Cost estimation is a powerful feature available in HCP Terraform (formerly Terraform Cloud) that helps organizations understand the financial impact of infrastructure changes before they are applied. This feature automatically calculates the estimated monthly costs for resources defined in your Ter…Cost estimation is a powerful feature available in HCP Terraform (formerly Terraform Cloud) that helps organizations understand the financial impact of infrastructure changes before they are applied. This feature automatically calculates the estimated monthly costs for resources defined in your Terraform configurations.
When you create a plan in HCP Terraform, the cost estimation feature analyzes the resources being created, modified, or destroyed and provides a detailed breakdown of expected costs. This happens during the plan phase, allowing teams to review potential expenses before committing changes to production infrastructure.
Key aspects of cost estimation include:
1. **Supported Providers**: Cost estimation works with major cloud providers including AWS, Azure, and Google Cloud Platform. It covers commonly used resources like compute instances, storage, databases, and networking components.
2. **Cost Breakdown**: The feature displays costs at multiple levels - per resource, per workspace, and aggregated across the organization. This granularity helps identify which specific resources contribute most to infrastructure spending.
3. **Delta Calculations**: When modifying existing infrastructure, cost estimation shows the difference between current and proposed configurations, highlighting whether changes will increase or decrease monthly spending.
4. **Policy Integration**: Organizations can use Sentinel policies to enforce cost-related governance rules. For example, you can create policies that require approval for changes exceeding a certain cost threshold or block deployments that would exceed budget limits.
5. **Run Task Integration**: Cost estimation can be configured as part of the workflow, ensuring financial review occurs consistently across all infrastructure changes.
6. **Visibility**: Cost estimates appear in the HCP Terraform UI during plan review, making financial information accessible to all team members involved in the approval process.
This feature is particularly valuable for organizations practicing FinOps, as it shifts cost awareness earlier in the development lifecycle and promotes financial accountability among infrastructure teams.
Cost Estimation Features in HCP Terraform
Why Cost Estimation Matters
Cost estimation is a critical feature in HCP Terraform that helps organizations understand the financial impact of infrastructure changes before they are applied. This prevents unexpected cloud bills and enables better budget planning and governance. For teams managing large-scale infrastructure, having visibility into costs at the planning stage is essential for making informed decisions.
What is Cost Estimation?
Cost estimation is a feature available in HCP Terraform (formerly Terraform Cloud) that automatically calculates the projected monthly cost of resources defined in your Terraform configuration. When you run a plan, HCP Terraform analyzes the resources being created, modified, or destroyed and provides an estimated cost change.
Key aspects include: - Monthly cost projections for supported resources - Cost delta showing the difference between current and proposed infrastructure - Resource-level breakdown of individual costs - Integration with the Sentinel policy framework for cost governance
How Cost Estimation Works
1. During the Plan Phase: When a Terraform plan is generated, HCP Terraform identifies all supported resources in the configuration.
2. Price Lookup: The system references current pricing data from cloud providers (AWS, Azure, GCP) to calculate costs.
3. Cost Calculation: Based on resource specifications (instance type, region, storage size), monthly costs are computed.
4. Results Display: The estimated costs appear in the run UI, showing: - Proposed monthly cost - Cost change from current state - Per-resource cost breakdown
5. Policy Integration: Sentinel policies can reference cost estimates to enforce budgetary controls, such as blocking runs that exceed a certain cost threshold.
Supported Resources
Cost estimation supports resources from major cloud providers including: - AWS: EC2 instances, RDS, EBS volumes, Lambda, and more - Azure: Virtual machines, storage accounts, databases - Google Cloud: Compute instances, Cloud SQL, storage
Not all resources are supported, and estimates are approximations based on available pricing data.
Enabling Cost Estimation
Cost estimation is available on HCP Terraform paid tiers (Team and Governance, Business, and Enterprise). It can be enabled at the organization level through settings. Once enabled, cost estimates automatically appear for all applicable runs.
Exam Tips: Answering Questions on Cost Estimation Features
1. Remember the Tier Requirement: Cost estimation is NOT available on the free tier. It requires paid HCP Terraform subscriptions.
2. Know When It Runs: Cost estimation happens during the plan phase, not during apply. This allows teams to review costs before committing changes.
3. Sentinel Integration: Be prepared for questions about using Sentinel policies to enforce cost controls. You can create policies that check the cost estimate and prevent runs exceeding budget thresholds.
4. Understand Limitations: Cost estimates are approximations. They do not account for usage-based pricing, discounts, reserved instances, or resources not yet supported.
5. Organization-Level Setting: Cost estimation is configured at the organization level, not per workspace.
6. Focus on Use Cases: Expect scenario-based questions about when cost estimation is valuable, such as preventing budget overruns or reviewing infrastructure changes in pull requests.
7. Cost Delta Concept: Understand that cost estimation shows both the total proposed cost AND the change (delta) from the current infrastructure state.
8. Multi-Cloud Support: Remember that cost estimation works across AWS, Azure, and GCP resources within the same configuration.