In the Cloud world, shadow IT and the reduction in centralized procurement, gaps in financial accountability and complex and changing cloud pricing structures rapidly led to financial waste resulting out of excess, redundant or unnecessary Cloud usage. Therefore, a well thought out Cloud cost optimization strategy has become critical because if Cloud usage is not monitored and managed appropriately, the Cloud costs tend to spiral out of control.
Effective Cloud financial management enables cost optimization, ensures better visibility of costs, provides more predictability and forecasting of costs, chargeback of costs to the various business units through effective tagging of Cloud resources and more efficient usage of Cloud resources by reducing waste or unused resources.
Some of the strategies enterprises are using include right sizing of instances, shutting down development and test instances when not in use, removing unused instances, usage of spot instances and automatic scaling of resources as needed.
Some of the strategies enterprises are using include right sizing of instances, shutting down development and test instances when not in use, removing unused instances, usage of spot instances and automatic scaling of resources as needed.
As companies increasingly move workloads to Cloud, it becomes important to plan for FinOps before the migration. One needs to look for value instead of just lower costs and understand the TCO of Cloud operations. FinOps needs to become an ongoing practice within the organization.
FinOps operates on key principles of Collaboration between teams, Defined Responsibilities and ownership of Cloud usage, Centralized team to drive FinOps, Timely and Accurate Reporting, Decisions driven by Business value of Cloud and leveraging the variable cost models of Cloud.
