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FinOps

FinOps (or cloud FinOps) is an evolving cloud financial management discipline and cultural practice that aims to maximize business value in hybrid and multicloud environments.

FinOps is a portmanteau of finance and DevOps, emphasizing that IT, finance and business teams must collaborate to bring financial accountability to the cloud and make informed, data-driven decisions when managing tradeoffs between speed, cost and performance.1

There’s a misconception that FinOps means becoming cheap with cloud spend. Actually, FinOps is about removing blockers, empowering engineering teams to deliver better features, apps and migrations faster, and enabling a cross-functional conversation about where to invest and when. Sometimes a business will decide to tighten the belt. Sometimes it’ll decide to invest more. But with FinOps, teams know why they’re making those spending decisions.2

An operational framework and cultural shift that brings technology, finance, and business together to drive financial accountability and accelerate business value realization through cloud transformation.

  • FinOps enables enterprises to drive financial accountability and maximize business value
  • FinOps helps understand the complexity and challenges to traditional IT financial management
  • FinOps helps to identify the building blocks and key success metrics for business value realization

Components​

Visibility​

Having visibility into cloud spending is crucial. This involves tracking costs at various levels of granularity, understanding cost drivers, and identifying areas for optimization.

Accountability​

Assigning accountability for cloud costs within an organization helps ensure that teams are aware of their spending and are incentivized to optimize it.

  • Unit economics (per application infra cost)
  • Observability
  • Budgeting
  • Forecasting
  • Anomaly
  • Safety Net
  • Prevent sprawl of cloud spend

Governance​

Establishing policies and guidelines for cloud spending helps prevent unexpected costs and ensures compliance with budgetary constraints and regulatory requirements.

Optimization​

Continuously optimizing cloud resources to ensure that they are being used efficiently and cost-effectively. This may involve rightsizing instances, leveraging reserved instances or spot instances, and utilizing auto-scaling and other automation techniques.

There are three key areas of optimization:

  1. Resource optimization
  2. Pricing optimization
  3. Architecture optimization

Culture​

Fostering a culture of cost-awareness and accountability within the organization is essential for successful FinOps implementation. This involves educating teams about cloud costs and empowering them to make cost-conscious decisions.

Capabilities​

The FinOps Framework includes capabilities that cover everything from cost analysis and monitoring to optimization and organizational alignment, grouped into a set of related domains. Each capability defines a functional area of activity and a set of tasks to support your FinOps practice.

  • Understanding cloud usage and cost
    • Cost allocation
    • Data analysis and showback
    • Managing shared cost
    • Data ingestion and normalization
  • Performance tracking and benchmarking
    • Measuring unit costs
    • Forecasting
    • Budget management
  • Real-time decision making
    • Managing anomalies
    • Establishing a FinOps decision and accountability structure
  • Cloud rate optimization
    • Managing commitment-based discounts
  • Cloud usage optimization
    • Onboarding workloads
    • Resource utilization and efficiency
    • Workload management and automation
  • Organizational alignment
    • Establishing a FinOps culture
    • Chargeback and finance integration
    • FinOps education and enablement
    • Cloud policy and governance
    • FinOps and intersecting frameworks

Dashboards​

  • CUDOS Dashboard
  • Cost Intelligence Dashboard
  • KPI Dashboard
  • TAO Dashboard
  • Compute Optimizer Dashboard
  • Cost Anomaly Dashboard

Navigating AWS FinOps: Harnessing Cloud Intelligence Dashboards for Strategic Cost Optimization - DEVOPS DONE RIGHT

AWS Cost Optimisation / Billing​

  1. Spot.io - Save up to 80% cost on EC2 using Spot instances.
  2. Granulate.io - Optimise Kernel at OS level of a VM. Increase performance
  3. Cloud cost oberservability, visibility & optimization | Amnic
  4. CloudZero: The Cloud Cost Intelligence Platform