FinOps: The Key to Cloud Cost Management

Waste and overspend are two of the biggest challenges with the cloud. It’s given way to a new discipline: “FinOps,” or cloud financial management. Here, I’ll explain what FinOps is, why it’s so important, and the one infrastructure change that can help you successfully control cloud waste and spend for good.

What Makes Controlling Cloud Spend So Challenging?

As I noted in a prior article on cloud waste, “What the cloud gives, it also can take away.” What I mean is that the velocity and scale of cloud adoption can too easily lead to chaos, cost, and complexity. The amount of money spent on unused or idle resources can be staggering. And the more workloads companies move, the more challenging it can be. Some companies are moving entire workloads back on-premises, and data gravity can make this a complex process.

A report from the FinOps Foundation found that the more a company tends to spend in the cloud, the more it needs help managing that spend. The FinOps Foundation estimates that 30% of the $300+ billion dollars that will be spent in the cloud will be wasted—often the result of purchasing for max capacity, not actual usage.

Where waste isn’t occurring, overspend often does. Say code is pushed out to a serverless compute environment, such as AWS Lambda. If a QA team doesn’t include capacity and cost in the testing cycle, an otherwise minor misconfiguration could trigger massive cost spikes when the code goes into production. That adds up, especially if costs are hitting close to a thousand dollars a day and it takes a week to identify the configuration error.

A few other things may be to blame:

• Cloud spend is not always a fixed cost. For one, cloud spend is not typically a fixed, CAPEX cost, like a traditional data center. It’s variable, dynamic, and fluid—especially as workloads become more mobile, moving to and from the cloud. OPEX models dilate this; however, some subscription models do help to cap spend.

• It’s easier (and faster) to procure cloud resources. It’s been said DevOps and the cloud have “broken traditional procurement.” When spend can accelerate from zero to hundreds of thousands of dollars in a few days, things can spiral. This is compared with months of hardware procurement and CAPEX expenditures that have well-established approval processes.
• Finance lacks familiarity with the cloud. It’s further complicated by the fact that finance teams lack visibility into cloud environments and a clear understanding of what they’re used for.

That’s why a majority of larger companies have begun to establish cloud finance roles in their organizations, according to the FinOps Foundation.

What Can FinOps Do?

Think of FinOps as a critical process, like bookkeeping for a small business or QA testing in a DevOps workflow. The work isn’t a one-time project—it’s ongoing and crucial.

Cloud FinOps is designed to remove the gray areas of cloud spend, give companies better visibility into cloud resource utilization, track spend against utilization, and generally help all parties optimize how the cloud is leveraged. Instead of having to hold each team accountable for monitoring their cloud usage and spend, FinOps takes this on—with a broader view across the entire organization.

When FinOps is closely aligned with development teams and finance teams, they’re best able to:

• Provide visibility into spend, with dashboards or utilization metrics reports.
• Find opportunities to optimize resources.
• Identify opportunities to eliminate or reduce spend—often using savings instruments or monitoring tools.
• Negotiate better rates or discounts.

Tips for Success with FinOps

The FinOps Foundation report suggests “to not only start the practice up, but to encourage and incentivize cloud users (like devs and engineers) to participate in cloud cost management.”

Other tips to consider:

• Adopt as-a-service models where you need more transparency into pricing, billing, and usage rates. This IDC report explains the business values of subscription or utility models, among which is improved cloud economics.
• Create KPIs to track against—total spend, cost savings goals, and utilization.
• Establish visibility into cloud spend before deploying infrastructure.
• Lean on automation, especially with right-sizing, estimation, scaling, and scheduling. Twenty-six percent of respondents stated a key FinOps challenge was accurate forecasting. One way to do this is with artificial intelligence for IT operations (AIOps), which is built into Pure1®. Pure1 offers smart capacity planning, making it easier to forecast data storage requirements in the cloud.
• Ensure data and workloads are mobile and accessible. Data gravity is real and a huge contributor to high costs. In some cases, moving a workload back on-prem is the best option, but you’ll need modern data storage that allows you to move workloads seamlessly. Snapshots and the Pure1 workload planner can help here, too.
• Schedule weekly review meetings. Include cross-functional team members and sync up to stay on track.

How to Win at FinOps with Pure Storage

Getting FinOps right isn’t just about creating a tiger team and hoping for the best. It will require equal parts people, process, and infrastructure.

The tips listed above can definitely help set you up for success, but there’s a critical component every hybrid or multicloud environment should have: better storage management capabilities. Pure delivers on this in a few ways.

Pure Cloud Block Store

enables you to reduce your overall cloud storage footprint with industry-leading data compression, thin provisioning, and deduplication. Pure Cloud Block Store has the ability to expand capacity non-disruptively, meaning you don’t need to have all of your capacity up and running immediately. And, you only use what you write, not what you provision.

Similarly, storage as a service like Pure as-a-Service

can also help to transform operating models and costs. When you can align your storage costs with your cloud costs, along with AIOps from Pure1 to help you scope, price, quote, negotiate, order, and install, you’ll only use the data services you need. Unlike some offerings that require long-term commitments and provide few benefits, this is a true storage utility, with cloud economic benefits rolled into a single subscription.

Staying on top of cloud spend can be a full-time job—and it often is. But at Pure, we believe data management should be effortless enough that it simplifies, not complicates, the way you manage your cloud spend.