Introduction
Businesses face an unpredictable economic climate with rising inflation, supply chain disruptions, and increasing costs. As a result, companies are compelled to optimize expenses and implement financial resilience strategies. While leveraging the cloud is widely acknowledged to reduce IT capital expenses, a well-executed cloud strategy can also facilitate operational cost reduction and foster innovation and the development of new capabilities.
A recent study projects that Fortune 500 companies will benefit from cloud technology worth over $1 trillion by 2030.
What is FinOps?
FinOps, or financial operations for the cloud, is a discipline that helps organizations optimize their cloud costs and realize the total value of their cloud investment. FinOps combines the principles of financial management with the best practices of cloud computing to help organizations make smarter cloud investments and decisions. Cloud FinOps is comprised of five building blocks:
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Accountability and Enablement: This involves setting up rules and processes to manage cloud spending and ensure it is aligned with business goals.
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Measurement and Realization: This means monitoring cloud expenses and performance metrics to identify opportunities for savings and ensure the most out of your cloud investment.
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Cost optimization: This involves analyzing cloud usage data to identify and eliminate waste.
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Planning and forecasting: This involves developing accurate budgets and forecasts for cloud spending.
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Tools and accelerators: This involves using cloud cost management tools to help businesses track and manage their cloud costs.
Google Cloud offers many tools and resources to help you implement FinOps and optimize your cloud costs. These include:
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Google Cloud FinOps Hub: A centralized platform that provides visibility into your cloud costs and usage, as well as recommendations for optimizing your spending.
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Google Cloud Billing and Cost Management: A suite of tools that help you track, analyze, and manage your cloud costs.
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Google Cloud Pricing Calculator: A tool that helps you estimate the cost of your cloud usage before you deploy your applications.
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Google Cloud Committed Use Discounts: You can earn by committing to a certain level of cloud usage for a period.
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Google Cloud Managed Services: Services that Google manages, so you don't have to worry about provisioning, caring, and updating them yourself.
FinOps is a cloud financial management practice that engages cross-functional teams in a collaborative effort to control cloud costs.
Benefits of FinOps
There are many benefits to implementing FinOps, including:
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Reduced cloud costs: FinOps can help you identify and eliminate wasted cloud spending, such as idle resources and overprovisioned instances.
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Improved cloud performance: FinOps can help you right-size your cloud resources so that you're using the right amount of resources for your workloads. This can result in better performance and dependability.
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Increased cloud visibility: FinOps can help you gain better visibility into your cloud costs and usage. This information can help you make better decisions about your cloud investment.
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Improved cloud governance: FinOps can help you establish and enforce cloud governance policies. This can help you reduce the risk of cloud overspending and ensure that your cloud usage is aligned with your business goals.
How do you optimize your cloud costs ?
With the current economic climate, it’s essential for businesses to find ways to reduce their cloud expenses. Google Cloud provides a range of tools and resources that can help you save money on your cloud costs. Here are some tips:
Use committed use discounts for predictable workloads
Committed use discounts can save businesses up to 70% on their cloud costs. To qualify for determined use discounts, companies must commit to a certain level of cloud usage for some time.
Use managed services whenever possible.
Managed services help businesses manage their cloud infrastructure more efficiently and cost-effectively. Google Cloud provides a wide range of managed services, such as Google Compute Engine (GCE), Google App Engine (App Engine), and Google Container Engine (Kubernetes Engine).
Use preemptible VMs for batch workloads.
Preemptible VMs can be terminated at any time to make room for higher-priority VMs. They are up to 90% cheaper than regular VMs, but they are unsuitable for all workloads.
Use spot instances for workloads that can be interrupted
Spot instances are VMs that are available at a discounted price. Spot instances can fluctuate based on demand, but they can be up to 90% cheaper than regular VMs. Spot instances are suitable for workloads that can be interrupted, such as batch jobs and data processing jobs.
Use discounts and promotions.
Google Cloud offers various discounts and promotions throughout the year. Businesses can check the Google Cloud website for the latest offers.
Regularly review cloud costs and usage.
It is essential to regularly review cloud costs and usage to identify opportunities for savings. Google Cloud offers a variety of tools to help businesses track their cloud costs and use, including the Cost Explorer tool.
Conclusion
FinOps can help businesses save money on cloud spending in several ways. It can help companies identify and eliminate wasted cloud spending, such as idle resources and overprovisioned instances. It can also help businesses ensure that they use the right amount of cloud resources for their workloads. Additionally, FinOps can help companies establish and enforce cloud governance policies, which can reduce the risk of cloud overspending and ensure that cloud usage is aligned with business goals.
