AWS – How to set up Billing Alarms

by Alexander Weiß

A lot of people feel that they lose control when they move their datacenter into the cloud. To a certain degree this feeling is understandable, especially if it comes to the costs and data security. Amazon helps you to remain in control of the costs by providing Billing Alarms. What they do and how you can set them up is matte of this post.

If people run their datacenter within their rooms and with their hardware, they often have the feeling that they are in full control of the costs. The reason for this is that the costs are known and changes in the costs are way more predictable. If they move into the cloud, they are confronted with a completely new environment. They cannot access any experience and that makes the cloud very unpredictable. Another reason is that if you move to the cloud, you are bound to the offering of your cloud provider. Changing the provider is not as easy as changing the producer of your hardware. And If the offered services are as vast as Amazon’s are and if you are using a lot of different services it is hard to understand how to calculate your costs. Amazon provides a price calculator (http://calculator.s3.amazonaws.com/calc5.html ), but it still is just a tool to theoretically calculate costs. And there is no guarantee that the data you provide is exactly the same data as you are billed for.


To counterfeit this uncertainty Amazon has introduced Billing Alarms. In theory a Billing Alarm is a pretty simple mechanism: You define a metric you want to control, e.g. “Total estimated charges”, and provide a value for this metric, e.g. 50,000$. As soon as your total estimated charges are higher than 50,000$ Amazon sends an email to you to inform you that you surpassed your budget. Now you have to act, because something didn’t work out as expected and you might get into trouble, because you are generating costs, you might not be able to cover.

How to set up Billing Alerts

Before you can set up any Billing Alerts you have to enable them. Go to the “My Account” homepage and open the “Account Activity” page. On the top of the page you should see a yellow box where you can find a link to enable them. If you click the link you are redirected to the CloudWatch Management Console and a welcome window greets you:

Billing Alarm welcome screen

Billing Alarm welcome screen

Click on the “Create Alarm” button and a simple form for creating alarms is opened.

Create Billing Alamrs simple form

Create Billing Alamrs simple form

There are just five fields to fill:

  • Send a notification to: Together with the next field you can create email distribution groups – the Amazon term for them is topic. In this field you fill in the name of the distribution group aka topic

  • With these recipients
    : In this field you have to enter all email addresses which should receive the Billing Alarms
  • Whenever charges for: Here you define which figure you want to monitor
  • Exceed: If the generated costs of the selected figure exceed this value an email alert is sent to the distribution group.
  • Name this alarm: Here you give a name to the alert so you can recognize it better at a later time

If you have provided the data click on “Create Alarm”. You will get a confirmation window that the Billing Alert was created successfully.

Billing Alarm creation success

Billing Alarm creation success

Before you can receive alerts, each email account has to be validated: A confirmation email is sent to every account, and the account owner has to confirm the Billing Alert subscription by clicking on the “Confirm subscription” link. You have to go through this process only once per distribution group.
Every alert you create is listed in the Alarm section of the Amazon CloudWatch Management Console. If you take a look at the Billing Alerts you have just created you will see something like “EstimatedCharges > 50 for 360 minutes” in the row “Threshold”.

Billing Alarm overview

Billing Alarm overview

This means that the Exceed value you set for the Billing Alert are calculated for period of six hours. You are probably having the urge to change the Exceed value right now, because you probably thought that the value was calculated on a dialy/weekly/monthy basis and you calculated the Exceed value on this assumption: But wait a minute.
You can blame Amazon for not telling you on which period the Exceed value is based, but before you are getting angry you should read my next post about Billing Alarms, because the form I explained in this post is just a simplified version and there are many more options in the standard one. I hope these more powerful forms will calm you down. 😉

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