It is undeniable that the adoption of the Cloud provided a series of advantages. We can definitely agree that the previously time-consuming process of configuring a server and hosting an application has been substantially simplified.
Today, with less than 10 interactions on a web console and a time of less than 10 minutes, it is possible to put an application on the air.
The phenomenon of mass migration to the Cloud was and has been remarkable. However, it is interesting to note that, in the midst of this “boom”, some companies are choosing to return to conventional hosting structures.
Given the obvious advantages provided by the Cloud, such as greater speed, quality and autonomy, one can question the reasons for this apparently contradictory decision.
A hidden point in the midst of these migration advantages is the cost. How did he end up? One of the phrases we've heard the most in recent times was that “Cloud is expensive”. So, the reflection remains: is Cloud really expensive? Does she have to be expensive? We've already shown that it's not!
FinOps helps reduce costs
Just as DevOps assists in the efficient automation and delivery of our application deployments, we have FinOps, which plays a similar role in the effective use of the Cloud in relation to its costs.
FinOps helps us understand and optimize the use of the Cloud, avoiding waste and keeping costs under control, using only the necessary resources. In this way, an efficient and responsible use of resources in the Cloud is guaranteed.
At FinOps, culture plays a fundamental role. Therefore, it is not enough to have a team focused on analyzing and reducing costs and using monitoring tools and alerts if the team responsible for the implementation and operation is not aware of the correct use of resources.
But he is also much more than that
It is a common mistake when it comes to FinOps to have as its sole objective the reduction of the final cost of the invoice. In reality, this cost reduction must be a natural consequence of a correct and optimized use of the Cloud.
Therefore, it does not necessarily involve “reducing” the amount of the bill. By setting goals of this type or similar, there is a risk of unduly restricting the use of resources in the Cloud, thus limiting the main advantages it offers and the success of its adoption.
It is important to bear in mind that the main objective of FinOps is to ensure efficient and effective use of the Cloud, maximizing the value delivered and avoiding unnecessary waste. This involves a balance between cost, performance, and value added to the business.
To address this topic, the FinOps Foundation, the foundation on which the issues of financial efficiency in the Cloud are put on the agenda, establishing some standards and methodologies to address the issue.
FinOps phases
The application of FinOps is often complex and extensive, as its concepts depend a lot on the organization's scenario, encompassing everything from technology to finance.
Because of this complexity, the FinOps Foundation created some methodologies (frameworks) that cover most cases. One of these frameworks is fFinOps bases — exactly the topic of this article, as it is a good place to start the diagnosis within your company.
The methodology has three phases: Information, Optimization, and Operation. Let's better understand each one of them:
Information Phase
It is the first phase of the cycle, since it is within it that we will have visibility of our costs and an understanding of the correct use of the Cloud in financial matters.
In this phase, visualizations will be created, both graphic (dashboards and panels, for example) and analytical (with reports and summaries), which provide all the information on the costs and use of the resources provided in the Cloud.
As this phase acquires maturity in the information, a great opportunity is the mapping and allocation of costs, made possible natively by the Cloud through TAGs in the resources.
At this point, we already have some data and facts about costs that we can base on the next actions, and that is when we enter the optimization phase.
Optimization Phase
In this more hand-on phase, the actions range from entering into negotiations with suppliers in search of contracts and discounts, to the technical part, in which some automations and optimization are developed.
The automations reside in this phase. It is possible to automate everything from data collection, to assist the other phases of the cycle (Information and Operation), to remediation, governance, and guardrails.
Operation Phase
Once we have the data on our cost efficiency and actions mapped and executed, the operation phase enters to ensure the continuity of these phases, measuring and generating metrics based on the results, generating governance.
It is very common for this phase to be associated with the FinOps culture within the company and the creation of KPIs for teams, based on cost efficiency.
And where can we start?
Knowing how the 3 phases of FinOps work, we can start more simply and, throughout each cycle, increase the entire FinOps process and maturity, using or not using third-party tools.
Today's largest CSP (Cloud Service Providers) already offer some tools for visualizing costs, from the invoice to the use of the resources and their detailed values, which can be extracted by external tools. From this, we have already been able to obtain our first views of costs.
As for the optimization part, once we have a clearer vision of what we should do, it's time to execute the mapped activities. At times, they will be conversations with the teams to better understand the costs encountered and, at other times, they mean the implementation of tools and/or scripts for automation - some of these automations are already ready natively within the Clouds.
And finally, we get into the operation part. With a better vision, we were able to help teams define goals to increase cost efficiency and how to implement processes to help govern the correct use of the Cloud from a cost perspective. In this way, regardless of the work model within the company, we were able to set goals for the teams.
Conclusion
FinOps, like any other work model, is cyclical and evolutionary. At each stage, we have the opportunity to perfect what worked and abandon what didn't work.
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