Using AWS, Azure, and GCP tagging to TRACK BUSINESS VALUE...

Proactively manage your IaaS & PaaS investments with a standard IT cost model

OverviewEnterprise use of public cloud services has made managing IT costs more complicated than ever. Infrastructure & Operations (I&O) leaders need to track, analyze, and manage not only traditional infrastructure and applications but also the company’s usage and cost of public cloud services such as Amazon Web Services (AWS).

Adding to the complexity of hybrid IT cost management, different parts of an organization require different views of cloud cost and usage data. CFOs and Corporate Finance organizations typically look at costs from the corporate reporting perspective of cost centers while CIOs, IT Finance, and I&O leaders need granular views of cost by projects, applications, services, and resource types such as compute, storage, and network. IT leaders depend on this context to accelerate better technology investment decisions.

AWS offers hundreds of cloud services billed per-second, generating millions of billing line items each month, complicating management of IT costs. To solve these challenges, IT needs a standard solution that incorporates costs based on cloud usage with on-premises IT costs for an integrated view of today’s hybrid IT business.

IT needs a standard solution that incorporates costs based on cloud usage with on-premises IT costs for an integrated view of today’s hybrid IT business

Using AWS, Azure, and GCP tagging to

TRACK BUSINESS VALUE OF CLOUD SPEND

2 | © 2018 Apptio, Inc. All rights reserved. apptio.com

Using AWS, Azure, and GCP tagging to track business value of cloud spend

Integrating public cloud into a standard IT cost modelProduct configuration flexibility is great for users, but creates new challenges for IT management. When AWS and Azure generate monthly bills, each resource yields dozens or hundreds of distinct billing line items. All of this fidelity is bundled under a single invoice that the finance department pays each month, but the granularity and meaning is typically lost in cost reporting to IT and business leaders.

To understand cloud spend in the context of the enterprise technology business, IT needs both a unified model for categorizing cloud and non-cloud costs together, and automation to map millions of billing line items into the IT cost model each month. Without it, there is no management view of how much cloud spend is going to storage vs. compute vs. network, how much of the enterprise’s total compute spend is driven by public cloud vs. traditional models, or how public cloud is impacting the costs of projects, applications, and services that the business consumes.

Apptio is the only solution that automatically maps cloud costs to an industry-standard framework of hybrid IT services spanning both public cloud and on-premises resources.

Based on the Apptio TBM Unified Model® (ATUM®), this mapping is embedded into Apptio® Cloud Business Management as part of an end-to-end solution for ingesting billing detail, categorizing costs, modeling fully-loaded costs including internal labor, and providing self-service analytics on how cloud impacts broader hybrid IT costs. This allows you to:

• Analyze multiple cloud providers using a common taxonomy

• Make apples-to-apples comparisons between cloud and on-premises delivery models

• Identify opportunities to optimize by reserving instances or downsizing overprovisioned workloads

Business Units or Business Capabilities

Business Unit or Business Capability





IT Towers

Data Center

End User

Compute

Application

Storage

Delivery

Network

Security & Compliance

Output

IT Management

Cost Pools

Internal Labor

Internal ServicesOtherTelecomFacilities &

PowerSoftwareHardwareOutside Services

External Labor

Services

End User Services Business Application Services

Delivery Services Platform Services Infrastructure Services Emerging

BUSI

NES

S V

IEW

IT V

IEW

FIN

AN

CE

VIE

W

Figure 1: The TBM taxonomy provides a standard set of categories for costs and other metrics

Platform



Adding business context A key strategy for improving public Cloud Business Management by both IT and its business partners is to put cost into the context where key decisions are made, including application, project, and business unit consumption. To do so, Apptio Cloud Business Management leverages the linked accounts and tagging capabilities provided by AWS and Microsoft Azure.

Business context with linked accountsAWS, Microsoft Azure, and Google Cloud Platform provide access to their products and services through individual accounts, each with its own credentials and the ability to purchase and manage services. Many enterprises have many accounts at the team and departmental levels (whether they know it or not). These can be spread throughout application development, projects, IT infrastructure, and business units. This decentralization fosters agility, but left unmanaged, this fragmentation of unlinked accounts creates blind spots in cost and operational management, as well as increasing costs by missing out on discounts for aggregate consumption volumes.

Figure 2: Apptio Cloud Business Management provides analysis of public cloud broken out by product (per the service mapping), by customer (linked account owners), and by provider.

To gain the benefits of central visibility while preserving the benefits of decentralized agility, enterprises can link individual accounts into one “master account” paid through an IT cost center. The linkage between individual accounts enables Apptio to pull in all usage and costs for the enterprise, while using the owner of each individual account (e.g. an application team or business unit) as a way to analyze cost “by customer” in self-service analytics. And, it can qualify enterprises for deeper volume discounts. Using a linked account paid by IT brings cloud spend out of the shadows while still enabling local departmental, team, or business unit agility.

