Cost optimization of IT resources is one of the benefits that first attracts enterprises to the cloud. CFOs and CEOs love how converting CapEx to a more easily managed and predictable OpEx can help them gain tighter control over finances and free up capital for other investments.
Cloud computing can also help organizations better utilize their human as well as non-human resources. IT leaders love the idea of not having to staff and maintain an on-premises data center. Outsourcing IT responsibilities to a knowledgeable managed service provider means important tasks are getting done – and getting done right. IT leaders no longer have to deal with the shortage of qualified IT technicians in areas like IT security nor pay the six-figure salaries those roles command.
But, many organizations still struggle with the cost optimization of cloud resources. 80% of companies using the cloud acknowledge that poor financial management related to cloud cost has had a negative impact on their business. This is where FinOps comes in.
What is FinOps?
In the cloud environment, different platforms and so many moving parts can make cost-optimization of cloud resources a challenge. This challenge has given rise to a new discipline: financial operations or FinOps. Here’s how the FinOps Foundation, a non-profit trade association for FinOps professionals, describes the discipline:
FinOps is the operating model for the cloud. FinOps enables a shift — a combination of systems, best practices, and culture — to increase an organization’s ability to understand cloud costs and make tradeoffs. In the same way that DevOps revolutionized development by breaking down silos and increasing agility, FinOps increases the business value of cloud by bringing together technology, business and finance professionals with a new set of processes.
We expect to see a growing number of organizations of all sizes using FinOps services as part of their business life cycle. This is irrelevant if you are a small company that uses one person from your IT team or a large enterprise using individuals, the responsibility, accountability, and involvement of the FinOps expert should enhance the use of cloud resources.
6 Ways to Optimize Cloud Costs
If you’re a FinOps professional – or if you’re an IT or business leader concerned about controlling expenses – here are several ways to optimize cloud costs.
#1 Make sure you’re using the right cloud. Your mission-critical applications might benefit from a private, hosted cloud or even deployment in an on-premises environment, but that doesn’t mean all of your workloads need to be deployed in the same environment. In addition, cloud technologies are getting more sophisticated all the time. Review your cloud deployments annually to make sure you have the right workloads in the right clouds.
#2 Review your disaster recovery strategy. More businesses than ever are leveraging AWS and Azure for disaster recovery. These pay-as-you-go cloud solutions can ensure your failover site is available when needed without requiring that you duplicate resources.
#3 Optimize your cloud deployment. If you’re deploying workloads on a cloud platform such as AWS or Azure for the first time, a knowledgeable partner who knows all the tips and tricks can be a real asset. It’s easy to overlook features, like Reserved Instances, that can help you lower monthly cloud costs.
#4 Outsource some or all of your cloud management. Many IT departments are short-staffed with engineers wearing multiple hats. In the course of doing business, it’s easy for cloud resources to be underutilized or orphaned. The right cloud partner can help you find and eliminate these resources to lower your costs.
#5 Outsource key roles. Many IT roles, especially in areas like IT security and system administration, are hard to fill. Although you want someone with experience, you may not even need them full-time. Instead of going in circles trying to find and recruit the right talent, the use of a professional service company with a wide knowledge base, that can give you the entire solution, it's a huge advantage and can save you a lot of money.
# 6 Increase your visibility. Even if you decide to place some or all cloud management, you still want to keep an eye on things. There are several platforms today such as Spotinst cloud analyzer that can address cloud management and provide visibility across all your cloud environments from a single console. Never the less, the use of these platforms should be part of the FinOps consultation.
Cloudride specialized cost optimization solution methodology which consists of two parallel capabilities.
Cloud FinOps - Our analyst will work with your technology and finance governance teams and will create, under best practices knowledge, a user-friendly dashboard divided per organization/tag/product / P&L or any other organization structure tailor-made to you.
Reporting per division on schedule weekly/monthly base.
Building a cost strategy - Spot, reserve capacity or on-demand and other valid saving capabilities, based on current and future technology needs - We will build a strategy for you.
To learn more about FinOps services, or just get some expert advice, we’re a click away.