Blended cost
Blended cost is AWS cost priced at a blended rate: the average of the Reserved Instance and on-demand rates that accounts in an AWS Organization paid for the same usage. It spreads the benefit of reservations evenly across accounts, so it rarely matches what any one account was actually charged.
In plain English
Think of a group dinner where one friend had a discount voucher. Splitting the bill evenly gives everyone a share of the discount, which is fair to the group but hides who brought the voucher. Blended cost is the even split.
Formula and worked example
Blended cost = usage amount × blended rate
- Blended rate
- = total cost of that usage across the organization's accounts ÷ total usage
| On-demand rate | $0.10 an hour |
|---|---|
| Reserved Instance rate | $0.06 an hour |
| Account A, unblended (Reserved Instance) | $43.80 |
| Account B, unblended (on demand) | $73.00 |
| Blended rate: $116.80 ÷ 1,460 hours | $0.08 an hour |
| Each account's blended cost | $58.40 |
The total is the same, split evenly. That's fair if the Reserved Instance was bought for the whole organization, but it hides that Account A's usage was the one the reservation covered.
Why blended cost exists
AWS consolidated billing lets one account's Reserved Instances discount matching usage in other accounts of the same organization. Blended rates share that discount evenly across every account that ran the same kind of usage, instead of leaving it with whichever account it happened to land on.
For most analysis today, unblended or amortized cost is the better choice: unblended matches the invoice, and amortized shows what usage cost over time. Blended cost answers a narrower question, how to share reservation discounts evenly, and it exists only on AWS.
Common mistakes
- Reconciling blended cost with the invoice. Blended cost redistributes discounts between accounts, so per-account blended totals won't match what AWS charged each account. Use unblended cost to reconcile.
- Using it for showback by default. Every account gets the same average rate, so a team that planned and bought commitments sees no more benefit than one that didn't. Many teams prefer amortized cost with explicit rules for sharing commitment savings.
- Summing it over every line. AWS leaves blended cost blank on discount lines in the Cost and Usage Report, because discounts are calculated from unblended cost. Totals built from line_item_blended_cost leave discounts out.
- Comparing it with other clouds. Azure and Google Cloud have no blended cost, so comparing AWS blended cost with their figures mixes different bases.
Where to find it in AWS, Azure and Google Cloud
| Cloud | What it is called | Where to find it |
|---|---|---|
 AWS | Blended costs | Cost Explorer → Advanced options → Blended costs, for organizations that use consolidated billing. In CUR 2.0: line_item_blended_rate and line_item_blended_cost (blended rate × usage amount). |
 Azure | No equivalent | Azure doesn't blend rates across subscriptions. Reservation and savings plan benefits are applied by scope, and amortized cost shows each subscription its share. |
 Google Cloud | No equivalent | Google Cloud doesn't blend rates. Commitment discounts are applied to the usage they covered, and the billing export shows them per project. |
How CloudYali helps
CloudYali doesn't use blended cost: it shows AWS cost as billed (unblended), and Financial Commitments uses amortized commitment cost, so each account and team sees what it was actually charged.
Related terms
Billing & cost types
Unblended cost
Unblended cost is AWS cost as billed: each line priced at the rate actually charged for it, on the day the charge occurs. Upfront commitment fees appear in full on the day you pay them and discounts can show as separate lines, which makes unblended cost the view that matches the invoice.
Billing & cost types
Amortized cost
Amortized cost spreads each commitment fee across the period it covers, so a one-year Reserved Instance or Savings Plan paid up front shows up as a share of the fee every day of the term instead of one large charge on the day you buy it.
Commitments & rates
Reserved Instance (RI)
A Reserved Instance (RI) is a one- or three-year commitment to a specific kind of capacity, such as an EC2 instance type in a region or an RDS database, in exchange for a lower hourly price. It's a billing discount, not a server, and you pay for every hour of the term whether the capacity runs or not.
Allocation & accountability
Cost allocation
Cost allocation is assigning every part of the cloud bill to the team, product or customer responsible for it, using accounts, tags and agreed rules for shared costs. It turns one invoice into numbers each owner can act on, and it is the basis for showback, chargeback and unit economics.
Allocation & accountability
Showback
Showback is reporting each team's allocated cloud cost back to that team, for visibility and accountability, without moving money between budgets. It shows owners what their choices cost so they can act on it, and unlike chargeback it is not entered into the company's accounts.
Frequently asked questions
What is the difference between blended and unblended cost?
Unblended cost is what each account was actually charged, at its own rates. Blended cost reprices the same usage at an average rate across the organization, so reservation discounts are shared evenly. For that usage the organization's total is the same; per-account figures aren't.
Should you use blended cost for chargeback?
Usually not. It shares discounts evenly whether or not a team planned for them. Most teams charge back on amortized cost and decide explicitly how commitment savings are shared.
Do Azure or Google Cloud have blended cost?
No. Blended rates are an AWS consolidated billing feature. Azure and Google Cloud apply commitment discounts to specific usage, and amortized cost shows who used them.