For workloads with infrastructures that do not need to share resources, individual AWS accounts can be used to group usage by workload or project. This can be accomplished by establishing individual AWS accounts for each workload and mapping them directly to your enterprise organizational structure.

Business context with tagging Tagging in a public cloud environment is a vital way to embed critical business context into cloud workloads.

Without tagging information, cloud provider bills will only include information about the provider services and potentially the accounts responsible for deploying the resources.

With tagging information, you can get more descriptive information about the resources—the application consuming that resource, the environment supported by the resource, and the individual who owns the resource are all examples of information that is generally associated with resource tags.



Tags do not have any semantic meanings and are interpreted strictly as a string of characters. There is a maximum of 50 tags per AWS resource; Azure has a limit of 15 tags per resource; GCP has a maximum of 64 tags per resource. Tags are made up of “keys” (AWS) “names” (Microsoft Azure), and “labels” (GCP) paired with a “value.” AWS allows up to 10 keys for each resource and each key can have unlimited values enabling very detailed grouping of resources.

A five-phase approach for taggingFor organizations that lack a coordinated approach to tagging today, here is a five-phase approach to get started:

Phase 1: Define objectivesPhase 2: Define scopePhase 3: Define tagsPhase 4: Implement tagsPhase 5: Adjust for optimization

Limitations with taggingAs an enterprise expands its public cloud footprint, it will eventually reach limitations to a manual approach for managing individual accounts and tagging—the setup process for each AWS or Azure account is onerous.

When using tags beyond application and project names, a tagging schema needs to be created and controlled. Mistakes in tagging can cause a resource to be unassociated to applications and projects in the cost model.

Some AWS and Azure resources cannot be tagged, requiring a different cost distribution scheme to be created and maintained to allocate those costs across the enterprise.

With limitations to account-based and tag-based grouping, the tracking methodology needs be aligned to the structure of the environment.

Where the resources are 100% dedicated to a specific workload, group by AWS or Azure account; tagging is ideal for environments where you need to share resources across multiple workloads.

Tagging with ApptioThe best method for tagging (directly creating tags or creating a single tag for connection via CMDB) may depend on your organizational standards, CMDB readiness, and other factors. But if you don’t have an obvious choice based on that, Apptio recommends the first option—applying all tags directly to the cloud resource, rather than depending on a CMDB to “glue” things together.

Apptio automatically downloads billing usage information directly from AWS and Microsoft Azure—with tagging information included on each billing line item. Apptio will include that tagging information when the bill is downloaded.

Apptio recommends mapping to the following resource tags. These tags provide I&O leaders with information they need to hold groups accountable for incorrect tagging.

• Organization (e.g., business unit, department)

• Application name

• Application category

• Application objective

• Environment

• Purpose

• Cost center (e.g., Cost center ID)

• System owner

• Project (e.g., business initiative)

Once all the tagging data is mapped correctly, tags will enable customers to correctly allocate cloud cost to the correct application, cost center, business unit, and more. These tags also allow for detailed analysis of cloud usage not available with provider billing data alone.



Delivery Services Platform Services Infrastructure Services

Strategy & Planning Development Support Operations Security &

Compliance Data Applications Network Compute Storage

Technology Business Management

Budgets

Innovation & Ideation

Enterprise Architecture

Program & Project Management

Business Solution Consulting

IT Vendor Management

Design & Development

CodeCommit

CodeDeploy

CodePipeline

CodeBuild

OpsWorks

Application Insights

HockeyApp

Team Services

Visual Studio

Testing

Device Farm

System Integration

Application Support

Developer Support

Business Support

Enterprise Support

XL SLES

Service Desk

Connect

IT Training

Central Print

IT Service Management

Config

Service Catalog

Monitoring

CloudWatch

Cognito

CloudTrail

Cognito Sync

X-Ray

Operational Insights

Application Insights

Monitor

Log Analytics

OMS Insight and Analytics

Deployment & Administration

EC2 Container Registry (ECR)

Automation

Capacity Management

Security

Inspector

Directory Service

Key Management Service (KMS)

Web Application Firewall (WAF)

CloudHSM

Shield

Key Vault

Active Authentication

Active Directory Domain Services

Multi-Factor Authentication

Security Center

Business Continuity & Disaster Recovery

Recovery Services

Site Recovery

Governance, Risk & Compliance

Database

Athena

Cloud Directory

DynamoDB

EC2-Database

Relational Database Service (RDS)

SimpleDB

Elastic MapReduce (EMR)

HDInsight

SQL Database

DocumentDB

StorSimple

SQL Data Warehouse

Distributed Cache

ElastiCache

Redis Cache

Cache

Data Warehouse

Redshift

Data Management

Database Migration Service

Data Pipeline

Snowball

Ingestion Service

Data Pipeline

API Management

Data Factory

Data Lake Analytics

Data Lake Store

Import/Export

Time Series Insights

Data Analytics & Visualizations

QuickSight

Power BI

Machine Learning

Machine Learning (ML)

