What is FinOps
FinOps is a relatively new concept in a cloud computing area. It’s actively developing and being implemented to help companies adopt a cloud environment in a smart, secure and transparent way.
FinOps brings together the ideas of engineering teams and financial departments to establish a transparent and defined process, when private or public clouds of different cloud providers in multiple locations are used optimally and consider cost, performance, capacity and company perspectives. It helps to build a process of constant optimization, improve cloud usage experience, control cloud resources and their expenses.
FinOps is not about saving some money on your cloud IT infrastructure. This methodology aims to build an effective cloud environment to ensure the quickest and most profitable business growth, enable more productivity, new features releases and higher ROI. FinOps is all about profitable, flexible and agile management, as well as successful and meaningful collaboration among departments, such as engineering, financial and management. It is a continuous process of improvement on all IT processes in order to identify and remove bottlenecks and blockers, enable engineering teams to update products faster, implement cloud migration strategies in a timely manner and fully identify when you’re in the red or when it’s time to invest more.
Why businesses today move to public clouds
Businesses are interested in moving to the cloud for a number of reasons. Perhaps the most common is the fact that public clouds grant businesses with a tremendous amount of external, remote resources at a remarkably lower cost than it would take to implement physical infrastructure of the same scope. Connecting to the public cloud can technically be done in an instant, while physical implementation of the same amount of computing power would require planning, ordering equipment, receiving the order, unpacking it, setting up by the IT team and then ongoing maintenance. In the same sense, many operations are choosing to shift their infrastructure away from their current physical setup and into the cloud, cutting the costs of owning and maintaining physical servers and other hardware and, at the same time, increasing their virtual bandwidth.
How starting FinOps prevents you from unpredictable cloud bills and helps build an effective cloud usage experience
Even if you have switched from CapEx to OpEx using public cloud and have already optimised your expenses, you must be aware of having more saving opportunities available. It doesn’t matter how much money you invest into your cloud IT infrastructure. There is no reason to wait for the first heavy bill from AWS or another vendor to start implementing FinOps. Although you’ll find a lot of ways to save your IT budget in case of a thousandth cloud bill, starting FinOps from the first VM in a cloud prevents you from unpredictable cloud bills, unassigned and idle resources.
Don’t wait till a cloud bill becomes complicated and all things go off the rails. Huge overspends of IT departments on their cloud infrastructure often lead to harsh restriction of budget or even serious cutdown. It can affect a business in general or become a bottleneck for your engineering department. Unfortunately, big overspends are the most common driver for CIO or CFO to pay more attention to cloud spends.
Implement all main FinOps principles mentioned above from Day 1. Of course while your infrastructure will be growing, more recommendations will appear. But the main principles such as visibility and control can be easily implemented in the earliest stages. You can start from simple tagging of resources and then grow up to your own FinOps department.
In general, it’s not important which way leads your company to the understanding of the importance of FinOps value. If you have already realized that you are willing to change your approach to cloud costs, it’s the first, small, but incredibly important step towards smart cloud consumption and better unit economics. The value of starting the process as soon as possible can’t be underestimated and benefits will appear almost immediately.
Nick Smirnov, FinOps and digital transformation enthusiast, CEO at Hystax
