FinOps: Financial Optimisation of Cloud Architecture and Usage

Optimise the cost of your cloud environment Moving to the cloud allows a company to flex their computing and information ecosystem as their requirements change. Once your infrastructure is up and running, the next step is to map out how it's being used by different functions and departments. Costs can be optimised by tailoring the cloud infrastructure to the behavioural model of the organisation. This process, known as a FinOps audit, brings together finance, technology, and business functions to create a sustainable cloud cost/performance optimisation process.

Why FinOps: Loss of financial control, through procurement on demand Cloud infrastructure and software is costed differently than for on-premises data centers. It’s a world of OpEx instead of CapEx. DevOps and the cloud have broken the traditional procurement model, which is static and slow moving. Engineers are consuming IT budgets with few constraints and controls. As a result, engineers make financial commitments affecting their companies’ bottom line while budget owners struggle to keep up with the pace and granularity of spend.

TSL provides a FinOps audit service to identify changes in systems, practices and culture that can save considerable OpEx budget and restore financial control:

Measure usage: Usage isn’t simply a count of the number of services a company uses, each service uses different metrics to measure usage. For example, AWS EC2 instances are charged by the second, what matters is how long you run the instance. On GCP, PostgreSQL is charged by GB/month, so charged according to both quantity and time.

Identify realistic cost avoidance activities: Three of the most common cost avoidance activities are:

• Rightsizing is making sure that your cloud infrastructure uses resources that are “just right.” The infrastructure is neither over- nor under-provisioned.

• Automating takes advantage of the cloud’s elasticity by programmatically handling repetitive or hygiene tasks, such as shutting down resources that aren’t actively used. For example, a company might write a script that turns off instances that aren’t used over the weekend.

• Serverless implementation moving to serverless can make considerable savings to the overall OpEx of the cloud ecosystem.

Defining the metrics to measure success: TSL will work with the budget owners to define metrics that make sure cost avoidance and cost optimization activities are successful. For example are the RIs you have in place being used?

Create a closed loop FinOps lifecycle Just running an audit and identifying savings is not enough. What’s required is the creation of a closed loop, whereby FinOps becomes part of the DNA of the organisation. TSL works across all functions to build this closed loop integrating systems, people and processes. The FinOps lifecycle we promote covers the following phases:

• The Inform phase: Gives visibility of usage and createst shared accountability, by showing teams what they’re spending and why. This enables individuals to view the impact of their actions on the OpEx budget.

• The Optimise phase: Empower client teams to identify and measure efficiency optimisations. Goals are set upon the optimisations identified which align with each team’s responsibility.

• The Operate phase: Defines processes which enable the goals of technology, finance and business functions. Automation can be deployed which enables these processes to be performed in a reliable and repeatable manner.

Implementing FinOps Golden Paths A key part of the FinOps methodology implemented by TSL is to provide FinOps 'Golden Paths' for the clients engineers. These provide full documentation, together with example scenarios and code, so that moving forward, all platform engineering incorporated FinOps from the inception design.

The Bl dashboard and Golden Paths, together with increasing acceptance of FinOps is designed to put in place a process of ongoing FinOps governance, which hands back responsibility to individual departments. Which in turn have been able to fund new projects and innovations by finding savings in their existing AWS usage. Teams are better able to match instances to workloads using Amazon EC2 for secure, resizable compute capacity in the cloud, and using Amazon RDS to remove inefficient and time-consuming database administrative tasks.

TSL will work with the client to re-architect applications, supporting a longer-term shift to microservices and alternative application architectures including more use of serverless technologies like AWS Lambda and AWS Fargate.