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High-water-mark billing

A billing method that charges close to a resource's peak usage in a period, not its average. A spike that lasts long enough can set the charge for the whole month.

Cloud cost

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Definition

A high-water-mark meter does not average usage over a billing period. It charges near the highest observed level. Datadog bills infrastructure hosts this way. It takes the max of the lower 99% of the month's hourly host counts. That drops the very top outlier hours first. A brief spike inside that dropped slice barely moves the bill. A longer spike is billed as if that peak count ran all month.

This is the opposite of a resource billed on average usage, where a short spike is diluted across the whole period. For anything metered this way, cap the peak. Lowering the average is not enough.

Where it shows up

High-water-mark billing shows up in a vendor's billing methodology documentation and in its usage dashboard. The billed figure for a period tracks close to the highest observed level, not the average. Datadog documents its infrastructure host billing this way on its own pricing pages.

What makes it expensive

Lowering the average does nothing against this meter. A high-water-mark charge tracks the peak, whatever the average looks like. So the usual efficiency work misses it. Most dashboards plot the average by default. That is the chart that will not show you what you are billed for.

The invoice is a lagging signal.

A monthly invoice tells you what already happened. CostMon builds a daily baseline, so a spike stands out while you can still act on it.

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