Machine Learning

ML API Services

Content Management

Application Hosting

GameLift

Lightsail

Greengrass

App Service

Cloud Services

Logic Apps

Mobile Services

Service Fabric

Xamarin Test Cloud

Search

Top Sites

CloudSearch

Elasticsearch Service (ES)

Bing Autosuggest APIs

Bing Search APIs

Search

Message Bus & Integration

API Gateway

Simple Email Service (SES)

Simple Notification Service (SNS)

Simple Workflow Service (SWS)

IoT

Simple Queue Service (SQS)

Pinpoint

API Management

IoT Hub

BizTalk Services

Event Hubs

Mobile Engagement

Hybrid Connections

Service Bus

Streaming

Elastic Transcoder

Kinesis

Stream Analytics

Media Services

Internet Connectivity

DataTransfer

Networking

Virtual Private Network

Virtual Private Cloud (VPC)

Direct Connect

ExpressRoute

Virtual Network

VPN Gateway

Domain Services

EC2-Domain Services

Route53

DNS

Load Balancing

Traffic Manager

Application Gateway

Data Network

Voice Network

Virtual Compute & Containers

EC2-Compute

Virtual Machine

Compute on Demand

Lambda

Functions

Physical Compute

Mainframe

Networked Storage

EC2-Storage

Elastic File System (EFS)

Storage Gateway

File & Object Storage

Simple Storage Service (S3)

Data Management

GEO Redundant

Backup & Archive

Glacier

Backup

Distributed Storage (CDN)

CloudFront

CDN

Business Unit 1 Business Unit 2 Business Unit 3 Business Applications 1 Business Applications 2 Business Applications 3

Business Units & Applications

Services

Service NameAWS Service

Azure Service

Service with no AWS or Azure equivalent.

LEGEND

Service Category

Service Type

Cost Pools & Sub-Pools

Internal Labor External Labor Outside Services Hardware Software Facilities & Power Telecom Other Internal Services

Expense Expense Consulting

Managed Service Provider

Cloud Service Provider

Expense

Lease

Maintenance & Support

Depreciation & Amortization

Expense

Subscription



Expense

Lease



Expense

Lease



Other By Shared Service

Capital Capital Capital Capital Capital Capital Capital

IT Towers & Subtowers

Data Center Compute Storage Network Output End User Application Delivery Security & Compliance

IT Management

Enterprise Data Center

Other Facilities

Servers (Windows/Linux)

Unix

Midrange

Converged Infrastructure

Mainframe

Online Storage

Offline Storage

Mainframe Online Storage

Mainframe Offline Storage

LAN/WAN

Voice

Transport

Central Print Workspace

Mobile Devices

End User Software

Network Printers

Conferencing & AV

IT Help Desk

Deskside Support

Application Development

Application Support & Operations

Business Software

Database

Middleware

Mainframe Database

Mainframe Middleware

IT Service Management

Operations Center

Project Management

Client Management

Security

Compliance

Disaster Recovery

IT Management & Strategic Planning

Enterprise Architecture

IT Finance

IT Vendor Management

CapE

xO

pEx

Cloud Provider Billing Detail & Your Related Costs

Figure 3: Using data directly from AWS, Apptio Cloud Business Management aligns AWS EC2 costs into IT towers, services, and applications.



What makes tagging with Apptio different Works with messy, fragmented tagsApptio’s world-class data management platform uses business rules to accommodate misspellings and disparate tagging schemes. Start with what you have and improve over time.

Retroactively models resource costsApptio’s cost model tracks costs for every cloud asset that appears in a bill, tagged or not. When you add tags to a resource, our model automatically recalculates all historic costs to reflect the information in the new tags.

Govern tagging strategyWe provide reports that show the completeness and validity of tags so that IT leaders can measure progress and conformance of their tag rollout. Completeness is the % of non-blank tags. Validity is the % of tags conforming to a list of valid values.

Get startedApptio (NASDAQ: APTI) is the business management system of record for hybrid IT. Learn more or get started at apptio.com.

Cloud Business Management®

Figure 4: Aligning cloud spend to valid tagging values flags point-in-time and trending data quality.

Understand, manage, and optimize your public cloud spend with ApptioApptio Cloud Business Management is designed to give you an understanding of your entire cloud spending so you and your teams can make better decisions and optimize how you are buying and using cloud services.

Key benefits of Apptio Cloud Business Management:

• Understand cloud cost and usage across AWS, Azure, and GCP with cloud billing auto-mapped to standard IT service categories (ATUM) like Compute, Storage, and Database

• Fully burden cloud costs with labor, security, and other costs for allocations that help drive accountability for apps and BUs driving consumption (ATUM)

• Make good decisions and forecast variable spend with real-time monitoring, reporting, and analysis of spend and consumption tagged by infra, app, and business unit

• Drive optimization and accountability by identifying underutilized and idle cloud instances, including reserved instances

• Quick time to value using self-service setup to configure in minutes using only your AWS, Azure, and GCP credentials

www.apptio.com

Using AWS, Azure, and GCP tagging to TRACK BUSINESS VALUE...

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