What is Cloud Cost Optimization? How to achieve this through FinOps

As public cloud services expanded their offerings, enterprises began to migrate their applications to the cloud, inspired by the promise of increased agility and flexibility combined with the cost-effectiveness of pay-as-you-go pricing. use.

Many quickly realized that running workloads in the public cloud brought with it a host of new financial challenges. Monitoring and reporting on cloud costs is now part of every team's to-do list.

While the cloud has been with us for a while, enterprises are struggling to control cloud costs. Businesses often spend 13% and waste 32% of their cloud investments.

This increased focus on cloud cost management and optimization has spawned a new discipline called FinOps. FinOps is a set of best practices that help engineering, finance, technology, and business teams work together in a cloud-based environment.

The hardest part of implementing cost reduction methods is convincing engineers to take cost into account. Engineers rarely made such decisions before the cloud, which offered quick access to resources on a silver platter.

It's no wonder that in today's economic climate, 81% of IT leaders have been instructed by their C-suite to limit or avoid increased cloud investment and focus on cloud cost optimization.

What is Cloud Cost Optimization?

Cloud cost optimization is the process of reducing costs and maximizing efficiency in cloud computing environments. This involves analyzing and optimizing the use of cloud resources such as storage, processing power, and network bandwidth to reduce costs while maintaining or improving performance.

Implementing cost optimization strategies allows companies to save money on their cloud infrastructure without sacrificing quality of service. Cloud costs can be optimized in several ways, including scaling, resource allocation, reserved instances, autoscaling, and more. How to optimize cloud costs

Streamlining your FinOps adoption is key to reducing cloud bills. Here are two key steps leaders can take to optimize their cloud costs:

1. Get Cost Visibility

The first step in building FinOps capabilities is to understand the cloud bill and identify the team, project, or department causing the overspending. Making cost information accessible to engineers in a way that suits their experience and habits helps increase cost awareness and provide solid metrics for planning new cloud initiatives.

Master cloud budgets

Cost tracking data helps gauge how quickly cloud budget is being spent and ensures your teams don't go over budget. Cost tracking involves looking at daily or weekly expenses and extrapolating them to reasonably approximate monthly expenses.

Find inconsistencies

Cloud services are dynamic. Things spiral out of control when your team can't access real-time pricing data. Tracking your cloud bills lets you check daily spend, spot anomalies, and take action before they escalate into major issues.

Know the true costs of the cloud

Many teams consider the cost of provisioned resources when developing cloud budgets. These are the prices that each cloud provider makes public. However, engineers sometimes over-provision their apps and work around the ceiling to make sure they're running smoothly and are always available.

This increases the actual cost of consumed resources. To avoid overprovisioning, consider the cost of requested resources rather than those already configured and get an accurate picture of your cloud spend.

Use engineer-friendly metrics and tools

Providing engineers with cost management insights in their preferred way builds cost awareness and helps them make better infrastructure decisions. Engineers are used to observability tools that monitor application performance in real time. Adding cost to the mix is ​​easy when you use cloud cost management software that integrates metrics with these operational tools.

Leverage historical cost data

Fifty-five percent of engineers take a...