Amazon Web Services (AWS) recently released a new set of features designed to help its clients lower their cloud infrastructure costs. It’s called the Cost Optimization Hub (Hub). But what can this new IaaS toolset really do and not do? Moreover, how far will it take your FinOps practice, and how does it compare to a cloud cost management solution like Tangoe’s?
In this article, we look at the pros, cons, and comparisons against the AWS Hub.
Pros: Unique Value in Cloud Cost Optimization
The Hub is a new step forward for the client experience. AWS has always had some cost optimization tools, but nothing as comprehensive and deep as this. It’s free for all enterprise customers globally, and it reveals cost-saving recommendations that center around six different types of optimization actions:
- Stop
- Rightsize
- Upgrade
- Graviton migration
- Purchase Savings Plans
- Purchase Reserved Instances
It’s safe to conclude that the Hub is AWS’ response to companies complaining about their cloud costs. Gartner reports companies overspend in the cloud by as much as 70%, and executives at various IaaS providers have admitted invoices can skyrocket uncontrollably. So, we must credit AWS for being the first to market with such client-oriented capabilities. As of today, Microsoft Azure and Google Cloud Platform don’t offer cloud optimization — nor do Oracle and VMware.
Cons: Conflicts of Interest and Impartiality
While something is far better than nothing, every client should be aware of the potential conflicts of interest in trusting any IaaS provider to deliver the most powerful abilities to optimize cloud costs and make the best use of their cloud resources. While providers might offer visibility into overage charges and fees — enough breadcrumbs to arrive at some money savings — true data observability (causation with deep contextual intelligence) can be limited and might come with the stipulations of additional fees.
Critics label these fees as predatory practices. Predatory or not, concerns remain about an innate lack of impartiality and the importance of continued oversight from clients and third parties. Our previous article explores this issue in depth.
Pros: Interactions with Quantified Savings Opportunities
The Hub doesn’t just serve up cost-saving tips, it also allows you to see the payouts and slice and dice data so clients can pull forward the most relevant suggestions. These interactive characteristics give it more value.
But before you slice data, it must be unified.
Aggregation is key in making it easy to cut costs in complex environments, and AWS reports the Hub collects all money-saving recommendations across AWS Cloud Financial Management (CFM) services, including AWS Cost Explorer and AWS Compute Optimizer. This way everything is in one place. It also accounts for personalized pricing and discounts in its recommendations, removing duplicates to provide a clean, consolidated overview.
From there, filtering features assist in prioritizing actions according to the largest dollar savings, as just one example. Clients can also sort by AWS account and AWS Region among other categories.
Cons: Limitations in Cloud Cost Optimization
Short Look-Back Periods
Critics argue that Hub’s look-back period for utilization is too brief to offer meaningful insights for cloud cost optimization. AWS is working to enhance the Hub with an option to expand the look back to 32 days, but is that enough? AWS’ Compute Optimizer toolset offers a 93-day look back. However, clients must pay for this “Enhanced Infrastructure Metrics” tool at a cost of ~$0.25 per instance per month.
Range Restrictions and Client Burdens
Additionally, critics also state the range of offerings is restricted. Indeed, the Hub is restricted to four AWS services.
AWS leaders tout new API integrations, helping clients gain clearer visibility into their Free Tier services, and highlight data export features now available in the Billing and Cost Management Console. However, critics claim that while these features are advertised as “enhancements” they still leave clients with a heavy lift that can become a barrier — connecting to APIs and applying advanced analytics to make sense of new data feeds.
Cons: The Hub is Not a Full FinOps Solution
Most companies are using native tools to support their FinOps practice, and the Hub is very helpful because it shortcuts manual evaluation processes generating recommendations to reduce cloud waste. But if you’re familiar with the depth and breadth of the FinOps strategy and framework, it won’t surprise you to hear that the AWS Hub falls short of being a complete and turnkey solution for FinOps practitioners.
Here are some apparent gaps when comparing the Hub against the domains of FinOps:
- Cost allocation and chargebacks
- Financial integrations to map usage data to IT budgets and apply corporate financial rules to cloud resource administration
- Measuring unit costs through data normalization
- Organizational alignment – data that can help bridge IT and finance teams
Native tools alone typically aren’t enough to achieve all that FinOps encompasses. Nonetheless 57% of companies use native IaaS tools to operationalize their FinOps practice, while just 21% say they use a FinOps solution platform, according to 2024 research from the FinOps Foundation.
Gartner Warns: Vendor Tools Limit FinOps Capabilities
“FinOps is a particular implementation of cloud financial management. It is often oriented toward what the vendor’s tools can do, rather than high-value best practices.” –Gartner
The bottom line: Take a hard look at your existing technologies, as tools will cut off your ability to achieve full cloud cost optimization.
AWS Hub versus Cloud Expense Management Solutions
“Is a cloud expense management (CEM) solution needed when I already have the AWS Hub?” As provider of CEM solutions, Tangoe gets asked this question a lot. This table below explores some of the overlapping features and distinct differences between AWS and Tangoe One Cloud. Key among them: cloud expense management reaches beyond AWS to also optimize IaaS services from Microsoft, Google, Oracle, and VMware.
Simply put, Tangoe’s Cloud Expense Management solution:
- Optimizes costs and usage across multiple cloud service providers – even across cloud software (SaaS) providers too!
- Goes deeper in our cost optimization analysis than AWS Hub
- Automates custom cloud financial reports and management, using integration to align with your financial systems and business rules
- Ties your IT budget to AWS usage costs, governing spending according to your parameters
- Aids in cloud ROI analysis with cost allocation and chargeback capabilities that connect expenses to projects and hold departments responsible for their cloud expenditures
See how one research firm tamed their cloud costs in 30 days with Tangoe, reducing cloud financial reporting process from 5 days to 5 minutes.