FinOps: How your cloud costs decrease

In this country, optimism is not always the top priority. In this context, the Bitkom figures from January 2020 can probably also be classified: Across all industries, 58 percent of managing directors and board members considered their company to be a straggler when it came to digitization. 37 percent would not be able to cope with digitization, and twelve percent felt that their existence was threatened.

To achieve success, you should always first analyze which levers to use.
To achieve success, you should always first analyze which levers to use.
Photo: i photos – shutterstock.com

There is now a real danger that all efforts will be directed primarily towards new solutions. Basically, this is not wrong to take the first steps. A healthy error culture is important here: implement quickly, learn quickly and readjust continuously. And at this point it is important not to look back, but at least once to the left and right. Because as desirable as new digital business models are, the necessary cloud services cost money. And with all focus on design and UX, standardization and cost efficiency must not be neglected. In the end, readjustment does not just mean adapting the solution content, but also switching off services that are no longer used, for example – even if only temporarily.

The wild growth previously known in the hardware environment is now sometimes created in the cloud environment, and possibly even more easily. Accenture had published figures in 2019 as part of a study that made people sit up and take notice: Almost two thirds of the companies that migrated to the cloud would not fully achieve their goals – and in 43 percent of these cases, application spills were a reason for this.

Of course, this is unsustainable and must be prevented – especially in view of the increasing competitive pressure. Behind these efforts is the acronym FinOps, which describes cost optimization in the area of ​​cloud operations. As a CIO contribution shows, appropriate best practices for this were sometimes still rare.

In this context, it is remarkable that cloud is “less technology than the economic means of digitization.” With in-depth expertise from the cloud environment and many years of IT consulting experience behind them, impressive and measurable results can be achieved. The best practices used can be as simple as a sensible prioritization for harvesting the famous “low hanging fruits” and as complex as adding AI for advanced optimizations. The three basic levers are not rocket science:

  1. Visibility and control

  2. Resource optimization

  3. Governance

But how can these levers be used?

Of course, the analysis is also the first step when introducing FinOps. To do this, the current cloud environments must be viewed, comparisons with best practices and a strategy for optimization must be developed. So we literally turn on the flashlight and see what resources are already there. Afterwards, answers to the following questions should be found:

  • Where are business-critical priorities in processing?

  • What are the biggest cost drivers and how should they be dealt with?

  • What can be optimized quickly and easily?

Meaningful dashboards for project managers and board members are just as important as advanced analytics and artificial intelligence to make predictions for future cost developments. At this point it often happens that the initial success is celebrated without establishing continuous governance. But be careful: only those who remain consistent and disciplined can permanently reduce costs. Otherwise there would be a gradual increase. Such a “run phase” can usually be achieved in three months. This means that the OPEX effects can quickly be felt in the balance sheets.

Those who follow this path will, for example, be able to streamline subscriptions or identify and switch off unused virtual machines (VMs). Many premium services will also turn out to be no longer necessary. Orphaned managed disks can be tracked down. Experience has shown that savings of up to 30 percent can be achieved.

After such quick wins, it is also possible to optimize demand-driven consumption. This makes it easier to allocate storage resources or introduce auto-scaling mechanisms, for example. In this way, further cost reductions of up to 15 percent can be achieved. Resizing the cloud environment brings up to ten percent more, for example by resizing VMs, disks or services or combining them. The last 15 percent can be tickled out of financial optimizations.

“Evergreen Innovation” can prove to be the supreme discipline in continuous operation. Here, there is an ongoing search for optimization potential with the latest services and resources in the cloud. The services that produce the lowest CO2 emissions and at the same time meet the performance requirements can be used. FinOps becomes GreenOps – a valuable contribution to the current discussion about CO2 reduction.

Reading tip: IT climate killer or climate saver?

Measures, challenges, concepts – all of this is basically not that new. The difference is rather the area of ​​application. In this respect, the more experienced project teams are, of course, a big advantage. Many proven insights and methods can be used to reduce cloud costs through FinOps. Resource-saving operation with GreenOps is therefore no longer rocket science and should be an important part of every cloud project. So: tackle it! It is worth it .. (bw / fm)

Leave a Reply

Your email address will not be published. Required fields are marked *