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September 13, 2023

How to Achieve Cloud Cost Optimization with FinOps

In this new decade and time, many organizations and businesses, including the small and large, are now concerned with operations in the cloud. Immediately a company starts running, it might need to use services that involve moving to the cloud. In other scenarios, many businesses previously operating outside the cloud moved their workload there with the promise of a much more efficient way of operations.

While they might have achieved their goal of smooth and effective operations in the cloud, most businesses soon discover the enormous costs involved. Most times, lack of visibility makes these businesses pile up many cloud costs. So, in this article, you will learn what cloud cost optimization is and how you can use the best FinOps practices to achieve it.

What is Cloud Cost Optimization

The FinOps Foundation is the pioneer organization that provided clarity on Cloud FinOps definition and guide. From their definition of cloud FinOps, it is the management of cloud resources without lowering the operational quality of an organization.

Cloud cost optimization makes an organization use the best cloud resources without spending much or over the budget. In other words, cloud cost optimization is the process of maximizing the effectiveness and efficiency of cloud services and, at the same time, minimizing costs.

It often starts with a wholesome analysis of all the cloud products and services an organization uses — This analysis detects unused or underused services. Having a good knowledge of the services an organization uses and those they don't help make better optimization goals.

How to Achieve Cloud Cost Optimization with FinOps

FinOps is the best definition of operating at the highest level without sacrificing the quality of the services used by an organization. To achieve cloud cost optimization using FinOps, below are some steps to take.

Provide More Visibility On Services Used

One can't really get a good grasp of reducing the amount their organization spends on the cloud without first providing viability on the type of product they use. Providing visibility on cloud products and services used isn't limited to only one department, as it will involve every nook and cranny of the organization.

From the engineering department to the reception, insight should be provided on the type and number of cloud services they use. With this information, an organization can act on optimizing the amount they spend on cloud resources. Providing visibility on cloud usage in an organization will also be important in identifying compute resources that are running idle.

To achieve this, it will also involve looking at an organization's daily, weekly, and monthly budgets. Tracking the budget will give an organization an idea of how much they spend in the cloud and whether they are overspending.

Proactively Right-Sizing Cloud Resources

One of the first significant impacts of monitoring and providing visibility on cloud resources is rightsizing those resources. Apparently, the organization will now know how they spent large amounts of money on something they didn't need. For instance, some organizations use cloud services or products meant for 10,000 employees when they only have 500.

Rightsizing cloud resources shouldn't be passive; this can only be achieved through consistent monitoring. Using cloud optimization solutions like Globaldot proves quite effective in getting products that fit the size of a company.

Monitor for Cost Anomalies and Immediately Correct Them

Cost anomalies in cloud resources are when an organization suddenly deviates from its normal habit of cloud spending. Sometimes, this is usually during the period or season when there's heightened activity within an organization.

That's where monitoring is critical, as it helps an organization detect trend lines and make corrections immediately. Passively reacting to cost anomalies will make an organization lose more money.

Raise Cost Awareness Among the Company's Engineer

The engineering department of an organization is primarily where the influx of overspending on cloud resources comes in. The engineering department comprises many job titles, such as cloud engineers, architects, front and back-end developers, and many others.

Most times, these engineering job titles often open up new cloud services or products, abandon them after a few uses, and move on to another one. Educating the engineering department of an organization on the importance of reducing cloud costs will be very important. It will help them know not to leave resources idle and create better financial planning for cloud resources. Apparently, starting this awareness helps them understand that wastage is a bad habit and hurts the organization.

An Organization Should Keep an Eye on Idle Elastic IP Addresses

Amazon AWS provides organizations with about five elastic IP addresses to keep their services running, assuming there's a failure. They usually achieve this by automatically transferring and remapping IPS to other instances. However, leaving the elastic IP addresses idle is one of the contributors to high cloud costs.

This is because Amazon AWS charges these elastic IP addresses even if they are idle — So long as an organization is subscribed to the service, they will pay for it. If an organization does not need an elastic IP address, then it might need to reduce the number or cut it off entirely.

Automate Cloud Optimization Processes

An organization trying to do everything involved in cloud cost optimization manually is one of the recipes for failure. Manual optimization of cloud costs will often require the employees to label, allocate, and categorize services and cost anomalies.

This is incredibly hard to track, and any mistake can further harm what took a lot of time and effort to build. Therefore, an organization needs to automate many of its cloud optimization processes. An excellent way to go about this is using cloud cost optimization solutions like Globaldot to monitor, track, and recommend the best practices.

Wrapping Up

Cloud cost optimization using FinOps often involves an organization using the best cloud resources without wasting funds. In other words, the pinnacle of the organization's operations is now based on achieving effectiveness and efficiency without going over the budget.

It takes a lot of practice to stop an organization from overspending on cloud resources for their operations. These practices include maintaining visibility, identifying cost anomalies, and rightsizing cloud services. Furthermore, other solutions to cloud cost optimization are education, reducing idle IP addresses, and automation.

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