FinOps has emerged as a valuable methodology for organisations seeking to optimise their cloud costs. It provides visibility, accountability, and improved resource management. Many organisations are on what is called rate optimisation, which is focused on getting discounts through Reserved Instances, Saving Plans, Volume discounts and EDPs. While these are good levers to pull, they can limit the amount you can save on your cloud bill because rate optimisation doesn't address waste. Eliminating unused resources and rightsizing does go some way to address waste, however, to truly achieve sustainable cloud cost control, you need to go a bit deeper. That is because FinOps assumes that all workloads are valid and provides business value, but this is rarely the case.
So, what can help?
1. Understanding utilisation and business demand:
FinOps often focuses on identifying and reducing overspending but may not always consider the efficiency of resource utilisation.
It's crucial to understand utilisation profiles in the context of business demand. Are you paying for resources that are not actively contributing to business value?
By analysing utilisation patterns and correlating them with business needs, you can identify opportunities to right-size resources, optimise spending, and potentially de-provision unnecessary workloads.
2. Matching service tiers with SLOs and SLAs:
FinOps may not always explicitly address the alignment of service tiers with Service Level Objectives (SLOs) and Service Level Agreements (SLAs).
It's essential to ensure that the chosen service tier meets the performance and availability requirements of your applications and workloads.
Overspending can occur when unnecessarily high service tiers are used for workloads that do not have demanding SLOs or SLAs.
By carefully matching service tiers to actual requirements, you can optimise costs without sacrificing performance or reliability.
3. Total IT spend and revenue:
It is essential to view cloud costs in the context of your organisation's total IT spend and overall revenue. Understanding this relationship helps assess the true impact of cloud spending on your business's financial health.
Are cloud costs growing disproportionately compared to revenue or total IT spend? This could indicate areas for optimisation or the need to re-evaluate cloud strategy.
By considering cloud costs in the broader financial context, you can make more informed decisions about resource allocation, budgeting, and overall cloud strategy.
Key Considerations for Building with Cost in Mind
Invest in cloud expertise: Build a team or partner with experts who possess a deep understanding of cloud architecture and can assess the cost-efficiency of your infrastructure.
Leverage observability: Implement robust monitoring and observability tools to gain insights into resource utilisation, performance bottlenecks, and potential areas for optimisation.
Prioritise cost efficiency in design: Make cost efficiency a primary design consideration from the outset. Choose architectures and services that align with your budget and performance goals.
Embrace automation: Automate routine tasks, such as provisioning, de-provisioning, and right-sizing, to improve efficiency and reduce the risk of human error.
Continuously review and optimise: Regularly review your cloud infrastructure and spending patterns to identify opportunities for improvement and adapt to changing business needs.
By addressing these missing pieces and incorporating these key considerations into your DevOps practices, you can build a cloud environment that is both cost-effective and performant.
If you would like to receive further information or chat to me directly, please reach out via jasoncross@capacitas.co.uk
