Welcome to the next issue of the Tidy Cloud AWS newsletter! FinOps is about including cloud cost in engineering work for business value, and promoting collaboration.
Cloud costs may be part of project architecture, but often lack feedback and adaptation. More often, when costs are not as expected, there are specific tasks to optimize costs by dedicated people. The work then is to either optimize and cut costs, or to explain why costs are the way they are. After that, nothing particular happens until the next surprise in costs pop up.
We can do better than that, which is what FinOps is about.
FinOps combines Finance and DevOps, underscoring the significance of financial and business teamwork with developers and operations. A key goal behind FinOps is to optimize cloud spend to maximize business value.
This means establishing practices to get both engineering and business/finance “on the same team” and work together. Companies can appoint specialists in FinOps to assist with that.
Engineers must consider cloud costs in architecture and design. A FinOps practitioner would make it easier for software and finance teams to collaborate.
The FinOps Foundation website is a great resource for information on FinOps. There is a lot of good material available there that explains the ideas and principles behind FinOps. The foundation has a FinOps framework with roles, assessment, and learning material available.
The organisation also has a YouTube channel with plenty of videos and talks around FinOps.
The FinOps Foundation is organised under the Linux Foundation and has over 10000 persons as members from over 3500 companies.
The foundation has defined six FinOps Principles that guide the activities around FinOps:
- Teams need to collaborate. Teams in finance, product, engineering teams should work together, in near real time and for continuous improvement.
- Decisions are driven by the business value of the cloud. Value-based metrics and suitable unit economics to better show business impact. It is about business value, not cost cutting.
- Everyone takes ownership of their cloud usage. Engineers are accountable for usage and cost, and empowered to make their own decisions of usage against their budget. Cost is an efficiency metric to consider.
- FinOps data should be accessible and timely. Cost data should be processed and shared as soon as possible with stakeholders, with fast feedback loops and consistent visibility throughout the organisation.
- A centralized team drives FinOps. This is an idea of “Cloud cost center of excellence”, a centralized support team for the rest of the organisation around cloud cost matters.
- Take advantage of the variable cost model of the cloud. Look at the variable cost model as an opportunity to be agile and flexible to drive value, not a risk factor. Apply various techniques to be have fast feedback loops for iterative planning, change, and to be proactive.
FinOps is still a relatively young practice, and there is not a single answer to how to do this, but there is a good foundation to start from and adapt.
You can find older newsletters and more at Tidy Cloud AWS. You will also find other useful articles around AWS automation and infrastructure-as-software.
Until next time,