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Cloud Cost Optimization Cloud FinOps Cloud Resources Management

Cloud cost optimization – Steps to make note of – Part 1

Cloud cost optimization is a practice any organization should adopt to ensure they SPEND RIGHT on the cloud. We have discussed what are the benefits of cloud cost optimization in the past. Let’s see what are common challenges in implementing the same and how to overcome them in this article.

Common Cloud Cost Optimization Challenges

While cloud cost optimization offer remarkable benefits, there are number of challenges that organization might face when trying to achieve the optimal savings. To mention a few,

  1. Lack of visibility into cloud costs : Without proper monitoring and analysis, it can be challenging to identify areas where cost optimization is required.
  2. Lack of expertise: Many organizations do not have dedicated cloud finops professionals or resources for managing cloud expenses.
  3. Lack of continuous monitoring: Without consistent monitoring, organizations might miss the opportunities for savings at the right time.

Now let’s see one by one how to overcome these below,

Step 1: Arm them

Every cloud stakeholder should be armed with documents, tutorials, training, guidance, and tools to effectively handle the cloud environment. FinOps products should have the ability to provide graphical representation and reports on cloud usage. Reports should facilitate the stakeholders to dive deep into granular pod level, node level, business unit level, tag level usage, associated cost details, etc. 

For example, our product CloudCADI offers reports and trend charts covering parameters like

  • CPU utilization
  • Memory
  • Disk Read
  • Disk Write
  • Storage Disk Read
  • Storage Disk Write
  • Network Received
  • Network Sent
  • Storage 

These reports should equip the cloud practitioners with the necessary cost information for effective decisions.

Step 2: Herd them

One of the major challenges the enterprises face is cross-functional transparency. There may be two app development teams developing two different cloud-native applications without knowing that they both use different monitoring tools that satisfy the same purpose. Procurement teams go with a vendor based on the options provided by the cloud teams and better negotiation with the vendor. They have little or no interest in the usage of the tools by diverse teams.

It is crucial to identify these common requirements and consolidate the resources accordingly. 

Step 3: Pivot on center

Cloud management is a tricky process. Cloud involves the operations team, finance team, cloud engineers, cloud architects, the procurement team, LoB managers, C-suite executives, etc. conveying a different message. Requirements vary from time to time. Organizations should have a centralized cloud cost optimization/FinOps team to mitigate the differences. Any cloud financial decision like buying new licenses, renewal, going hybrid cloud, etc., before reaching the CXO’s office should pass through the FinOps team’s scan.

After a thorough scanning of real needs and expectations, costs and business value mapping should be carried out. Once it is acknowledged, it should reach the decision maker’s table for approval. 

Related Reading: FinOps principles

Step 4: Analyze your cloud

Optimizing starts with analyzing. Review your organization’s cloud usage and spending patterns. This helps to identify the areas that needs restructuring or elimination and develop a targeted cost optimization strategy. You can either do this with a dedicated FinOps team or an effective cloud finops solution like CloudCADI.

Step 5: Retire the unused

There are resources that secretly weigh the cloud bills. Cloud practitioners set up auto-scaling to ensure enough capacity to face the traffic demands and improved cost management. Let’s consider Azure GPU machines. For high-end remote visualization, ML, and deep learning, GPU category, N-series virtual machines are ideal.

They accommodate low latency, high-throughput network interface for graphics or video-intensive workloads. When the engineers miss out on calculating the right number of nodes and configure in excess, the organization ends up paying for these zombie nodes.

For example,

Azure Instance NC12 with 1XK80 GPU offering 12 vCPUs costs $1.8 per hour. Consider 10 such instances counting 120 vCPUs configured but 5 left unused. At the end of the month, you need to pay $13140 instead of $6570 to Azure midst of no accountable benefits. 

It is hard to identify these nodes until you address these in the line items of lengthy cloud bills. For larger organizations handling several applications, identification and mitigation go out of manual efforts. Options left with us are to manually plan and closely watch the configuration process, identify the unclaimed assets, and retire (which is not always feasible) or to go with cloud cost optimization products.  

Step 6: Leverage services from your CSPs

Cloud Service Providers(CSPs) provide various cost saving options to facilitate clients in saving their cloud investments. Savings plans, discount on bulk scaling, reserved instances are a few options to make use of and realize significant cost savings.

Organizations tend to lose millions when they miss out on optimizing their new workloads along with the previous. Select a FinOps solution that runs along with your vision, each day dragging everything under one umbrella.

Keep optimizing. CloudCADI is with you!

Find this useful? Read Part 2 of Cloud Cost Optimization Steps here.

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Cloud Resources Management

Cloud Tagging – Strategic Practices

Enterprises using public cloud assets need a well-thought public cloud tagging of assets, an inventory model to achieve the highest level of visibility, and utilization, thereby robust mechanisms to ensure minimal wastage. It is vital for all organizations at scale.

“The wider the cloud adoption, the more complex is the cloud cost management”

According to NASSCOM, enterprises are expected to increase their cloud budget by nearly 5-15% CAGR till FY 2025. Selection, allocation, tracking, and monitoring of the cloud resources that seem simple and manual during the initial cloud adoption stages will turn into a headache when cloud assets number multiplied by hundreds.

The Cloud infrastructure management team can make use of “Tagging” and bucket the resources under a tag defining their function in the cloud. Any cloud practitioner can easily call, filter, and organize the resources using their tags.

Even the leading cloud service providers, Microsoft, AWS, and GCP emphasize tagging as the best practice to effectively sort and ally FinOps. We covered the benefits of FinOps in our previous article. Let’s see in this article,

  • What is Cloud Tagging?
  • Benefits of Cloud Tagging
  • Cloud Tagging best practices
  • Cloud CADI & Cloud Tagging

What is Cloud Tagging?

