Before starting Finops its better to have some basic knowledge with one of the three main cloud providers
-
Why Use Cloud Computing?
- Companies use cloud computing to leverage the resources of a cloud computing
- provider such as AWS, Azure and Google Cloud.
- Leverage enterprise grade data center resources such as data storage, analytics and compute services.
- Pay for what you use and not what do not need.
- On Demand and Flexible Model
Billing in cloud:
- Cloud Computing is on demand delivery…..
- Cloud Computing your pay for resources used.
- Resource consumption in cloud is variable
Service Models:
- Infrastructure as a Service (IaaS)
- Platform as a Service (PaaS)
- Software as a Service (SaaS)
Deployment Models:
- Public – The cloud infrastructure is planned for the common public use. It may be possessed, handled, and functioned by some business enterprise, academic institution, or some government organization. (AWS, GCP, Azure)
- Hybrid - The cloud infrastructure is a composition of two or more distinct cloud infrastructures (private, community, or public)
- Private -The cloud infrastructure is planned for selective use by an individual organization which contains multiple customers
- Community – The cloud infrastructure is planned for selective use by a particular community of consumers from organizations that have mutual interests like security needs, policy, and compliance considerations.
What is FinOps
- The practice of bringing financial accountability to the variable spend model of cloud, enabling teams to make business trade-offs between spend, cost and quality.
- Finops Foundation
What is FinOps is about?
- FinOps is a collaborative effort between Finance and Operations where cloud spending is moderated and optimized. – Cloud Financial Management
- A culture to adopt
- Method of ROI and cost optimization -A way to prioritize ongoing optimization of your cloud costs.
Why FinOps
- Cloud Spending increasing YoY
- Managing Cloud Spending can be overwhelming w/o a culture shift
- Set of Best Practices
- Provide corporate oversight of cloud spending. (Centralized)
FinOps History
- Unofficially practiced in early cloud days as Cloud Cost Optimization
- FinOps is a result of cloud computing procurement being centralized.
- FinOps Foundation - 2019
Six Principles of Finops
- Collaboration
- Business Value
- Ownership
- Timely Reports
- Centralized Team
- Variable Cost Model
| Sno | Principle | Overview |
|---|---|---|
| 1 | Collaboration | FinOps is not about one person at a company but a constant collaboration between engineers and their managers, between R&D, Operations and Financial departments, CTO, CIO and VPs offices. |
| 2 | Business Value | FinOps needs to be implemented to provide value for the organization. Provide for cost optimization and a solid ROI |
| 3 | Ownership | Stakeholders need to be able to control and take ownership of their expenses. |
| 4 | Timely Reports | Reports should be routine and concise to provide insight into cloud spend and forecasting. |
| 5 | Centralized Team | A FinOps team should be centralized to provide for an enterprise focused approach removing redundancy but provide for collaboration. |
| 6 | Variable Cost Model | Cloud Spending is variable and therefore the FinOps team must have processes,practices and tools in place to manage and monitor spending to meet the business goals. |
FinOps Lifecycle
FinOps is performed by working iteratively on the Framework Capabilities through three phases:
- Inform
- Optimize
- Operate
- Teams within an organization may be working at different FinOps Phases at any time and FinOps practitioners should always be looking at the organization’s cloud use, identifying ways it could be improved, and creating documentation to empower the individuals responsible for enacting changes that will drive the most value.
INFORM- In the Inform phase, FinOps activities involve identifying data sources for cloud cost, usage and efficiency data. Using this data for allocation, analysis and reporting empowers teams to develop capabilities in budgeting, forecasting trends, building KPIs for benchmarking, and developing metrics that will reveal the business value of an organization’s cloud spend.
OPTIMIZE -In the Optimize phase, FinOps activities involve identifying opportunities to improve cloud efficiency using the data and capabilities developed in the Inform Phase.
-Cloud providers offer multiple options to optimize cloud resource
- Modernisation
- Right Sizing
- Manage workloads and automate the elimination of waste from unused resources.
