Cloud cost
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.
Last updated
Definition
Rather than averaging usage across a billing period, a high-water-mark meter charges near whatever the highest observed level was. Datadog bills infrastructure hosts this way: the max of the lower 99% of the month's hourly host counts, which excludes the very top outlier hours before taking the max. A brief spike shorter than that excluded slice barely moves the bill; one that runs longer gets billed as if that peak count ran all month.
It's the opposite failure mode from a resource billed on average usage, where a short spike gets diluted across the whole period. Anything metered this way rewards capping the peak specifically, not just lowering the average.
Where it shows up
High-water-mark billing shows up in a vendor's own billing methodology documentation and its usage dashboard, where the billed figure for a period tracks close to the highest observed level rather than the average across that same period. Datadog documents its infrastructure host billing this way in 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 completely. Most dashboards plot the average by default, which is precisely the chart that will not show you what you are being billed for.
Related
More in Cloud cost
- Committed use discount (CUD)
- Reserved instance (RI)
- Savings plan (SP)
- On-demand vs. spot instances
- Data egress
- Amortized, blended, and unblended cost
- Billed vs. effective vs. list vs. contracted cost
- Rightsizing
- Idle and orphaned resources
- Storage class
- Lifecycle policy
- Incremental snapshot
- Allocatable capacity
- Requests vs. limits
- Cluster idle
- Workload idle
- Bin packing
- Cost allocation tags
- Tag coverage
- Unallocated spend
- Showback vs. chargeback
- Unit economics
- RI/SP coverage and utilization
- Observability tax
- Metric cardinality
- Log ingest vs. index
- Snowflake credit
- Auto-suspend / resume minimum
- BigQuery slot
- Bytes scanned & partition pruning
- Time Travel & Fail-safe
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.