What is AWS Organization?

What is AWS Organization?

AWS Organizations helps you to consolidate and manage multiple AWS accounts within a central location. When you create an organization


7 min read

In today's digital landscape, where organizations are increasingly relying on cloud infrastructure to power their operations, managing multiple AWS accounts efficiently and securely has become a priority. AWS Organizations is a powerful service designed to streamline the management of multiple AWS accounts within an organization. In this blog, we'll delve into the features, benefits, and best practices of AWS Organizations, exploring how it empowers businesses to achieve greater efficiency and control in their cloud operations.

Why do you need AWS Organizations?

As your organization dives deeper into the cloud with AWS, the number of accounts you manage can quickly multiply. Development teams spin up accounts for projects, different departments require isolated environments, and mergers or acquisitions bring new accounts into the fold. This sprawl can lead to chaos:

  • Security nightmares: Inconsistent configurations and forgotten accounts create vulnerabilities.

  • Billing confusion: Sorting through individual account bills becomes a time-consuming headache.

  • Resource mismanagement: Underutilized accounts waste resources while others struggle with capacity.

Organizational Units

AWS Organizations helps you to consolidate and manage multiple AWS accounts within a central location. When you create an organization, AWS Organizations automatically creates a root, which is the parent container for all the accounts in your organization

In AWS Organizations, you can group accounts into organizational units (OUs) to make it easier to manage accounts with similar business or security requirements. When you apply a policy to an OU, all the accounts in the OU automatically inherit the permissions specified in the policy.

By organizing separate accounts into OUs, you can more easily isolate workloads or applications that have specific security requirements. For instance, if your company has accounts that can access only the AWS services that meet certain regulatory requirements, you can put these accounts into one OU. Then, you can attach a policy to the OU that blocks access to all other AWS services that do not meet the regulatory requirements.

How OUs help you manage your AWS accounts

  • Grouping by Function: Instead of mirroring your company's structure, OUs allow you to group accounts based on what they do. For instance, you can have separate OUs for Security, Development, Production, or specific applications.

  • Centralized Policy Application: Once accounts are grouped by function in OUs, you can implement Service Control Policies (SCPs) at the OU level. These SCPs define what services and actions users can perform within the accounts belonging to that OU. This simplifies policy management and ensures consistency across related accounts.

  • Resource Sharing: OUs enable you to share resources like Amazon S3 buckets or Amazon RDS instances across accounts within the same OU. This fosters collaboration within teams working on the same projects or functionalities.

Planning Your OU Structure

There's no one-size-fits-all approach to structuring your OUs. However, some best practices can guide your planning:

  • Start with Foundational OUs: Create initial OUs for Security and Infrastructure to centralize controls for these critical areas.

  • Workloads OU: Establish a separate OU for application workloads, with potential sub-OUs for different applications or environments.

  • Focus on Function over Hierarchy: Prioritize grouping accounts based on what they do rather than mimicking your company's reporting structure.

By following these practices, you can leverage OUs within AWS Organizations to create a well-organized and manageable multi-account cloud environment.

Benefits of AWS Organizations

AWS Organizations offers a centralized solution to manage your growing herd of AWS accounts.

1. Simplify Account Management

  • Effortless Onboarding: Invite new accounts or create them within your organization with a few clicks.

  • Centralized Governance: Define naming conventions and enforce IAM best practices across all accounts.

  • Consolidated Billing: Pay for your entire organization's cloud usage with a single bill.

2. Enhance Security and Compliance

  • Standardized Security Policies: Implement organization-wide policies to restrict actions, enforce encryption, and ensure service usage adheres to compliance standards.

  • Centralized Logging: Gain a bird's-eye view of activity across all accounts with services like AWS CloudTrail Lake for simplified auditing and security investigations.

3. Optimize Resource Allocation

  • Organizational Units (OUs): Group accounts based on function or project for targeted policy application and easier resource management.