OPERATE - Aligning organization teams to business goals thru drive and action. Focus is on getting results for the organization
FinOps Personas: Implementing FinOps requires many stakeholders, or Personas, in an organization to work collaboratively with the FinOps team. It is not only the FinOps team who perform FinOps activities. All FinOps Personas involved in using, tracking, managing, or directing the use of cloud will benefit from working together using the FinOps Framework as an operating model.
- Personas represent broad stakeholder groups that must collaborate, not individual people. In a complex organization, a Persona may represent many people in various related roles
Core Personas
- Within most organizations, there are Core Personas who will always be involved in the practice of FinOps.
- Each Persona has a role to play in the organization as well as in the practice of FinOps
Allied Personas
- Organizations may have roles that are not directly involved in the practice of FinOps.
- These Allied Personas work within traditional or emerging disciplines – including Sustainability, ITAM, ITFM/TBM, Security, and ITSM/ITIL – and may need to coordinate with FinOps Practitioners.
FinOps Maturity Model
- The practice of FinOps is inherently iterative and maturity of any given process, functional activity, Capability or Domain will improve with repetition.
- A “Crawl, Walk, Run” approach to performing FinOps enables organizations to start small, and grow in scale, scope, and complexity as business value warrants maturing a functional activity.
- Every Capability and functional activity can be at a different level of maturity. There is a FinOps Assessment and the below rubric to help indicate where we think we are operating allows a convenient shorthand to communicate effectively.
Crawl:
- Very little reporting and tooling
- Measurements only provide insight into the benefits of maturing the capability
- Basic KPIs set for the measurement of success
Walk:
- Capability is understood and followed within the organization
- Difficult edge cases are identified but decision to not address them is adopted
- Automation and/or processes cover most of the Capability requirements
Run:
- Capability is understood and followed by all teams within the organization
- Difficult edge cases are being addressed
- Very high goals/KPIs set on the measurement of success
- Automation is the preferred approach
FinOps Domains
1.Understand Cloud Usage & Cost
Domain Capabilities :
- Data Ingestion
- Allocation
- Reporting & Analytics
- Anomaly Management
2.Optimize Cloud Usage & Cost
Domain Capabilities :
- Architecting for cloud
- Workload Optimization
- Rate Optimization
- Cloud Sustainability
- Licensing & SaaS
3.Quantify Business Value
Domain Capabilities :
- Planning & Estimating
- Forecasting
- Budgeting
- Bench marking
- Unit Economics
4.Manage the FinOps Practice
Domain Capabilities :
- Finops Practise Operations
- Finops Assessment
- Cloud Policy & Governance
- Finops Tools & Services
- Finops Education & Enablement
- Invoicing & Chargeback
- Onboarding Workloads
- Intersecting Disciplines
Some tips to improve the cloud cost management
| SNo | Description | Comments |
|---|---|---|
| 1 | Tagging the resources provisioned | It will help to share budget expenses to correct team |
| 2 | Try Reserved/On spot instances instead of using on demand always in aws | Cost savings |
| 3 | Automate the process to automatic shutdown and start the server in lower environment | It will save cost |
| 4 | Move the files in S3 from one tier to other, instead of keeping in standard always | cost savings |
| 5 | Keep budget alerts | Will alert the team for cost savings |
| 6 | Delete the unused snapshots/volumes | cost savings |
References:
Free Certification links
1.Introduction to Finops
Paid Certification links for finops
-
Finops Certified Practioner
- Exam Cost - 325$
- Exam Time - 1 Hr
- Number of Questions Multiple chpoice- 50
- A passing grade is 75%
- Three attempts to phase
- Once you have cleared exam and you will badge like this, to your email
Conclusion : Discussed about finops basics, principles, domain capabilities, personas and maturity models.
Consultation: Contact me if need any finops consultation for cost saving in your respective cloud via my linkedin.
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