Cloud Cost Management: Early Adoption & the Evolution of FinOps

By: Shannon Kuehn, Managed Solutions Architect

By now, most organizations have some variety of cloud presence, particularly in recent years as cloud computing dramatically sped up what used to take longer to achieve with line-of-business and commercial off-the-shelf applications. In general, cloud computing spans across three major services: infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), and software-as-a-service (SaaS). Enterprises of all sizes rushed to innovate on all three, all the while deferring cost, optimization, policy, and configuration, to a later date in time. In this article, we’ll contextualize some of the early challenges related to cloud and introduce FinOps as an emerging methodology for optimizing cloud environments and managing costs.

The Early Problem of ‘Lift & Shift’

A common approach involved the ‘lift and shift’ cloud adoption methodology, where organizations essentially took their on-premises environments and replicated and cut servers over into their cloud provider of choice. The frequent problem with this approach, however, is that many of these environments were over provisioned on-premises. Over provisioning isn’t a bad thing on-premises because the traditional on-premises hypervisors share resources accordingly. But, in the cloud, the provider takes the metadata received during replication and provides a “like for like” virtual machine SKU without realizing said machine may not really need 16GB of RAM and 4 vCPUs (for example).

This ‘lift and shift’ exercise typically resulted in cloud sprawl, leading many executives to wonder if the allure of the cloud was really a far-fetched dream. Further, the processes of optimization and cost management require significant time and effort, which is not nearly as fun as spinning up the software-defined resources offered by major cloud hyperscalers.

The Introduction of FinOps

So, what can enterprises do now, particularly as the ‘lift and shift’ approach has presented unwelcome challenges? For many, the answer is embracing a FinOps, or Financial Operations, methodology. The FinOps Foundation Technical Advisory Council defines the term as “an evolving cloud financial management discipline and cultural practice that enables organizations to get maximum business value by helping engineering, finance, technology, and business teams to collaborate on data-driven spending decisions.”

While there are certainly some general best practices for FinOps, organizations typically require some sort of tool, a series of automated scripts, or templates to help them get going in the FinOps and optimization space. In most cases, finding a comprehensive tool is an easier starting point than building or stitching something together with code. Harness is one such cloud cost management tool whose entire software suite offers a modern software delivery platform.

Using Harness, AHEAD employs a FinOps management process that promotes shared responsibility for an organization’s cloud computing infrastructure and costs. This practice, which helps to both reduce costs and optimize environments over time, provides organizations with immediate visibility into their cloud spend and allows them to attain the level of maturity needed for continued growth and innovation.

Over the course of this blog series, we will explore methods for achieving a better cost management posture by focusing on new workload budgets and alerts, overall cloud budgets and alerts, ongoing reclamation activities, and untagged asset reviews—all of which is essential to ensuring that defined processes drive operational activities throughout the organization as they relate to FinOps.

Stay tuned for the next article or get in touch with us to learn more.

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