  • Resource Sharing: Share services like Amazon S3 buckets or Amazon RDS instances across accounts within an OU for efficient collaboration.

4. Maintain Cost Control

  • Cost Allocation Tags: Track costs associated with specific departments, projects, or applications using tags for better budgeting and resource allocation decisions.

  • Consolidated Billing Reports: Analyze spending patterns across your organization and identify cost-saving opportunities.

Best Practices for AWS Organizations

Account Structure

  • Group by Function, Not Hierarchy: Organize accounts based on what they do (security, infrastructure, workloads) instead of mirroring your company's reporting structure. This allows for more flexibility and future changes.

  • Start with Foundational OUs: Create initial Organizational Units (OUs) for Security and Infrastructure to centralize controls for these critical areas.

  • Workloads OU: Establish a separate OU for application workloads (production, development, testing). Further, subdivide this OU for different applications or environments as needed.

Standardization and Governance

  • Use the Management Account Wisely: Reserve the management account solely for organization-wide tasks and don't store resources there.

  • Standardize Naming Conventions: Implement consistent naming rules for accounts, OUs, and resources for better organization and identification.

  • Enforce Security Policies: Utilize Service Control Policies (SCPs) to enforce security best practices and compliance standards across all accounts.

Cost Management and Optimization

  • Consolidated Billing: Leverage consolidated billing to simplify expense management and identify cost trends across your organization.

  • Cost Allocation Tags: Implement cost allocation tags to categorize resources and track spending by department, project, or application.

  • Rightsize Accounts: Regularly review account usage and adjust account types (free tier, paid) to optimize costs.

What is the AWS Service Control Policy?

A Service Control Policy (SCP) is a feature provided by AWS Organizations that allows organizations to establish and enforce central policies across multiple AWS accounts within their organization. SCPs help administrators control which AWS services and features are available to users and resources within each account, regardless of the individual account's IAM (Identity and Access Management) policies.

Here are key aspects of Service Control Policies:

  1. Scope: SCPs apply at the organizational level and affect all member accounts within the AWS Organization. They provide a centralized mechanism for administrators to enforce security, compliance, and governance policies across multiple AWS accounts.

  2. Restrictive Access Controls: SCPs operate by specifying the permissions that are allowed or denied for each AWS service or feature. Administrators can use SCPs to restrict access to certain AWS services, APIs, actions, or resources, helping to enforce security and compliance requirements.

  3. Hierarchy: SCPs can be applied hierarchically within the organizational structure defined by AWS Organizations. This means that SCPs applied at a higher level in the hierarchy affect all accounts below it, unless overridden by more permissive policies applied at lower levels.

  4. Precedence: SCPs have precedence over IAM policies. Even if an IAM policy grants permissions to a user or role within an AWS account, those permissions can be further restricted or denied by the SCP applied to the account or organizational unit.

  5. Enforcement: SCPs are enforced by the AWS Organizations service, which evaluates and enforces the policies across all member accounts. This ensures consistent policy enforcement and helps maintain a secure and compliant environment.

  6. Use Cases: SCPs can be used for various purposes, including enforcing regulatory compliance, preventing unauthorized access to sensitive resources, limiting access to specific AWS services based on business requirements, and maintaining security best practices across the organization.

Overall, Service Control Policies provide administrators with a powerful tool for centrally managing and enforcing access controls across multiple AWS accounts within an organization. By leveraging SCPs, organizations can enhance security, enforce compliance, and maintain governance standards across their AWS environment.


AWS Organizations stands as a cornerstone for organizations seeking to streamline the management of their cloud infrastructure. By leveraging its powerful features, such as OUs, SCPs, and consolidated billing, organizations can achieve greater efficiency, control, and security in their cloud operations. As businesses continue to embrace cloud technologies, AWS Organizations remains an indispensable tool for orchestrating multi-account environments and unlocking the full potential of the AWS cloud.

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