Cloud Cost Management Tools: Must-Have Features

Cloud Cost Management Tools: Must-Have Features

Cloud computing is an indispensable component of today's enterprises, enabling them to function more efficiently. With this increased reliance on cloud services, it is essential to establish a plan for managing cloud costs and maximizing returns on investments. 

Cloud cost management tools are an excellent way to optimize cloud spending, and their effectiveness has increased over time. This article explains cloud cost management tools, how they've evolved, and how they can help you maximize your cloud savings.

Summary of key cloud cost management tool concepts

The table below summarizes the cloud cost management tool concepts we will explore in this article. 

Concept Description
What are cloud cost management tools? Software solutions that monitor, analyze, and help optimize cloud costs.
Budgeting and forecasting Enable businesses to plan and create a budget that works for them while also employing highly accurate forecasting capabilities.
Cost anomaly detection Make it possible for businesses to find and see all the information about cost anomalies in their cloud accounts so that they can act quickly.
Guardrails and auto-remediation Allow businesses to define the rules that govern how their service should operate.
Resource optimization and right-sizing These include tools for identifying orphaned or unused resources and for correctly sizing and matching cloud resources to the needs of a workload.
Rate optimization Allows businesses to identify opportunities to reduce costs by utilizing different pricing plans or usage tiers.
Support for multiple clouds This lets businesses use a single tool to adopt, learn, and maintain all of their cloud providers.
Integrated security, compliance, and governance A unified solution for managing a company's cloud security, compliance, and governance.
FinOps maturity assessment Regularly assess cloud accounts to benchmark cloud practices against FinOps standards, and develop a roadmap for greater maturity

What key features should cloud cost management tools have?

Cloud cost management tools are software solutions that help businesses monitor, analyze, and optimize cloud costs. They provide visibility into your cloud spending, enabling you to identify areas of wasteful or unnecessary spending. They also offer insights into how efficiently your cloud resources are utilized, so you can adjust your cloud usage to ensure that you only pay for what you need.

These tools are becoming increasingly important for businesses as cloud computing costs rise. Enterprises are looking for ways to reduce their spending on cloud services, and cloud cost management tools are one of the best ways to do that.


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How cloud cost management tools have changed

Cloud providers' cloud cost management solutions have advanced significantly since their inception. Previously, these tools were primarily used for tracking detailed billing records and providing basic insights. 

Modern solutions, on the other hand, are significantly more sophisticated and offer a variety of features that can detect abnormal increases in spending and take remedial action to stop wasteful cloud usage.

Despite adding new capabilities to cloud providers' native toolsets, many organizations prefer to use the same tool across all cloud providers to avoid the need to adopt, learn, and maintain/administer multiple tools.

Additionally, organizations must manage multiple aspects of cloud governance, which is facilitated by a single application (cost, security, and governance).

These aspects include:

  • Budgeting and forecasting
  • Cost anomaly detection
  • Guardrails and auto-remediation
  • Resource optimization and right-sizing
  • Rate-based optimization
  • Support for multiple clouds
  • Integrated security, compliance, governance
  • Assessment of FinOps maturity

Cloud cost management tool features

The sections below thoroughly explore the key features of cloud cost management tools. 

Budgeting and forecasting

Multi-cloud budgeting and forecasting.

Multi-cloud budgeting and forecasting.

Budgeting and forecasting help you understand and track your cloud costs, forecast how your spending is likely to change over time, and enable you to plan for future expenses. For example, you can create a budget for a specific team or application and then assign resources to that budget based on resource tags to keep track of and report on your spending.

As cloud spending grows, more businesses delegate responsibility for cloud costs to each team to keep track of their spending. Budgeting can help operations teams coordinate their allocated spending with finance teams and align with pre-approved budgets for each quarter.

Additionally, by using the forecasting feature, you can answer business questions like

  • What would my new monthly bill be if I deployed a new workload in AWS, and how does it compare to Azure or Google Cloud?
  • What would be the new cost for a specific workload if I changed the instance type from medium to large?
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Cost anomaly detection

A valuable feature of cloud cost management tools is the detection of cost anomalies. This feature lets you detect unexpected or unusual changes in your cloud costs. For example, this feature will create a baseline for your spending and usage and, using advanced machine learning, identify anomalous spending and root causes so you can take action quickly.

Suppose you have a fairly stable but growing user base and access patterns to your application. Then your application suddenly receives a large influx of new unexpected users, and an automatic scaling activity is triggered. Your application is still fully functional, and there was no impact to your users. However, your hourly spend has more than doubled.

In another scenario, a developer may inadvertently change a configuration and begin using a much more expensive compute or database service instead of the regular and more affordable one.

Cost anomaly detection can assist you by identifying these anomalous behaviors and alerting you so you can take corrective actions before a large invoice arrives at the end of the month.

Guardrails and auto-remediation

Guardrails and auto-remediation are two features that prevent wasteful or unnecessary spending on cloud services. These policies are used to evaluate the configurations of your cloud resources to ensure that they adhere to your company's standards and service-level agreements. 

