AWS Budgets vs. Cost Explorer: Features, Use Cases, Pros & Cons

What Is AWS Budgets? 

AWS Budgets is a financial management tool for AWS users to set and manage budgets for their cloud expenses. With AWS Budgets, users can define custom spending limits on individual or aggregate services, helping maintain control over cloud expenditures. The tool provides timely notifications through email or AWS Simple Notification Service (SNS) when costs approach or exceed the predefined budget, giving users a heads-up to take corrective measures.

Source: AWS

 Key Features of AWS Budgets

• Customizable budget limits: AWS Budgets enables users to create customized budgets based on cost, usage, or reservations. Budgets can be tailored to specific services, projects, or organizational units, providing flexibility in monitoring different aspects of cloud expenses.
• Notifications: The tool offers alert notifications via email or AWS SNS when spending nears or exceeds budget thresholds. Users can set up multiple alerts for a single budget, ensuring timely intervention to prevent budget overruns.
• Granular budget tracking: AWS Budgets provides tracking based on various dimensions such as specific AWS services, linked accounts, or tags. This allows for detailed oversight and control over specific cost drivers within the organization.
• Forecasting capabilities: AWS Budgets offers simple forecasting features to predict future spending based on current usage patterns. This helps users anticipate potential budget breaches and take corrective actions in advance.
• Integration with AWS services: It integrates seamlessly with other AWS tools like AWS Cost Explorer and AWS Billing, allowing users to track expenses and optimize budgets within the broader AWS ecosystem.

AWS Budgets Use Cases

• Project-based budgeting: Organizations running multiple AWS-powered projects can create individual budgets for each, allowing them to monitor costs and ensure projects stay within financial constraints. Alerts can notify project managers when expenses near predefined limits.
• Departmental expense control: AWS Budgets is ideal for allocating and monitoring cloud expenses across departments. IT managers can create separate budgets for different teams, ensuring adherence to departmental spending plans and preventing overconsumption.
• Preventing unexpected expenses: For businesses with strict financial oversight requirements, AWS Budgets helps avoid surprise cloud costs by sending proactive alerts when usage patterns indicate potential budget breaches.
• Cloud cost allocation for startups: Startups often face limited financial resources. AWS Budgets can help startups control cloud costs by setting strict budget thresholds, ensuring that they stay within their financial means as they scale their cloud usage.

This is part of a series of articles about AWS cost management

Table of Contents

1. What Is AWS Cost Explorer?
2. AWS Budgets vs. AWS Cost Explorer: Key Differences
3. AWS Budgets: Pros and Cons
4. AWS Cost Explorer: Pros and Cons
5. Considerations for Choosing Between AWS Budgets and AWS Cost Explore

What Is AWS Cost Explorer?

AWS Cost Explorer is an analytics tool that offers insights into AWS spending patterns over time. It allows users to dive deep into their cost and usage data, providing visualizations over months or days, with granularity up to an hourly level. Such detailed cost understanding enables organizations to pinpoint trends and anomalies quickly. By visualizing how and where resources are consumed, companies can identify the most cost-intensive areas and consider adjustments or optimizations.

Source: AWS

Key Features of AWS Cost Explorer

The following native AWS tools can help you forecast your organization’s AWS expenses. 

• Detailed cost and usage reports: AWS Cost Explorer offers users in-depth reports that break down AWS usage and associated costs. It allows analysis of spending across services, accounts, regions, and tags, providing detailed insights into cost drivers.
• Data visualizations: The tool provides customizable graphs and charts that help users visualize their cloud usage and costs over time. This enables quick identification of trends and anomalies in spending.
• Filtering and grouping options: AWS Cost Explorer allows users to filter and group cost data by different dimensions, such as service type, usage type, or specific linked accounts. This granularity helps in isolating specific areas for cost optimization.
• Forecasting based on historical data: Using up to 12 months of historical data, AWS Cost Explorer can generate forecasts of future spending trends. These forecasts help organizations predict cloud expenses and adjust budgets accordingly.
• Anomaly detection: AWS Cost Explorer includes built-in anomaly detection features, which notify users of unexpected spikes in costs. This helps users respond quickly to unusual usage patterns and avoid unnecessary expenses.

