The article “How FinOps Helps with Cloud Forecasting” explores the challenges organizations face when trying to predict costs in the cloud and how FinOps can provide a solution. The move to the cloud has made cost forecasting more complex due to the granular nature of usage-based costs. Matt Stellpflug, a FinOps specialist at ProsperOps, explains that cloud costs are not just about compute and storage, but also factors like data transfer and access fees. In this article, Stellpflug discusses how engineers can implement FinOps to establish reference workloads and benchmarks, making it easier for organizations to predict and control cloud costs. The article provides insights into using FinOps and offers best practices for optimizing cloud cost management.
Triage Problems and ‘Do the Low-Hanging Fruit’
When it comes to implementing FinOps, engineers play a crucial role. As the protectors of application availability and uptime, they are responsible for ensuring the integrity of the system. Therefore, it is essential to involve them in any FinOps initiative. To effectively work with engineers on a FinOps effort, it is important to collaborate with them and ask for their input on the key metrics they care about.
According to Matt Stellpflug, a senior FinOps specialist at ProsperOps, engineers should prioritize triaging problems based on risk and impact. This involves identifying areas of excessive resource consumption and addressing the high-impact, low-risk items first. By “doing the low-hanging fruit,” engineers can quickly eliminate inefficiencies and optimize resource usage. However, it is important to note that tackling high-risk, high-impact items may require engagement from subject matter experts and a longer timeframe to resolve.
Maintaining momentum throughout the FinOps cycle is crucial. While addressing complex problems may take time, it is important to continue making progress by also addressing easier tasks. This iterative approach ensures that optimization efforts are ongoing and allows for continuous improvement in managing cloud costs.
Identify Key Metrics with Engineering Team
In order to effectively implement FinOps, collaboration with the engineering team is crucial. Engineers have a deep understanding of the systems and applications, making them valuable contributors to identifying key metrics. By involving them in the process, organizations can gain insight into the specific metrics that are important to monitor and optimize.
Stellpflug emphasizes the importance of working with the engineering team to understand which metrics matter most to them. This collaborative approach ensures that the FinOps efforts align with the goals and priorities of the engineering team. It also allows for a better understanding of the impact that different metrics have on the overall cost and performance of the system.
By involving the engineering team in the process of identifying key metrics, organizations can gather valuable insights and ensure that the FinOps strategy is tailored to their specific needs.
Difference Between Resource Optimization and Rate Optimization
When it comes to optimizing cloud costs, it is important to understand the difference between resource optimization and rate optimization. Resource optimization focuses on optimizing the usage of resources such as compute, storage, and network. It involves identifying areas of excessive resource consumption and finding ways to reduce it without compromising performance.
On the other hand, rate optimization involves optimizing the cost of using those resources. It focuses on understanding the pricing models of the cloud provider and finding ways to minimize the cost per unit of resource usage. This may involve strategies such as reserved instances, spot instances, or leveraging discounts offered by the cloud provider.
Both resource optimization and rate optimization are important aspects of FinOps. By optimizing both resource usage and cost, organizations can achieve better cost efficiency and ensure that they are making the most out of their cloud investments.
Best Practices to Implement FinOps
Implementing FinOps requires a systematic approach and adherence to best practices. Here are some key best practices to implement FinOps effectively:
- Identify areas of excessive resource consumption: Conduct an analysis to identify areas where resources are being underutilized or wasted. This can involve monitoring resource usage patterns and identifying inefficiencies.
- Triage based on risk and impact: Prioritize the optimization efforts based on the level of risk and impact they have on the system. Focus on addressing high-impact, low-risk items first to achieve quick wins and demonstrate the value of FinOps.
- Engage subject matter experts for high-impact, high-risk items: For complex optimization challenges that require specialized knowledge, involve subject matter experts who can provide guidance and support. Their expertise can help in finding the most effective solutions for addressing these challenges.
- Maintain momentum and iterate: FinOps is an ongoing process, and it is important to maintain momentum throughout the cycle. While addressing complex problems, continue to tackle easier tasks to ensure continuous progress and improvement.
By following these best practices, organizations can establish a strong foundation for their FinOps initiatives and achieve better control over their cloud costs.
Identify Areas of Excessive Resource Consumption
One of the key steps in implementing FinOps is the identification of areas of excessive resource consumption. This involves monitoring and analyzing resource usage patterns to identify areas where resources are being underutilized or wasted.
By conducting a thorough analysis, organizations can identify inefficiencies and areas for improvement. This can include instances where resources are provisioned but not fully utilized, or where resources are being used inappropriately or inefficiently. By identifying and addressing these areas of excessive resource consumption, organizations can optimize their resource usage and reduce unnecessary costs.
