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Cloud Cost Optimization Cloud FinOps

Cloud FinOps FAQs

Cloud has become an integral component for successful business operations. However, alongside the benefits of cloud computing come the complexities of managing costs effectively. Enter Cloud FinOps, a discipline aimed at optimizing cloud spending while maximizing value. It continues to be one of the top cloud priorities in 2024 and the coming years. As organizations embark on this new journey, numerous questions arise regarding FinOps practices. This article covers a few with responses from our cloud finops experts themselves Kathick Perumal, Product Engineering Head and Mukesh Kumar, our Product Architect who holds profound experience in tackling cloud finops challenges of our clients.

1. What is Cloud FinOps?

Cloud FinOps is a practise which enables organization to maximize the value derived from their cloud resources spending.

2. What does Cloud FinOps do?

It offers multiple benefits to the cloud businesses. In a nutshell, it enables developers, operations, finance, and other business teams in comprehending and managing costs associated with cloud computing.
Suggested Reading: What are the benefits of cloud finops?

3. Why is Cloud FinOps important?

Cloud finops is vital for various reasons. It is crucial in solving some of the key challenges like,

  • There is a lack of accountability and control over the cloud spending.
  • Absence of continuous cloud resource tracking and monitoring
  • Failure to implement optimal practices for cost reduction.
  • Delay in problem identification and rectification costs huge.
  • Loss of control over cloud asset growth as the organisation scale up.
  • Difficulty in finding the best cloud resource alternatives.

4. How Cloud Service Providers help in Cloud Cost Optimization?

CSPs do give us a lot of options through which we can realize considerable savings.

  • Pay-as-You-Go Pricing: Cloud services often follow a pay-as-you-go model, allowing users to pay only for the resources they consume. This flexibility helps in cost optimization by avoiding upfront costs for unused resources.
  • Reserved Instances: Cloud providers offer reserved instances or commitments, where users can commit to a specific number of resources for a term, often at a discounted rate compared to on-demand pricing.
  • Spot Instances: Some cloud providers offer spot instances, allowing users to bid for unused compute capacity at a lower cost. This can be cost-effective for certain workloads that are flexible in their resource requirements.
  • Auto-Scaling: Cloud platforms allow for automatic scaling of resources based on demand. This ensures that you only use and pay for the resources you need when you need them, helping to optimize costs.
  • Resource Monitoring and Management Tools: Cloud providers offer tools that allow users to monitor resource usage and costs in real-time. This visibility helps in identifying areas for optimization and cost savings.
  • Discounts and Incentive Programs: Cloud providers often provide discounts for long-term commitments, volume usage, or specific use cases. Additionally, they may offer incentive programs to encourage cost-conscious usage.
  • Cost Management Services: Cloud providers offer cost management and budgeting tools that help users set, track, and manage their spending. Alerts and reports assist in keeping costs within predefined budgets.
  • Global Presence: Cloud providers have a global network of data centers. Utilizing resources in regions where costs are lower or taking advantage of content delivery networks (CDNs) can result in cost savings.

5. What are the easiest ways to control cloud costs?

While there are many, enterprises miss to leverage some of the simple options available in hand,

  • Wherever possible, use reserved instances rather than pay-as-you-go instances.
  • Remove unused or idle resources by continuously monitoring the resources all the time.
  • Optimize the application architecture to maximize data ingress and egress. Ingress is free. But egress is chargeable based on the size of the data you transfer.

6. Is it possible to save money without compromising the performance?

Yes, a lot of cost savings can be achieved by continuous monitoring and optimizing your cloud usage for orphans and unused resources. Beyond reducing you can even witness improving performance levels.

In CloudCADI, we monitor for Orphan/Unused Disk, Public IP Address, load balancer, SQL servers, NAT gateway, Application Gateway, etc.

7. What are the trivial things that impact largely in cloud costs?

Well, there are many. They might seem small at the early stages of cloud adoption. The team’s focus will be more on the project, deliverables, and deadlines forgetting the fact that every resource they install/download start accumulating the bills either they use it to its fullest or not.

Examples are, leaving unused resources that are not actively contributing to operations, inefficient resource sizing, neglecting to properly tag and organize resources for cost allocation, etc. These can bring impacts like, wasting money on excessive resources or experiencing performance issues due to insufficient resources, difficulties in tracking and attributing costs to specific projects or departments.

8. What are the possible ways to overcome cloud costs?

  • Setting up notifications for out-of-the-ordinary spending or usage habits.
  • Optimizing cloud resource allocation for maximum efficiency.
  • Making use of rightsizing approaches to match resources to actual demands.