Cost management guardrails.

Cost management guardrails.

For example, you could create a guardrail to define that the most expensive storage volumes should not be used in your organization. If a new resource is deployed using the most expensive storage, it will be flagged as non-compliant, but its creation will not be prevented. 

This is where auto-remediation comes in. You can create a remediation action ranging from deleting the non-compliant resource to automatically switching to a less expensive storage type.

Resource optimization and right-sizing

Resource optimization and right-sizing are two features that allow you to only pay for the resources you need. Adding features to existing cloud structures is straightforward and offers great flexibility, particularly for rapidly expanding businesses. However, this frequently results in abandoned, unnecessary, or forgotten workloads, which incur unnecessary costs.

Right-sizing works by constantly monitoring your resources on multiple metrics, such as CPU and memory, and then analyzing this data to determine the best and most cost-effective resource type to run your workload.

Assume you added a new server with 16 GB of memory because you anticipated the needs of its workload. Your application is then deployed, tested, and moved to production. However, your application only uses 2 GB of memory, and you are still paying for a lot of unused capacity. The tool will detect the overallocation of RAM and offer you a smaller instance that you can move to with the click of a button.

Idle and orphaned resources are also included in the resource optimization tool. The tool will monitor multiple systems to identify potentially unused resources. Orphaned resources are not associated with another resource, such as an IP address or a storage disk.

Instead, a storage volume with no I/O or a database with no connections, for example, may be idle resources that are costing your company money. The resource optimization tool will identify these resources and provide recommendations and corrective actions for you.

Rate-based optimization

The rate-based optimization of cloud cost management tools is another important feature. This enables you to identify opportunities to reduce costs by utilizing different pricing plans or usage tiers. 

Cloud providers typically provide discounts if you commit to running resources or spending a certain amount of money for one to three years.

These are called “reserved instances” and “savings plans” in AWS and can provide significant cost savings. The rate optimization tool will track your current usage across multiple services over time and recommend purchasing a specific reserved instance to reduce your monthly spending.

Once purchased, it will monitor its performance and coverage, providing additional information on your total savings and notifying you when it is time to renew or increase your commitment.

Multi-cloud support

Cloud cost management tools compatible with various cloud service providers, such as Amazon Web Services, Microsoft Azure, and Google Cloud, will add significant value and are a key aspect of multi-cloud cost optimization at scale. For example, multi-cloud support in a cloud cost management tool can help you:

  • Monitor and control costs across multiple services 
  • Standardize your internal processes and user training 
  • Aggregate the total cost of your entire environment in one report. 

Multi-cloud support can save you time and effort because you won't have to switch between multiple tools and platforms to track your cloud costs and use the same governance and compliance policies across your multi-cloud infrastructure.

Integrated security, compliance, and governance

Modern cloud cost management tools provide integrated security, compliance, and governance features. These features help you ensure that your cloud services are secure and compliant with industry regulations. 

For example, they can help you monitor and track access to cloud services, ensuring that only authorized users have access. They can also help you monitor and track changes to cloud resources, ensuring that you have visibility into how your cloud environment is changing. They can also help you quickly find and fix security or regulatory compliance problems, all in the same user interface.

FinOps maturity assessment

Finally, some cloud cost management tools can assess FinOps maturity. A FinOps maturity assessment examines how your cloud account is performing in terms of cost control, whether your resources are managed within your defined budget thresholds, and whether your resources are used optimally. The assessment also includes recommendations and cost-cutting measures.

A maturity index is calculated based on the number of violated resources per scenario. This maturity index can help you understand how your cloud account has performed over time.

An example of a maturity index is provided below.

Maturity Index Description
1 Indicates that the resources in your cloud account should be more closely monitored for proper cost control and optimization.
2 Indicates that the approach used to manage the resources in your cloud account is basic and can be significantly improved in terms of cost control and optimization.
3 Indicates that the resources in your cloud account are well-managed in terms of cost control and optimization. However, there are opportunities to improve it further.
4 Indicates that the resources in your cloud account are managed efficiently in terms of cost control and optimization. There are also some minor areas for improvement.
5 Indicates that the resources in your cloud account are managed in an extremely optimized manner in terms of cost control and optimization, and no changes are likely to be required.


Cloud cost management tools are essential for businesses that rely on cloud services. They provide visibility into your cloud costs and allow you to identify and address unnecessary or wasteful spending. In addition, they provide budgeting and forecasting, cost anomaly detection, guardrails and auto-remediation, resource optimization and right-sizing, rate-based optimization, support for multiple clouds, integrated security, compliance, and governance, and an assessment of FinOps maturity. 

These features can assist you in optimizing your cloud savings and maximizing your return on investment. These features are designed to give businesses complete control over their cloud costs and enable them to manage and optimize their spending proactively. If you want to reduce your cloud costs, third-party multi-platform cloud cost management tools are an excellent choice.

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