending on cloud infrastructure?

   • What’s the cloud cost associated with a particular product line?

   • How much spend should be attributed to the production department vs. other teams for cloud services like storage or compute?

   • How should we adjust budgets and financial forecasts for the next quarter?

   Cost allocation helps foster accountability and transparency across your teams and helps identify areas where you can optimize spending. It also aids in determining profitability and can drive decisions around where to scale services or projects. 

   With accurate cost allocation, your organization can ensure each department or product line meets its financial goals and can act quickly to mitigate any areas of overspending.

   Budgeting

   Budgeting, as the name suggests, is the planning and controlling of cloud expenses in your organization. Effective budgets set financial limits on how much you plan to spend on cloud resources and track actual spending against these limits. 

   Budgeting is a critical practice that helps businesses avoid unexpected costs and ensures cloud spending remains aligned with financial goals.

   Unlike traditional on-premise infrastructure, cloud resources scale up or down based on demand, making it harder to predict costs without constant monitoring. Given the dynamic nature of cloud environments, usage patterns can shift quickly and resource consumption can fluctuate unexpectedly. Thus, without a well-defined budgeting strategy in place, staying on top of your cloud spend becomes nearly impossible.

   Without a clear budget, businesses risk overspending, especially during periods of growth or unexpected usage spikes. By setting a cloud budget, organizations ensure they stay within financial boundaries while optimizing their cloud usage.

   How Can Amnic Help with Cloud Cost Budgeting?

   Amnic simplifies cloud budgeting by giving businesses access to comprehensive features that track and control cloud spending:

   1. Track Against Costs
      Amnic continuously tracks actual cloud spend against your predefined budget. This continuous cost monitoring helps you stay updated on any cost deviations in real time so you can take action before costs go beyond your control.
      
      

   2. Budget Allocation
      With Amnic, you can allocate budgets to specific teams, projects, or applications. This ensures that each unit of the organization is accountable for its own cloud spending and helps you easily monitor how different areas of the business are using resources.
      
      

   3. Cost Accountability
      Amnic helps foster a culture of accountability by providing full visibility into cloud spending across your organization. Teams can see exactly how much they’re spending and identify areas where they can improve cost efficiency. This way, it becomes easier for all departments to stay within their allocated budgets.
      
      

   4. Alerts and Reports
      Lastly, even if you miss other opportunities to optimize costs, Amnic has your back with customizable alerts that notify you whenever cloud costs exceed your allocated budget. You can also generate detailed reports to track spending trends across teams and projects. So, you can easily monitor financial performance, hold teams accountable, and take swift action to prevent runaway costs.

   Forecasting

   Forecasting in cloud cost management is the practice of predicting future cloud spending based on historical data, usage patterns, and projected resource requirements. It allows organizations to anticipate their cloud expenses and take proactive measures to manage costs more effectively. 

   Just like financial forecasting in business, cloud cost forecasting helps organizations plan for upcoming expenses and avoid surprises by setting realistic budgets.

   Forecasting is yet another important factor in cloud environments because cloud costs can fluctuate depending on factors such as scaling needs, seasonal demand, or unexpected changes in resource usage. 

   By forecasting future spending, businesses can better align their financial resources with their cloud strategy and make smarter decisions about scaling and resource allocation.

   How Can Amnic Help with Cloud Cost Forecasting?

   Amnic provides powerful forecasting tools that let businesses predict and manage future cloud expenses:

   • Amnic uses historical data to help you forecast future cloud spending trends. Analyzing past usage patterns gives you a better understanding of what to expect in terms of costs so you can avoid overages.

   • With Amnic, key cost centers such as teams or departments can stay informed about their spending trends. This proactive approach ensures teams are aware of their consumption patterns and can make timely adjustments, like right-sizing resources, to keep costs in check.

   Reporting

   Effective cloud cost management hinges on robust alerts and reporting mechanisms, which empower organizations to monitor their expenditures and uphold budgetary alignment. 

   The Cost Analyzer serves as a key tool, offering teams a detailed breakdown of cloud spending by allowing users to filter expenses by date range, cloud provider, and various other metrics. This capability enables quick identification of unexpected charges by dissecting costs across regions, resource IDs, and availability zones so that teams can swiftly address any anomalies.

   Streamlined reporting features further enhance financial oversight. Users can easily create, save, and export dashboards and reports for further analysis, facilitating effortless sharing with stakeholders. 

   Automated scheduling of these reports ensures that essential cost information is delivered on a daily, weekly, or monthly basis, minimizing manual effort and keeping all team members informed about spending trends.

   There is also a custom reporting option that allows departments to generate insights tailored to their specific cloud expenses. This, in turn, simplifies the consolidation of cost data and enables informed decision-making that aligns with organizational objectives. 

Summing Up

For anyone thinking that cloud cost observability is just a buzzword, let us tell you that it isn’t just any passing trend. It's here to stay for a long time and is an essential practice for any business looking to stay competitive in today’s cloud-driven world. So, we can either ignore it and continue to deal with rising cloud costs or we can embrace it and take control of our cloud spending.

Without proper cloud cost observability, companies risk wasting significant amounts of money on unused resources, inefficiencies, and poor cost management strategies. But, with the right approach, cloud cost observability offers clear benefits: better insights, proactive controls, and optimized cloud usage that correlates with your business goals.

The three pillars of cloud cost observability – visualization, control, and management – are key to unlocking these benefits. Visualization helps transform complex data into actionable insights while control mechanisms like alerts and anomaly detection let you stop cost overruns before they happen. Meanwhile, effective management ensures that every dollar spent is optimized for maximum value and business impact.

With the right tools and strategies in place, you gain full control over your cloud spending and use it as a driver for efficiency, scalability, and innovation. If your business hasn’t made cloud cost observability a priority yet, now is the time to act. The future of cloud cost management is here and those who adopt it will stay ahead of the curve.

Want to take a closer look at your cloud cost dynamics? Sign up for a 30-day free trial or request a personalized demo to see how Amnic can streamline your cloud costs and boost your bottom line.