You can rely on CloudCADI for all these needs. It does a phenomenal job.

9. Finops Consultants or FinOps Tools?

The choice between FinOps consultants and FinOps tools depends on various factors, including the specific needs and circumstances of the client’s organization.

FinOps consultants bring in-depth knowledge and expertise in FinOps practices to the organisation. They can provide personalized approach by taking a holistic view of the organization needs.

While on the other hand, Finops tools brings multiple advantages, like automating certain aspects of cloud cost management, make the process less human error prone, continuous monitoring, detailed break downs and reports.

10. Why FinOps is an organization wide practice?

We always insist this to our customers. FinOps is not constrained to the cloud engineering division, it’s  an organization wide cross functional collaborative practice. It involves all three hierarchies – engineering team, operations team, and finance team. Every stakeholder requires a solid information on the cloud usage, performance, and cost in their terms. So that they become accountable of their choices and can map it to their relevant goals.

Do you have any more questions? Write to us: Contact Amadis Experts

Authors

Product Engineering Head
Karthick Perumal - Product Eng. Head
Product Eng. Lead Amadis
Mukesh Kumar - Product Architect
Categories
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.

Categories
Cloud Cost Optimization Cloud FinOps

Benefits of Cloud FinOps:Top 5 Reasons Why Should You Implement Now

“95% of new digital workload deployment will be cloud-native by 2025 – Gartner”

Cloud FinOps benefits have been trending in the cloud industry for quite some time now. Pandemic, scalability, flexibility, and gaining a competitive edge are a few reasons which fostered the businesses to lift and shift their infrastructure to the cloud at the earliest.

The Cloud migration team considers various factors while planning the roadmap for the whole migration process. They invest ample time and effort in assessing all the applications, selecting the cloud providers (GCP/Azure/AWS/etc.), checking their security frameworks, compliance, and planning the cloud talent, maintenance, and support.

One key factor that they to miss notice is, if the bills they pay the Cloud Service Providers are only for the cloud assets the business intended and adding value.

What is Cloud FinOps?

Cloud FinOps – “Cloud Financial Operations”, is an organization wide practice that brings financial visibility and realization of an organization’s cloud spending. So every cloud stakeholder becomes financially accountable of their cloud resource choices that aligns technology investments effectively to business goals. Cloud FinOps offers a plethora of benefits other than this. Let’s see in this article in detail why is it quintessential.

Check out this short video to understand what is cloud finops.

What are the benefits of cloud finops?

1. Alleviates uninformed Decisions

“You may be overspending on your cloud!”

Without proper monitoring of cloud resources spending, costly business decisions are less clear and can have negative or suboptimal business impacts. Real-time data insights and granular reports from Cloud FinOps products allow business leaders to

      • Compare the enterprise cloud resource utilization by time

      • Understand business units that require more resources

      • Get service level cloud utilization

      • Monitor resources that are left idle or underused.

    This accommodates LOB managers to optimize their cloud utilization with a clear understanding of the financial implications of their decisions. They take ownership of their cloud usage.

    2. Brings Cultural Shift

    Every cloud consumer should be able to easily obtain and understand cloud usage and spending data. Unaggregated data can make it extremely difficult for teams to clarify and implement cloud-consuming best practices. 

    Businesses today are increasingly migrating and spending on cloud resources. While many firms may feel that they are taking the necessary precautions to understand and handle this growth, they may be doing only the bare minimum, leaving resource management teams frustrated.

    With the adoption of Cloud FinOps, firms can now optimize their cloud consumption environment in the best conceivable way and create a culture that benefits all cloud-consuming parties.  

    Suggested reading: How to plan an effective cloud cost optimization plan? – Explained Step by Step

    3. Bring a unified ecosystem

    unified ecosystem
    Image Source: Agilitypr

    There is an invisible complex and frustrating culture split between DevOps, IT, and Finance teams in every enterprise. Request, approval, and intimation processes differ from each other even though they all work towards a common business goal. Certain terms and jargons make no sense to the other team (ex: containers allocation, VMs count). Moreover, the finance team loses its guardrails on cloud infrastructure procurement as the cloud engineering team step into the process.

    Cloud FinOps products aid them to stay updated on their cloud cost optimization based on their roles and responsibilities.

    Example: Finance team can view the cost data and reports of the resources while the engineering team can view the processer utilization details.

    This ensures smooth operations by transforming into a unified, effective, efficient ecosystem.

