Overview
Custom cost allocation allows you to showback or chargeback your costs by attributing selected costs to relevant business dimensions. After you have set up allocation rules, you can report on which costs were allocated by a rule.
Custom cost allocation runs after Tag Pipelines, enabling allocations based on user-defined tags. Costs are allocated on a daily basis, and can be applied to Cloud Cost metrics from AWS, Google Cloud, and Azure.
Rule creation
Access the Custom Allocation Rules section under Cloud Cost settings to establish rules. Choose from the following allocation methods:
| Allocation Method | Description | Examples |
|---|
| Even | Costs are allocated evenly to your destination tags. | Untagged support costs are allocated evenly to teams teamA, teamB, and teamC. |
| Custom Percentage | Costs are allocated based on custom percentages for the destination tags. | Untagged support costs are allocated 60% to teamA, 30% to teamB, and 10% to teamC. |
| Proportional | Costs are allocated based on the proportional spend of destination values. | Untagged support costs are allocated to teams teamA, teamB, and teamC based on their proportion of total spend on Amazon EC2. |
| Dynamic by Metric | Costs are allocated based on the proportional amount of a defined metric. | Shared PostgreSQL costs are allocated by total query execution time to users as defined by the Datadog metrics query sum:postgresql.queries.time{*} by {user}.as_count(). |
Allocation methods
With the even strategy, costs are allocated evenly towards your destination tags, regardless of any other spend. Apply a filter to refine which part of the bill determines the proportions.
With the custom percentage strategy, you can define static custom percentages for the destination tags you select. For example, if you have 3 destinations (teamA, teamB, teamC) you can allocate 60% to teamA, 30% to teamB, and 10% to teamC.
Costs are allocated based on the proportional spend of destination values. Similarly to even allocation, you can further customize your allocation by setting filters and partitions.
Metrics-based allocation provides the ability to split up costs based on Datadog’s metrics queries. By using performance metrics to allocate expenses, you can more accurately allocate costs based on application usage patterns.
For example, this PostgreSQL metrics query sum:postgresql.queries.time{*} by {user}.as_count() tracks the total query execution time per user. The relative values are then used to determine what proportion of total PostgreSQL costs should be allocated to each user.
For determining the proportion of costs to be allocate, metrics can be aggregated on a daily or monthly basis. However, the costs themselves are still allocated on a daily basis.
Specify what costs are included in the allocation
| Step | Required | Examples |
|---|
| Select the cost provider | Yes | AWS, Google Cloud, Azure |
| Define the costs to split (source) | Yes | aws_product contains support, allocated_spend_type is untagged |
| Define the destination | Yes | team is teamA, teamB, teamC |
| Filter by | Only applicable for Even and Proportional strategies, optional | aws_product is ec2 |
| Partition costs by | Only applicable for Even, Proportional, and Dynamic by Metric strategies, optional | environment is all values |
| Name | Yes | allocate_untagged_support_costs |
Partitioning
For some of the allocation strategies, you can specify how cost proportions should be partitioned to ensure segment-specific allocations. For example, with proportional allocation, if you partition your costs by environment using tags like staging and production, the proportions are calculated separately for each environment. This ensures allocations are based on the specific proportions within each partition.
Managing rules
Rules can be modified and deleted in the Custom Allocation Rules section of the Cloud Cost settings page. All fields except for the rule name can be reconfigured.
Rules are applied in the same order as shown in the list.
Visualize your allocations
Changes to custom allocation rules may take up to 24 hours to be applied. After being applied, the new allocations can be seen throughout Cloud Cost Management on all costs that have Container Allocation enabled. Custom allocated costs also include an allocated_by_rule tag, denoting the rule name that applied the allocation.
Further reading
Additional helpful documentation, links, and articles:
