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FinOps Culture for Cloud Cost Optimization

Cloud Cost Optimization

Today, organizations have the experience of migrating and managing the cloud. With a significant number of workloads migrated, organizations now have the necessary cloud skills to address them with the best cloud security practices and an inbuilt cloud computing operating model.

So, what’s next? What can be done to maximize the value of the cloud? How to bring about solid cloud financial hygiene?

In 2022, more than $1.3 trillion in enterprise IT spending is at stake from the shift to cloud, growing to almost $1.8 trillion in 2025, according to Gartner.

While the union of cloud technologies and agile development gave us DevOps, the addition of security tools and automation gave us DevSecOps.  During cloud migration, the cloud cost management can become strenuous in the transition if the success metrics of cloud adoption are not properly defined and measured. Most of the time cloud operations team focuses on keeping the applications, software, and infrastructure uptime leaving behind the cost implication to run on the cloud. Over a period, customers are performing cost optimization which is more reactive than proactive. The most common challenge we see during cloud operations is getting engineers to act on cost optimization and having a  clear communication plan. Another challenge is the visibility and accountability of the cloud spent.

But what exactly is FinOps and how it is important in cloud operations?

FinOps is a next-generation cloud financial management and culture which starts with visibility on cloud spending. It is not a one-time process but a continuous effort that needs to be defined, implemented, and measured to bring cloud cost hygiene. While CloudOps focuses on managing and running infrastructure in the cloud, FinOps focuses  on the practice of managing cloud cost.

The FinOps foundation has designed a framework to facilitate FinOps practice, which includes principles, personas, domains, and phases. The maturity of FinOps implementation in cloud operations is assessed using the KPI metrics that define the adoption state in the FinOps maturity model. These metrics include implementing tools and empowering organizations to practice FinOps through training.

The FinOps journey is based on the See, Save, Plan, Run model and includes three iterative phases, that are:

Inform Phase – This is the first phase in the FinOps journey. It focuses to have visibility, allocation, benchmarking, budgeting, and forecasting on cloud spending for the organizations and their teams.

Optimize Phase – This phase will focus on optimizing the cloud services with various optimization levers based on the analysis. For example, through rightsizing, organizations can cut on any wasteful/unused resources by purchasing RI, etc.

Operate phase – In the operating phase, organizations start to continuously monitor and measure the KPI metrics against business objectives.

FinOps is one of the critical aspects for successful cloud operations apart from other areas such as automated cloud infra management, asset management and security. Adopting FinOps in cloud operations can mature by defining, measuring, and refining the KPI and metrics. In many aspects of cloud operations, metrics and KPIs, is a journey where you try to improve them over a period.

FinOps metrics should be defined and measured on key areas of cloud operations which includes:

  1. Accountability & Enablement – Set up a percentage metric on how many people are being trained and certified on FinOps.
  2. Tagging & Allocation – Set up a percentage metric of how much cloud spending is tagged to the stakeholders.
  3. Cost Optimization – Percentage of cost savings after optimization.
  4. Planning & Forecasting – Metric on accuracy based on the actual spend vs predicted spend for a month.
  5. Tools & Accelerators – Metric on Percentage of automation performed which resulted in cost savings.

With KPI and metrics defined and measured along with the application of FinOps principles, it will help organizations to optimize cloud consumption and boost business outcomes and ROI. While the Cloud operations team focuses on keeping the workloads on the cloud up and running, the FinOps team will focus on controlling the cost of the cloud. FinOps foundation says it is all about making money and not saving it by following FinOps practices. It provides governance and accountability during cloud operations. By practicing CloudOps and FinOps culture we can build transparent and defined processes which will help to keep cloud costs at a minimum.

Happiest Minds FinOps solution can help businesses in adopting FinOps practice and cost optimization through its certified experts and 4E framework in a phased approach. The organization has FinOps experience in a multi-cloud environment and has built its own accelerators such as maturity templates, actionable plan templates, and automated policies which provide rapid reduction and optimization. Our certified experts can assess your FinOps maturity level through workshops, build business cases and provide both short-term and long-term roadmaps on cost optimizations.

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