Custom Allocation Rules

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Overview

Custom cost allocation allows you to showback or chargeback your costs by attributing selected costs to relevant business dimensions. After you have set up allocation rules, you can report on which costs were allocated by a rule.

Custom cost allocation runs after Tag Pipelines, enabling allocations based on user-defined tags. Costs are allocated on a daily basis, and can be applied to Cloud Cost metrics from AWS, Google Cloud, and Azure.

Rule creation

Access the Custom Allocation Rules section under Cloud Cost settings to establish rules. Choose from the following allocation methods:

Allocation Method	Description	Examples
Proportional	Costs are allocated based on the proportional spend of destination values.	Untagged support costs are allocated to teams `teamA`, `teamB`, and `teamC` based on their proportion of total spend, for example, on `aws_product:ec2`.
Even	Costs are allocated evenly to your destination tags.	Untagged support costs are allocated evenly to teams `teamA`, `teamB`, and `teamC`.
Custom Percentage	Costs are allocated based on custom percentages for the destination tags.	Untagged support costs are allocated 60% to `teamA`, 30% to `teamB`, and 10% to `teamC`.

Allocation methods

Costs are allocated based on the proportional spend of destination values. Apply a filter to refine which part of the bill determines the proportions.

Diagram illustrating the proportional split strategy

The proportional split strategy as seen in Datadog

Partitioning

You can also specify how cost proportions should be partitioned to ensure segment-specific allocations. For example, if you partition your costs by environment using tags like staging and production, the proportions are calculated separately for each environment. This ensures allocations are based on the specific proportions within each partition.

With the even strategy, costs are allocated evenly towards your destination tags, regardless of any other spend. Similarly to proportional allocation, you can further customize your allocation by setting filters and partitions.

Diagram illustrating the even split strategy

The even split strategy as seen in Datadog

With the custom percentage strategy, you can define static custom percentages for the destination tags you select. For example, if you have 3 destinations (teamA, teamB, teamC) you can allocate 60% to teamA, 30% to teamB, and 10% to teamC.

Specify what costs are included in the allocation

Step	Required	Examples
Select the cost provider	Yes	AWS, Google Cloud, Azure
Define the costs to split (source)	Yes	`aws_product` contains `support`, `allocated_spend_type` is untagged
Define the destination	Yes	`team` is `teamA`, `teamB`, `teamC`
Filter by	Only applicable for Proportional and Even strategies, optional	`aws_product` is `ec2`
Partition costs by	Only applicable for Proportional and Even strategies, optional	`environment` is all values
Name	Yes	allocate_untagged_support_costs

Managing rules

Rules can be modified and deleted in the Custom Allocation Rules section of the Cloud Cost settings page. All fields except for the rule name can be reconfigured.

Rules are applied in the same order as shown in the list.

Visualize your allocations

Changes to dynamic allocation rules may take up to 24 hours to be applied. After being applied, the new allocations can be seen throughout Cloud Cost Management. Dynamically allocated costs also include an allocated_by_rule tag, denoting the rule name that applied the allocation.