“Benefit from economies of scale”. The summary of Blended and Unblended costs can be compressed into this phrase. The costs’ concept was always difficult to comprehend but it is necessary to make informed decisions. So, here is the perfect explanation with suitable examples to give you more clarity on the costs.
What are Unblended Rates
Unblended rates are the rates which are visible in the AWS billing console. Unblended rates are just a fancy term for normal rates. Unless you’re dealing with consolidated billing or you are a linked account under a payer account or, you manage multiple accounts for your organization.
Consolidated Billing Explained
1. Consolidated Billing—A mechanism to establish a hierarchy between accounts in order to generate a single invoice for multiple accounts, for accounting purposes.
2. Linked Accounts—Accounts under a master account. They have their own AWS credentials. Their billing is assimilated into a single invoice, payable by the master account.
3. Payer Accounts—An AWS account which receives a consolidated invoice for all services consumed by the linked accounts under it.
If you’re a linked account, odds are that you’re part of a group of accounts. AWS treats all these accounts as a single account. This means that the consolidated invoice clubs the usage of all common services into a single line item. This lets you take advantage of…
AWS S3 has tiered pricing, which means that you pay less per TB of storage when you use more of it.
If Bob and Susan are utilizing Data Transfer. If AWS prices Data Transfer at:
|First 10 TB Transferred||$0.17 per GB|
|Next 40 TB Transferred||$0.13 per GB|
And their usage is:
Per the pricing, they’ll both be billed
Usage*(price per first 10 TB)
Which would be
(8 * 1024) * $0.17: $1392.64, in Bob’s case
(4 * 1024) * $0.17: $696.32, in Susan’s case
What are Blended Rates
Blended rates are the averaged rates of the Reserved Instances and On-Demand Instances that are used by member accounts in an organization in AWS Organizations. AWS calculates blended costs by multiplying the blended rate for each service with an account’s usage of that service.
If Bob and Susan were both linked accounts under a payer account, they would be charged differently.
The total cost that the payer account owes is calculated as follows:
- Add the cost of the first 10 TB (10240 GB * $0.17 = $1740.8), to the cost of the next 2 TB (2048 * $0.13 = $226.24) for a total cost of $1967.04.
- Blended rate is calculated by dividing the total cost ($1967.04) by the amount of storage (12,288 GB), to produce a blended rate of $0.160078125 / GB.
- Finally, the cost for each linked account is allocated by multiplying the blended rate by the total usage.
Blended Rates Can Pose Challenges for MSPs
If you’re neither a Linked account nor are you managing several linked accounts, not much. However, if you’re either,
- An MSP managing AWS billing for your customers
- Managing multiple Linked accounts in your organization
Blended costs can creep up in all sorts of unexpected places. More so, when you’re a payer account. The AWS billing console only shows you Blended costs, which makes generating invoices for each Linked account under you.
Centilytics shows you per account, both the Blended and Unblended costs, at an hourly level granularity. This not only gives you a clear window of transparency but also makes managing invoicing that much simpler. Centilytics offers valuable insights across customer accounts to ensure easy and accurate billing and invoicing. With deeper visibility and more control over AWS environments, MSPs and resellers can be sure they are making better decisions to recognize the true benefits of resource allocation and purchasing, while providing greater value to their end customers.
We also have many more features which let you manage your AWS billing more effectively. You can start a free trial by going here.