Top 7 Cloud FinOps Strategies for Optimising Cloud Costs

According to a survey by Everest Group, 67% of organisations have more than 60% of their workload on the cloud. This global increase in cloud adoption has given rise to the tricky challenge of managing rising cloud costs. We call it tricky because of the complex pricing structures arising out of the numerous cloud providers. On the other hand, factors such as lack of cloud spend visibility, cloud cost wastage, lack of optimal resource utilisation, and lack of skilled personnel also pose a challenge to cloud cost optimisation.

These challenges are what have led to the advent of FinOps in cloud cost optimisation. Cloud FinOps is a methodology that combines financial accountability with cloud operations and over the recent years has emerged as a potent resource to tackle all the challenges mentioned above. Cloud FinOps models help businesses align their financial operations with their business objectives to get visibility into cloud usage and performance. It enables businesses to work with a more collaborative decision-making setup around IT assets usage. This helps finance and IT teams maintain financial accountability for the cloud service, get real-time insights into cloud performance, and build transparency.

In this article, we discuss the top 7 Cloud FinOps strategies that can leapfrog your cloud cost optimisation efforts.

1. Cloud spend monitoring and tracking

The first step towards building an effective cloud cost optimisation strategy is monitoring and tracking your cloud spending. Cloud cost monitoring is an umbrella term and can refer to tracking of any cost incurred by teams, services, instance types, and regions, across cloud environments. Monitoring costs against the consumption of resources enables you to keep a check on cost anomalies and avoid any unnecessary expenses. It also helps in identifying the origin of such expenses and any other lever including unused resources which can improve cost savings. The underlying benefit of cost monitoring is establishing visibility and accountability among teams, and correlating cloud costs with the business impact, which is the key to any business.

2. Cost optimisation through automation

Automation holds the key to quality cloud cost optimisation. From identifying and eliminating cost inefficiencies automation can do a deep scan of your cloud environment and identify cost-saving opportunities. It can ease resource usage monitoring, respond to deviations, and take coercive measures in case of usage exceeding predefined thresholds. Other areas where it is useful are:

a) Identifying unused or underutilised resources for recycling

b) Automate resource provisioning for scaling up/down based on demand

c) Dynamic resource tagging and cost attribution Overall, automation can bolster cloud transparency by mitigating risks related to human errors and significantly impact the overall cloud cost optimisation.

3. Invest in Cloud governance

Cloud governance is yet another important aspect of your cloud journey. FinOps Foundation, the leading governing body of Cloud FinOps states – “Cloud Governance is a set of processes, tooling or other guardrail solution that aims to control the activity as described by the Cloud Policy to promote the desired behaviour and outcomes”.

Cloud governance entails setting up rules and policies, defining roles and responsibilities, and adhering to cloud compliances. Effective cloud governance can ensure cloud security, efficient cloud deployment, risk management, legal compliance, data security, and overall a high level of cloud cost optimisation. Other noteworthy benefits are:

a) Improve visibility and business continuity

b) Regulate data access thereby mitigating security risks

c) Optimisation of cloud resource management

d) Automation by way of reducing manual tasks

4. Reserved Instances and Savings Plans

Reserved instances and savings plans are discount pricing models that can help you with significant cloud cost savings in comparison to on-demand pricing. Both of these allow enterprises to commit to a specific amount of cloud usage in exchange for a significant amount of savings. Each of these plans has unique advantages and should be evaluated according to the business needs.

By strategically leveraging these options, businesses can lock in lower rates for a specified term, ensuring predictable costs for steady workloads. This approach is particularly beneficial for applications with consistent and predictable resource needs, resulting in substantial long-term savings.

5. Leverage Cloud tagging and labels

Tags and labels are metadata attributes that cloud service providers widely use to attach additional information to cloud resources. They act primarily as key-value pairs, helping companies in the categorisation, and administration of resources within a cloud environment. By assigning a tag to each cloud resource, it becomes very easy to identify entities such as workload, business unit, or application thus streamlining your cloud costs. This further makes it convenient to allot, budget, forecast, and establish a culture of accountability.

Furthermore, tagging can aid in automation, and cost reporting and adds a very critical layer to cloud security by identifying sensitive data and workloads that need compliance regulations.

6. Right-sizing and Auto-scaling

Balance between workload demand and resource allocation is key to success in cloud cost optimisation. While cloud service providers offer hundreds of instance types, you must choose the most appropriate instance type and size for your workloads. This will also ensure that you do not overprovision which can add up to cloud cost waste.

Similarly, auto-scaling will ensure that your cloud resources are allocated dynamically by real-time demand and pre-determined policies. Auto-scaling will scale up your resources during the peak hours and scale down during the lull hours, which can be a critical factor in your cost optimization. Broadly speaking, the following are the benefits of right-sizing and auto-scaling:

a) Cost-savings

b) Dynamic resource provisioning

c) Seamless traffic handling

d) Optimised performance

7. Build a culture of accountability and cost awareness

Finally, a successful cloud cost optimisation journey pivots on bringing together cross-functional teams, each committed to the cause of FinOps. Cloud centres of excellence must be set up to establish FinOps best practices and mutually decide the current cloud health and key performance indicators (KPIs). Raising cost awareness across these cross-functional teams and lines of business is crucial to drive this cultural shift.

Assembling a cost-conscious team of dedicated professionals, regularly reviewing the cloud strategy, fostering collaboration, adopting the latest technology, and promoting continuous improvement will help in the long-term success of cloud cost optimisation. Conclusion The strategies discussed above can bolster your Cloud FinOps initiatives and facilitate a culture that encourages accountability, adaptability, and responsibility. By building a holistic framework, organisations can optimise their cloud costs without compromising performance or scalability. Finally, by embracing these strategies, companies can realise the full potential of their cloud investments.

Aman Aggarwal
+ posts

Aman heads CloudKeeper, a holistic Cloud Cost Optimisation and FinOps solution that helps customers get guaranteed savings of up to 25% on their entire bill. He has 15+ years of experience in the Cloud & DevOps domain and holds strong technology & financial business acumen. An AWS Certified Professional Architect and a Certified Scrum Master, Aman has been working along with the AWS team to help 300+ customers in their cloud adoption and cost optimisation journey. He drives the strategy, P&L, and roadmap for CloudKeeper while managing a highly talented product engineering team along with AWS Certified DevOps professionals, architects, and Cloud Economics experts.

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