Cloud tagging is the practice of assigning custom names to cloud resources. Its nomenclature varies from organization to organization based on their teams’ preferences and ease.

Cloud tag comprises two – Key and Value. Key conveys the categories (ex: Environment, Owner) and Value conveys the meta description (ex: Testing, Priya)

Example: Environment: Testing

Key – Environment

Value- Testing

Key and Value can be case-sensitive or insensitive based on the service provider. For example, In AWS, both keys and values are case-sensitive whereas, in Azure, keys are case-insensitive, and values are case-sensitive.

What are the benefits of Cloud Tagging?

Structured resource allocation:

Enterprises opt for the multi-cloud environment for improved efficiency. Cloud resources procured from different vendors when contributing to a common project can be tagged under one label. In this way, no cloud resources are left unused.

Streamlined governance: 

Cloud tagging introduces organized cloud resource management in the organization. The Cloud infrastructure management personnel tend to lose control of the track of assets while handling multiple workloads deployed in multiple projects. Cloud tagging helps LOB Managers, CIOs, CTOs, and CFOs easily associate and understand resources with their business value, usage frequency, time of operation, and cost.

Team-specific reports generation:

 It is crucial to identify which team involves which resource to optimize the cloud utilization. Cloud tagging helps to drill down the cloud usage specific to business units. Reports help the engineering team to assess and alter workloads. This further helps the finance team to understand which team consumes more cloud budget and frame solutions along with the other teams to curb the bills.

Aid automation: 

Automation in the cloud relieves the burden of the cloud team in handling repetitive tasks. In an agile environment, businesses should be able to scale down or up the storage bandwidth, CPU utilization, or change configurations quickly as the demand rises.

Tags allies in automating the actions like sending notifications to cloud engineers on resources that are idle for a given period; automating the storage for a specific environment(testing); automatic decommissioning or provisioning of bulk resources.

Resource access management:

 Security is still a debating factor in the cloud. Tag-based access control can alleviate data breaches and ensure the confidentiality of sensitive data transacted over the cloud. For example, we can actively allow the developing team to access only the resource with the tag, environment: dev (user-defined tag).

Traceback the roots:

CTOs and CIOs report, that finding the source for cloud spending is a daunting task in cloud infrastructure management according to Economic Times. Tagging helps to find the specific team or resource that is critical and runs for a longer duration eating most of the infrastructure budget. Once it is identified, restructuring, or rebuilding the workload brings down the unintended cloud expenditures.

Cloud Tagging Checklist

Even though cloud tagging policies vary from business to business, it’s important to make them standard and globalized across the enterprise. So that it makes sense to every team handling cloud. Defining the rules for cloud tagging during the deployment itself mitigates anomalies in the future.

It’s confidential! – Never include sensitive data to be in the tags. 

Why do you need it? – Defining the tagging needs brings better resolution in meta-describing the resources. Stakeholders responsible handling, maintaining, tracking, and improving the tags should collectively define the use cases and name tags accordingly.

Make it speak for itself – Ensure that the naming convention carries all required information like a business unit, region, unique resource identifier, criticality, etc. enough to help the business team, engineering team, and CXOs in locating, and tracking, and cost optimizing the workloads.

Consistency is the Key– Once the tag schema is developed, it is important to stick to it. The person handling the tags should be cautious while defining, improving and update the same in the rules.

Example: Env: nztesting01 is different from Env: testingnz01

Minimum suggested tags– Cloud giants like Azure, GCP, and AWS recommend below as the minimum suggested tags to include for an effective tagging process,

  • workload name
  • Data classification
  • Operations commitment
  • Operations team
  • Cost center
  • Cluster
  • Version
  • App id
  • Disaster recovery
  • Service class
  • Start date of a project
  • Owner name
  • Business unit

Tag naming limits – Have a watch on the character limits before naming your resources. Key-Value character limits vary based on the CSP you choose. For example, the Key character limit is 1-63 with UTF-8 encoding for GCP whereas, it is 1-128 for AWS resources. Key and values should contain only lowercase letters, numeric characters, underscores, and dashes in GCP. Tag keys and values are case-sensitive in AWS.

Related reading: AWS cloud tagging best practices

CloudCADI & Cloud Tagging

CloudCADI is a one-stop solution for all your FinOps shortfalls.  It pulls off all your hidden cloud resources bundling up your cloud bills without any productive output. This financial visibility in the organization makes the employees feel accountable.

CloudCADI makes use of cloud tags to enhance your cloud experience in one go.

Our Recommendations:

1. Cloud practitioners name resources before deploying them into the services or app or any other function. We suggest our clients include at least five fields in their naming convention for easy identification and filtering.

Example,

cloud tagging best practices

2. Adding multiple tags to one resource leads to multiple filters to fetch the exact resource utilization and cost data.

Examples,

Owner: Priya (person responsible for the resource)

Platform id: AZR

Region: AU (Australia)

Zone: E (East)

Our flagship product gives you comprehensive reports on the unused, under-utilized, and over-provisioned resources using tags

cloudcadi dashboard
Cloud CADI – Tag filter screenshot

Tag-based reports are detailed and specific. CloudCADI gives a simple virtual representation for a quicker overview. It allows you to further filter out and point out any resource contributing to the cloud waste.

We can implement custom automation scripts to automate the scale-up, shut down, or any repetitive cloud tasks saving manual labor.

We don’t stop right there. CloudCADI gives “intelligent recommendations” with which you can immediately realize the benefits. Our actionable insights facilitate you with the best alternatives along with the cost savings report to decide immediately.

Start leveraging now. SPEND RIGHT on cloud.

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