Tools and techniques such as cloud monitoring and analytics can be used to gather data on resource usage and identify areas of concern. This data can then be analyzed to understand usage patterns, identify outliers, and make informed decisions about optimizing resource consumption.
By proactively identifying areas of excessive resource consumption, organizations can take targeted actions to optimize resource usage and reduce costs.
Triage Based on Risk and Impact
When implementing FinOps, it is important to prioritize optimization efforts based on risk and impact. This involves categorizing optimization opportunities based on their potential impact on the system and the level of risk associated with addressing them.
High-impact, low-risk items should be prioritized as they offer significant potential for cost savings with minimal risk to the system. These items typically involve optimizing resource usage, eliminating wasteful practices, or implementing efficiency improvements that have a direct impact on cost reduction.
On the other hand, high-risk, low-impact items should be addressed last. These items may involve changes or modifications that carry a higher level of risk and may require additional resources or expertise.
By triaging optimization opportunities based on risk and impact, organizations can focus their efforts on the areas that offer the greatest potential for cost savings while minimizing the risk of system disruptions or negative impacts on performance.
Prioritize High-Impact, Low-Risk Items
In the context of FinOps, it is advisable to prioritize high-impact, low-risk items when implementing optimization efforts. These items offer significant potential for cost savings while presenting minimal risk to the system.
High-impact, low-risk optimization opportunities typically involve optimizing resource usage, identifying and eliminating inefficiencies, or implementing best practices that can lead to substantial cost reductions. Examples of high-impact, low-risk items include rightsizing underutilized resources, implementing automated scaling based on demand, or leveraging cost-saving opportunities offered by the cloud provider.
By prioritizing these high-impact, low-risk items, organizations can achieve quick wins and demonstrate the value of FinOps to stakeholders. This can help build momentum for further optimization efforts and secure support for ongoing FinOps initiatives.
Engaging subject matter experts for High Impact, High-Risk Items
For high-impact, high-risk optimization opportunities, it is important to engage subject matter experts who possess specialized knowledge and expertise. These experts can provide valuable insights and guidance in addressing complex challenges that require deep understanding of the system architecture, performance requirements, and optimization techniques.
Subject matter experts can help organizations navigate through the complexities of addressing high-impact, high-risk items by providing recommendations, conducting in-depth analysis, and proposing feasible solutions. Their expertise can help mitigate risks and ensure that optimization efforts are effective and aligned with the organization’s goals and objectives.
Engaging subject matter experts also contributes to knowledge sharing and capacity building within the organization, enabling teams to develop the skills and competencies needed to sustain ongoing FinOps initiatives.
By involving subject matter experts in the optimization process, organizations can leverage their knowledge and experience to maximize the impact of their FinOps efforts and achieve optimal results.
Maintain Momentum and Iterate through the Cycle
Maintaining momentum is essential for the success of FinOps initiatives. The optimization journey is an ongoing process, and it is important to keep the momentum going by continually identifying new areas for improvement and addressing them in a timely manner.
While it is important to tackle high-impact, high-risk items, it is equally crucial to maintain progress by addressing low-hanging fruit and quick wins. These smaller optimization opportunities contribute to continuous improvement and provide tangible results that can motivate and inspire the team.
To maintain momentum, organizations should establish a cycle of continuous improvement and iteration. This involves:
- Regularly assessing and monitoring resource usage: Continuously monitor resource usage patterns and identify opportunities for optimization.
- Prioritizing optimization efforts: Prioritize optimization opportunities based on their potential impact and resource consumption.
- Implementing optimization strategies: Take action to optimize resource usage, reduce costs, and improve efficiency.
- Evaluating and measuring results: Assess the impact of optimization efforts and measure the effectiveness of implemented strategies.
- Iterating and refining: Learn from the results and feedback, and refine the optimization strategies based on the insights gained.
By maintaining momentum and iterating through the optimization cycle, organizations can continuously improve their cost management practices and achieve greater efficiency in their cloud operations.
Conclusion
Predicting cloud costs can be challenging due to the granular nature of cloud usage and the complexities of pricing models. However, implementing FinOps can help organizations gain better visibility into their cloud costs, optimize resource usage, and achieve cost efficiency.
To successfully implement FinOps, it is important to involve the engineering team in identifying key metrics and prioritizing optimization efforts. By triaging optimization opportunities based on risk and impact, organizations can focus on high-impact, low-risk items that offer significant cost savings. Subject matter experts can provide valuable guidance for addressing high-impact, high-risk items, while maintaining momentum and iterating through the optimization cycle ensures continuous improvement.
By following best practices and adopting a systematic approach, organizations can implement FinOps successfully and gain better control over their cloud costs. This allows them to make more informed decisions, optimize resource utilization, and achieve cost efficiency in their cloud operations.
