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Unit Costs

πŸ’‘ What Are Unit Costs and Business Metrics?​

A unit is any metric that your business tracks, like users, requests, transactions, or customers. In Vantage, you can add unit costs as a visualization on Cost Reports to visualize your cloud infrastructure costs on a per unit basis. A business metric is a unit of data from your business that’s aggregated and combined with costs to produce a per unit costβ€”like cost per daily active user, cost per customer, or cost per million API requests. Business metrics can be solely related to business goals, like cost per user, or related to system metrics, like cost per API request.

πŸ’­Β Why Should I Use Them?​

Most organizations already have key performance indicators, or KPIs, as a part of their company's goals. They help to measure efficiency and provide a better context for why you may be experiencing cost spikes. For example, some spikes may be justified based on adding a new user or increasing your customer base. Tracking per unit costs helps to provide some details as to why costs are changing.

πŸ“ Business Metrics Use Cases​

  • You are a financial analyst at a SaaS company and use unit costs and business metrics to understand the cost per daily active user (DAU). By visualizing cloud infrastructure costs on a per unit basis, you can determine how changes in user activity impact overall costs. For example, if there’s a spike in costs, you can correlate it with an increase in DAUs, justifying the expenditure and helping the company plan budgets more accurately.
  • As a DevOps engineer, you can use business metrics to track the cost per million API requests for a microservices-based application. By visualizing these costs, you can pinpoint which services are driving up expenses. If a particular microservice shows a disproportionate cost increase per API request, you can investigate performance tuning, resource optimization, or architectural changes to reduce costs and improve efficiency without compromising on service quality.

πŸ“š Lesson 1: Understand Unit Costs and Business Metrics​

πŸ“š Lesson 2: Create Business Metrics​

πŸ“– Additional Resources​