AWS Cost Explorer Use Cases

• Cost optimization for enterprises: Large enterprises with multiple AWS accounts and services can use Cost Explorer to identify cost-saving opportunities. By filtering data across accounts and services, financial teams can pinpoint areas where usage can be reduced or optimized.
• Identifying trends in service usage: AWS Cost Explorer helps organizations monitor long-term usage trends, allowing them to understand how cloud service consumption changes over time.
• Supporting financial planning and budgeting: By analyzing historical data, businesses can use AWS Cost Explorer to create more accurate financial forecasts and set realistic budgets for future cloud usage.
• Tracking costs across multiple projects: Companies running multiple AWS-based projects can use Cost Explorer to track individual project costs and usage. This allows project managers to keep cloud expenses in check.
• Analyzing reserved instance utilization: AWS Cost Explorer is particularly valuable for tracking the usage of reserved instances (RIs) and ensuring that the organization is getting optimal value from its reservations. This helps in making data-driven decisions about purchasing or modifying RI plans.

AWS Budgets vs. AWS Cost Explorer: Key Differences 

1. Purpose and Focus

AWS Budgets emphasizes financial planning and control by allowing users to set precise spending limits, ensuring that expenditures align with organizational goals. Its primary focus is on the prevention of budget overruns through proactive alerts and tracking.

AWS Cost Explorer is centered around cost analysis and optimization. Its primary purpose is to provide detailed visibility into spending patterns, helping users understand their resource utilization. By offering analytical insights, it aims to facilitate cost-efficiency improvements and strategic resource management.

2. Key Functionalities

AWS Budgets provides customizable budget settings based on real-time cost and usage data. Users receive alerts when spending approaches thresholds, enabling immediate action. The tool supports a variety of budget types like cost, usage, and reservation budgets.

AWS Cost Explorer offers an interactive dashboard to visualize cost and usage trends across timespans. With filters and detailed data granularity, users can slice and dice information for customized reports. It assists in discovering cost-saving opportunities by categorizing spending across accounts, services, or regions.

3. Usage Insights

AWS Budgets offers straightforward usage insights linked to predefined budget thresholds. By focusing on budget alignment, it provides an overview of adherence to financial targets, emitting alerts when limits are near or breached.

AWS Cost Explorer provides a broader understanding of usage patterns and expenses. It presents historical data comparisons and recognizes spending anomalies, promoting intelligent planning and forecasting.

4. Customization

AWS Budgets provides customization in the creation of budgets tailored to specific business needs like project budgets or department-specific allocations. Users can customize alerts and define specific actions triggered by certain budget conditions.

AWS Cost Explorer also offers customization, primarily by allowing users to segment data by various attributes such as service type, account, or user-defined tags. Users can tailor visualizations and reports to match specific analytical needs.

5. Historical Data

AWS Budgets tracks real-time cost vs. budget data but offers limited insights from historical perspectives. Its primary utility is in current and future budget enforcement rather than past expenditure analysis, focusing mainly on recent usage and ensuring budget constraints are respected.

AWS Cost Explorer provides more extensive access to historical data, typically up to 12 months in the past. It enables users to analyze spending trends over time, offering a window into previous expenditure patterns. This supports budgeting processes by allowing organizations to make informed predictions based on historical data trends.

6. Use Cases

AWS Budgets is ideal for scenarios where strict financial oversight is needed. For instance, project managers setting precise budget limits for IT projects can utilize AWS Budgets for monitoring. It is also suitable for companies with limited financial headroom.

AWS Cost Explorer excels with businesses aiming to drive cost efficiencies through detailed analysis. It's valuable for financial analysts who need to assess service use variability and create strategies for cost reduction.

