Committed use discountCUD
A discount a provider gives in exchange for committing to a minimum spend or usage level for a fixed term.
Read the full definition →Glossary
Cloud & AI Cost Glossary
Answer-first definitions for the cost terms that turn up on your AWS bill, your Anthropic invoice, and every FinOps review in between.
Last updated 50 terms
Cloud cost
The pricing models, cost-accounting bases, and waste patterns behind an AWS-style bill.
Reserved instanceRI
A commitment to a specific instance type in a specific region or zone, discounted versus on-demand pricing.
Read the full definition →Savings planSP
A commitment to a dollar-per-hour spend level, applied automatically across compute regardless of instance family.
Read the full definition →On-demand vs. spot instances
On-demand pricing charges the full published rate with no commitment; spot pricing sells unused capacity at a steep discount but can be reclaimed with little notice.
Read the full definition →Data egress
The fee a cloud provider charges for data leaving its network, including (on most providers) transfer between availability zones.
Read the full definition →Amortized, blended, and unblended cost
Three different bases for reporting the same underlying spend: unblended is the raw per-resource rate, blended averages a rate across an account, and amortized spreads upfront commitment costs evenly across the term they cover.
Read the full definition →Billed vs. effective vs. list vs. contracted cost
The four cost columns FOCUS defines for the same charge: cash-basis, amortized, pre-discount, and negotiated-rate. That's why two dashboards can quote two different numbers for the same month.
Read the full definition →Rightsizing
Matching a resource's provisioned size to its actual, observed utilization instead of the peak it was originally sized for.
Read the full definition →Idle and orphaned resources
Resources still running (and billing) despite doing no meaningful work: idle resources are underused, orphaned resources have no owner or purpose left at all.
Read the full definition →Storage class
A pricing/durability tier for stored data: the same bytes cost a different amount, and take a different amount of time to read back, depending which class they sit in.
Read the full definition →Lifecycle policy
A rule that automatically moves or deletes stored data after a set condition (an age threshold, most often) without anyone touching it by hand.
Read the full definition →Incremental snapshot
A backup that stores only the blocks changed since the previous snapshot in its chain, not a full independent copy. That's why deleting one frees far less space than its listed size suggests.
Read the full definition →Allocatable capacity
What's left for pods to request on a Kubernetes node, after the kubelet, container runtime, OS, and DaemonSets reserve their own slice of it.
Read the full definition →Requests vs. limits
A request is what the scheduler reserves for a container and determines whether it fits on a node; a limit is just a ceiling the kubelet enforces at runtime.
Read the full definition →Cluster idle
Node capacity that's schedulable but was never even requested by any pod: a bin-packing and autoscaling problem, not a request-sizing one.
Read the full definition →Workload idle
Capacity a pod requested, and had reserved on its behalf, but doesn't use. A request-sizing problem, fixed by right-sizing to observed usage.
Read the full definition →Bin packing
How tightly a scheduler packs pods onto the fewest nodes possible, given their requests. Loose packing strands capacity as cluster idle across many half-empty nodes.
Read the full definition →Cost allocation tags
Key-value labels applied to cloud resources so spend can be grouped by team, project, environment, or customer instead of showing up as one undifferentiated total.
Read the full definition →Tag coverage
The share of spend (measured by dollars, not resource count) that carries a required tag set.
Read the full definition →Unallocated spend
The share of a bill that can't be attributed to a real owner, because it isn't tagged, its tag is wrong, or it structurally can't carry a tag at all.
Read the full definition →Showback vs. chargeback
Showback reports each team's cloud spend for visibility only; chargeback bills that spend back to the team's budget.
Read the full definition →Unit economics
Infrastructure cost expressed per customer, per request, or per transaction, instead of as a single company-wide total.
Read the full definition →RI/SP coverage and utilization
Coverage measures what share of eligible usage is discounted by a commitment; utilization measures what share of the commitment you purchased is being used.
Read the full definition →Observability tax
The cost of the monitoring stack itself (hosts, custom metrics, traces, and logs) growing on its own, independent of the infrastructure it's watching.
Read the full definition →Metric cardinality
The number of unique metric-name + tag-value combinations a monitoring platform has to store and bill for, not the number of metric names your code emits.
Read the full definition →High-water-mark billing
A billing method that charges close to a resource's peak usage during a period, rather than its average. A spike lasting long enough can set the whole month's charge.