    4. Empower cloud engineers

    Engineers prefer cloud to traditional on-premise data centers as it accommodates scalable architecture, flexible design, as and when required storage allocation, etc. Applications that involve complex calculations demand more storage space. They focus more on agile, faster deployment, and bug-free delivery rather than worrying about storage space availability, computing power, and cloud resource availability. This may lead to unnecessary conflicts between the engineers and the cloud management team. It has the potential to restrict the liberty of engineers to explore and innovate while the cloud management team spends on resources that add no value addition to businesses. Bringing Cloud FinOps into the operations empowers both by having clear visibility and control over the resource utilization.

    5. Ensure streamlined process

    Every business has its own mission and vision. Strategies may change as per the demands and challenges we come across, but the goal is to progress in the right direction amidst all odds. Cloud adoption indeed aids businesses to stay abreast of their competitors. Neglecting the fact of cost-benefit analysis after the migration process, will let the business stay where they are and pay the same bills or more.  Cloud FinOps introduce financial prudence among the teams. Beyond, Cloud FinOps products like CloudCADI provide intelligent recommendations on how the cloud engineers can alter; rearrange; rebuild their resources/tools for an optimized cloud environment. This ensures streamlined business progress with contribution from everyone. 

    Other Added Benefits of Cloud FinOps

    6. Drives Cost Optimization

    Introducing cloud finops as a practice, drives cloud cost optimization throughout the organization. Rather than scaling up the VMs or EC2 or any machines based on its availability, they now choose based on the business needs. This in turn ensure every penny spent on cloud is leveraged.

    7. Ensures alignment with business goals

    Adopting cloud finops ensures the allocation and utilization of cloud resources are in harmony with overall business goals and priorities. This ensures that the technology infrastructure fosters rather than hinders the path towards company’s vision to success.

    8. Helps Risk Mitigation

    Cloud FinOps practice helps to mitigate financial risks associated with the use of cloud services. As we monitor and  manage costs closely like tracking expenses, analyzing usage patterns, identifying areas for cost optimization, businesses can proactively identify the potential financial risks such as budget overruns, inefficient resource allocation  and uncontrolled expenses.

    9. Fosters Continuous Improvement

    Cloud environment is dynamic with changing business requirements and evolving technology requirements. Iterative optimization is necessary where organizations regularly review their cloud spending patterns, identify areas for enhancement and implement changes for sustainable business. FinOps effectively accommodates this and assures operational efficiency. 

    10. Emphasize budget control

    Cloud FinOps practices emphasizes the importance of setting and controlling budgets for cloud spending.  By establishing  clear budgeting guidelines and thresholds, organisations can proactively manage and control their cloud expenses. This in turn allows to maintain financial discipline.

    Whom can you trust for your Cloud FinOps?

    “Newfound Understanding and Growth Through CloudCADI”

    Experience the benefits of Cloud FinOps with CloudCADI, a cloud financial management solution by Amadis Technologies, to partner with you and take hold of your cloud consumption habits while optimizing for future business growth!

    Transparency

    CloudCADI’s single pane view offers simple, yet information-dense charts and graphs detailing cost, performance, and utilization of all enterprise cloud resources consumed via IaaS / SaaS / PaaS models

    Actionable Insights

    CloudCADI offers complete analysis and recommendations for Azure services. Recommendations are made through the analysis of multiple parameters. An average of 6% – 12% monthly savings has been achieved by our clients who have adopted and utilized CloudCADI’s features.

    Non-Intrusive

    CloudCADI resides within the client’s public cloud environment without any third-party agents, eliminating the security breach threats. 

    Other Key Features,

    • Externalized Business Rule Engine: It allows users to play around as per their unique requirements.
    • Showback: It allows you to drill down and find the root cause of the cost overruns to take immediate actions.
    • End-to-End Automation: It facilitates the seamless integration of ticketing tools like ServiceNow.
    • Role based analytics: CloudCADI facilitates role-based visibility to dashboard.
    • Alerts: It has customizable reporting& alert capabilities to give visibility over IaaS/SaaS/PaaS services and assets, resulting in a better understanding of activities in the cloud

     

    CloudCADI enables cloud consumers to be the best they can be

      • Cloud Optimization 
      • Performance Efficiency  
      • Operational Excellence  
      • Actionable Insights 
      • Intelligent recommendations

    Book a demo to know more about CloudCADI features and call our experts for pricing. We will show you how one solution can enable you to leverage your entire cloud environment.

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