AWS Budgets: Pros and Cons 

Pros:

1. Proactive budget management: AWS Budgets allows users to set precise spending thresholds and receive alerts when those limits are approached or exceeded.
2. Customizable alerts: The tool provides flexibility in setting up notifications through email or AWS SNS, enabling timely responses to budget breaches.
3. Ease of use: AWS Budgets is user-friendly, requiring minimal setup to start tracking expenses.
4. Integration with AWS tools: AWS Budgets integrates with other AWS services, such as AWS Cost Explorer and AWS Billing.

Cons:

1. Limited historical data: AWS Budgets primarily focuses on current and future budget tracking, offering limited insights into past spending patterns.
2. Basic analytical capabilities: While AWS Budgets is excellent for setting and managing budgets, it lacks the in-depth analytical features found in tools like AWS Cost Explorer.
3. Potential for alert fatigue: Frequent notifications, especially in dynamic environments with fluctuating costs, can lead to alert fatigue.
4. Dependency on manual adjustments: As business needs evolve, budget settings in AWS Budgets may require frequent updates.

AWS Cost Explorer: Pros and Cons 

Pros:

1. Comprehensive cost analysis: AWS Cost Explorer provides detailed insights into spending patterns, enabling users to analyze costs across various dimensions such as services, accounts, or regions.
2. Historical data access: Users can review up to 12 months of past expenditure data, allowing for trend analysis and informed forecasting.
3. Interactive visualization: The tool's interactive interface offers customizable visualizations, making it easier to understand complex data. Users can create tailored reports and dashboards that align with specific business needs.
4. Anomaly detection: AWS Cost Explorer includes features for detecting cost anomalies, helping organizations quickly identify and address unexpected spikes in spending.

Cons:

1. Steeper learning curve: Compared to AWS Budgets, AWS Cost Explorer requires a higher level of expertise to use effectively.
2. Limited real-time alerts: Unlike AWS Budgets, Cost Explorer does not offer real-time budget alerts.
3. Complex setup for detailed reports: Creating customized reports and dashboards in AWS Cost Explorer can be time-consuming.
4. Less focus on budget enforcement: While AWS Cost Explorer excels at cost analysis, it does not directly enforce budget limits.

Considerations for Choosing Between AWS Budgets and AWS Cost Explorer

Here are the key considerations for choosing between AWS Budgets and Cost Explorer:

• Primary objective: When choosing between AWS Budgets and AWS Cost Explorer, consider your primary objective. If your main goal is to prevent budget overruns and maintain strict oversight on expenses, AWS Budgets is suitable. If your focus is on understanding spending patterns, identifying trends, and optimizing usage, AWS Cost Explorer offers more profound insights.

• Forecasting needs: AWS Budgets helps predict when spending may breach limits, based on established budgets. This capability provides an opportunity for course correction. Conversely, AWS Cost Explorer delivers predictive insights by analyzing past consumption patterns and offering trend-related forecasts.

• The complexity of the analysis required: AWS Budgets’ straightforward financial controls entail less complexity, suitable for simple oversight without detailed analytics. AWS Cost Explorer suits those needing complex analysis, offering tools to dissect data via filters, reports, and trends.

• User expertise: For users with limited technical expertise, AWS Budgets provides an intuitive platform for budget setting and monitoring. AWS Cost Explorer, while offering insights, requires a degree of analytical skill to use effectively.

Related content: Read our guide to AWS cost monitoring.

Finout: Ultimate Replacement for AWS Budgets and Cost Explorer

Finout’s new financial planning feature outperforms AWS Budgets and Cost Explorer by offering:

1. Multicloud & SaaS Spend Management: Manage costs across multiple cloud providers and SaaS tools, not just AWS, for a complete financial view.
2. Granular Budgeting: Create detailed budgets per team, service, or department, offering more precision than AWS Budgets.
3. Real-Time Anomaly Detection: Receive instant alerts for cost spikes, unlike AWS’s limited historical tracking.
4. Advanced Reporting & Forecasting: Build customizable financial models to predict future spend more accurately than AWS tools.

Finout’s comprehensive, real-time insights and enterprise-level control make it a superior solution for cloud cost management.