FinOps
...how to survive your cloud bill
Hi,
My name is Kuba Holak
Engineering Lead @ Nordcloud, an IBM Company
AWS Community Builder
FinOps certified practitioner
🐦 @kubaholak
My name is Kuba Holak
Engineering Lead @ Nordcloud, an IBM Company
AWS Community Builder
FinOps certified practitioner
🐦 @kubaholak
High cloud bill is always a bad thing
Mature DevOps is possible without financial accoutability
Cloud Economy 101
IT in DCs
CapEx
IT in Cloud
OpEx
DevOps
~$400B
by 2022
Cloud Spend
Capital Expenditures (CapEx) are investments made by an organization for long-term benefits in the future. Computers, servers, and other hardware needed for on-premises data centers are all examples of CapEx.
Operational Expenditures (OpEx) are the ongoing costs related to day-to-day operations. A subscription fee for cloud services is considered OpEx—the cloud provider is making the infrastructure investment upfront, and you only pay for the resources you need as you need them.
DevOps & Cloud have broken traditional procurement...
...engineers are making money decisions in the real-time
Steven
- Works in the automotive industry as the CIO for one of the biggest enterprises.
- 20 years of experience in managing IT.
Steven used to have everything under control...
...but DevOps and Public Cloud changed the game
How can Steven change the current state?
- Limit cloud access for the engineers, use service catalog, and embed approval process in buying cloud capacity (aka bring back the procurement)
- Change how the whole company operates in terms of IT spend and embrace the cloud even further (aka FinOps)
Traditional procurement
Engineers need servers
⇒ they create buying request
⇒ finance approves
⇒ servers are bought every 1 or 3 years
Engineers are requesters
Finance are approvers
Spend is predictable and static, but long procurement cycles kill the agility and is prone to mistakes
Cloud spend model
Engineers write code =>
deploy and create infra daily =>
generate cost
No Finance Approval
No central place to control the costs, short cycles, cost structure changes dynamically
DevOps maturity assumes self-service
Self-service DevOps is a way to enable developers to deploy applications on demand all by themselves
DevOps maturity assumes self-service
Cloud bill grows, bill shock ⇒
Figure out AWS Bill ⇒
FAIL ⇒
Kill the direct access ⇒
R.I.P DevOps
DevOps maturity assumes self-service
“All companies are software companies”
The CEO of Microsoft, Satya Nadella
Agile & DevOps are proven and efficient approaches to software engineering, but those are not only for your "IT department" - companies are agile, not single teams.
If a single team is adopting DevOps in a non-agile friendly company - will most probably fail.
You can try FinOps
FinOps is...
- Culture, best practices, and model of actions
- Enablement for distributed product, finances, and business teams
- Make decisions that are the best from a business perspective
FinOps is...
...not about saving MONEY
VALUE is what matters the most
Principles
Teams need to collaborate.
- Finance moves at the speed and granularity of IT
- Engineering considers cost as a new efficiency metric
- Continuously improve for efficiency and innovation
- Defined governance and controls for cloud usage
Everyone takes ownership for their cloud usage.
- Empower feature and product teams to manage their own usage of cloud against their budget
- Visibility into cloud spend at all levels
- Team-level targets and tracking to drive accountability
A centralized team drives FinOps
- Centrally govern and control Committed Use Discounts, Reserved Instances and Volume/Custom Discounts with Cloud Providers
- Centralized discount buying process removes rate negotiations from engineering team consideration
- Granular allocation of all costs, direct or shared, to the teams and cost centers responsible for them
Reports should be accessible and timely.
- Fast feedback loops result in more efficient behavior
- Visibility helps determine if resources are under or over-provisioned
- Automation of resources drives continuous improvement
Decisions are driven by business value of cloud.
- Trending and variance analysis helps to understand why costs increased
- Internal team benchmarking drives best practices and celebrates wins
- Industry peer-level benchmarking determines how your company is performing
Take advantage of the variable cost model of the cloud.
- Rightsizing instances and services help drive appropriate resourcing levels
- Comparing pricing between services and resource types drives better decisions
CLOUD SPEND = USE X RATE
Optimize rates globally
Reservations, discounts and commitments
Optimize use locally
In 2021, companies will waste over $17 billion in cloud spend on idle and excess resources, according to DevOps.com. Many organizations are finding that as much as 40% of their cloud spend is sunken into over-provisioned and unused infrastructure.
What challenges do FinOps teams face?
Cloud Waste Categories
- Over-provisioned
- Orphaned
- Idle
FinOps maturity
Which teams are driving the costs?
Are they being efficient?
Can you link their costs to unit metrics?
FinOps maturity
Look at what tags are in place and what they are reporting.
Look at coverage gaps.
Consider how to allocate untaggable or shared costs.
FinOps maturity
A spreadsheet to keep your mappings
Cadence-based syncing with your CMDB.
API integration between your FinOps platform and your CMDB.
A FinOps endgame
Unit Economics
(...) Each time your bill goes up, the debate reopens about whether the spend is good or bad. Has the bill increased due to growth in your business? Is it because of the acceleration of cloud migrations? Or has it gone up due to inefficient patterns of usage creeping back into your teams’ habits?
Storment, J. R.; Fuller, Mike. Cloud FinOps . O'Reilly Media.