Read the full definition →Log ingest vs. index
Two separate charges most observability platforms bill independently: ingest is charged the moment a log event arrives; index (or retention) is a recurring charge for keeping it searchable afterward.
Read the full definition →Snowflake credit
Snowflake's unit of compute billing. A virtual warehouse burns credits every second it runs, at a rate that doubles with each warehouse size.
Read the full definition →Auto-suspend / resume minimum
Snowflake's default behavior of suspending an idle warehouse to stop billing it, and resuming it on the next query — with each resume billing at least 60 seconds regardless of how short the query is.
Read the full definition →BigQuery slot
A unit of query-processing capacity in BigQuery. On-demand queries draw from a shared pool billed by bytes scanned; an Editions reservation buys dedicated slots billed by slot-hour instead.
Read the full definition →Bytes scanned & partition pruning
On-demand BigQuery bills by how much data a query reads, not how long it runs. Partition pruning and column selection are the two levers that shrink that number.
Read the full definition →Time Travel & Fail-safe
Two Snowflake mechanisms that keep changed or deleted data recoverable, and keep billing storage for it: Time Travel for a configurable window, Fail-safe for a fixed 7 days after that.
Read the full definition →AI & LLM cost
How usage-based model API spend is metered, priced, and controlled.
Token
The basic unit of text an LLM API meters and bills by: roughly three to four characters of English text, not a whole word.
Read the full definition →Input vs. output tokens
Most LLM APIs price input tokens (the prompt you send) and output tokens (the response generated) separately, with output usually priced several times higher.
Read the full definition →Context window
The maximum number of tokens (prompt, conversation history, and generated output combined) a model can process in a single request.
Read the full definition →Prompt caching
A pricing and performance feature that discounts (and speeds up) tokens repeated across requests, instead of billing the full input rate every time.
Read the full definition →Batch API
An asynchronous request mode that trades a longer turnaround (minutes to hours) for a significant discount versus real-time API calls.
Read the full definition →Cost per 1M tokens
The standard unit LLM providers use to publish pricing: the dollar cost of one million input or output tokens, since a single token is too small a unit to price meaningfully.
Read the full definition →Per-request cost
The fully-loaded cost of a single API call (input tokens, output tokens, and any tool calls) expressed as one number per request or per completed task.
Read the full definition →Fine-tuning vs. inference cost
Fine-tuning cost is a one-time (or periodic) training expense to specialize a model; inference cost is the ongoing, usage-based cost of running it.
Read the full definition →Model tiering
Routing each request to the cheapest model capable of handling it well, instead of sending every request to the most capable (and most expensive) model available.
Read the full definition →FinOps & process
The habits and metrics that turn a bill into something a team can manage.
FinOps
The operating practice of managing cloud (and increasingly AI) spend as a shared responsibility between finance and engineering, on an ongoing cadence.
Read the full definition →FOCUSFOCUS
The FinOps Open Cost and Usage Specification: an open, vendor-neutral standard for how a provider's cost and usage export is shaped, maintained by the FinOps Foundation.
Read the full definition →Cost anomaly detection
Automatically flagging spend that deviates meaningfully from a service or workload's own historical baseline, instead of waiting for a human to notice on the invoice.
Read the full definition →Budget and budget alert
A budget is a target spend ceiling for a scope of cost; a budget alert notifies an owner when actual or forecasted spend approaches or crosses it.
Read the full definition →Cost forecasting
Projecting future spend from historical trend and known upcoming changes, used to catch a budget overrun before it happens rather than after.
Read the full definition →Run-rate
Current spend annualized (or projected to month-end) as if the recent pace continued unchanged: a quick, if naive, forward-looking number.
Read the full definition →Total cost of ownershipTCO
The full cost of a system or vendor decision over its useful life, including costs beyond the sticker price: migration, integration, ongoing operation, and eventual replacement.
Read the full definition →Bill shock
The experience of an invoice arriving dramatically higher than expected, with no earlier warning that it was building.
Read the full definition →Percentage-of-savings pricing
A cost-tool pricing model that charges a cut of the spend it manages or the savings it identifies, rather than a flat fee.
Read the full definition →A rate you looked up will change again.
Provider pricing pages change without notice. CostMon tracks the bill that pays for it.