Blog July 4, 2019

The Rise of FinOps

Cost optimization of IT resources is one of the benefits that first attracts enterprises to the cloud. CFOs and CEOs love how converting CapEx to a more easily managed and predictable OpEx can help them gain tighter control over finances and free up capital for other investments.

Cloud computing can also help organizations better utilize their human as well as non-human resources. IT leaders love the idea of not having to staff and maintain an on-premises data center. Outsourcing IT responsibilities to a knowledgeable managed service provider means important tasks are getting done – and getting done right. IT leaders no longer have to deal with the shortage of qualified IT technicians in areas like IT security nor pay the six-figure salaries those roles command.

But, many organizations still struggle with cost optimization of cloud resources. The IBM Institute for Business Value recently surveyed over 1000 executives across 19 different industries and found that 85% of these execs leveraged multiple cloud environments across their organization; 98% of them expect to do so by 2021.

What is FinOps?

In a multi-cloud environment, different platforms and so many moving parts can make cost-optimization of cloud resources a challenge. This challenge has given rise to a new discipline: financial operations or FinOps. Here’s how the FinOps Foundation, a non-profit trade association for FinOps professionals, describes the discipline:

FinOps is the operating model for the cloud. FinOps enables a shift — a combination of systems, best practices and culture — to increase an organization’s ability to understand cloud costs and make tradeoffs. In the same way that DevOps revolutionized development by breaking down silos and increasing agility, FinOps increases the business value of cloud by bringing together technology, business and finance professionals with a new set of processes.

We expect to see an increasing number of enterprises, of all sizes, implement FinOps. For smaller organizations, this may just be one person, residing somewhere within the IT hierarchy. For a larger organization, it could be a team of individuals, with a leader reporting to the CFO.

6 Ways to Optimize Cloud Costs

If you’re a FinOps professional – or if you’re an IT or business leader concerned about controlling expenses – here are several ways to optimize cloud costs.

#1 Make sure you’re using the right cloud. Your mission critical applications might benefit from a private, hosted cloud or even deployment in an on-premises environment, but that doesn’t mean all of your workloads need to be deployed in the same environment. In addition, cloud technologies are getting more sophisticated all the time. Review your cloud deployments annually to make sure you have the right workloads in the right clouds.

#2 Review your disaster recovery strategy. More businesses than ever are leveraging AWS and Azure for disaster recovery. These pay-as-you-go cloud solutions can ensure your failover site is available when needed without requiring that you duplicate resources.

#3 Optimize your cloud deployment. If you’re deploying workloads on a cloud platform such as AWS or Azure for the first time, a knowledgeable partner who knows all the tips and tricks can be a real asset. It’s easy to overlook features, like Reserved Instances, that can help you lower monthly cloud costs.

Related post: 7 Signs You May Need Help With Your Azure or AWS Deployment

#4 Outsource some or all of your cloud management. Many IT departments are short-staffed with engineers wearing multiple hats. In the course of doing business, it’s easy for cloud resources to be underutilized or orphaned. The right cloud partner can help you find and eliminate these resources to lower your costs.

Related post: Is Development Driving Up Your Cloud Costs? (Add link if this gets posted prior to publishing this post. If not, just delete this.)

#5 Outsource key roles. Many IT roles, especially in areas like IT security and IBM system administration, are hard to fill. Although you want someone with experience, you may not even need them full-time. Instead of going in circles trying to find and recruit the right talent – only to lose them within six months to a competitor – consider outsourcing some of your IT responsibilities to a managed services provider.

“Adding headcount was not in our plan. We wanted to make sure we chose a partner that had a deep bench, so we didn’t have to worry about maintaining those skills in house.”

Brian White, Sr. Manager of Applications and Product Management, Red Gold Tomatoes

Read the full case study.

#6 Increase your visibility. Even if you decide to outsource some or all of your cloud management, you’ll still want to keep an eye on things. The TRiA Cloud Management Platform provides visibility across your cloud environments from a single console. In a follow up post, we’ll dig deeper into TRiA and talk about several more ways a cloud management platform can help you optimize cloud costs.

Related Resources

 
Can HIPAA Data Be Stored in the Cloud?
Healthcare organizations are increasingly being tasked with securely handling the vast amount of electronic protected health information (ePHI) they obtain through multiple forms of technology.…
 
Are Smartphones HIPAA Compliant?
According to Pew Research, 81% of Americans now own a smartphone, and many employers are implementing BYOD (Bring Your Own Device) policies, which allow workers…
 
Why You Should Build Automation into Your Cloud Migration Plan
When migrating to the cloud, many organizations focus on which cloud platform suits their workloads best and how they can keep their workloads secure and…