One of the most frustrating experiences for IT leaders is receiving a cloud invoice with costs well above expectations. It’s not as bad as a security issue or a major incident in a critical business system, but spiking cloud costs can have a similar impact. IT leaders are tasked with finding the root cause of the cost increase, explaining the issues to finance, and realigning the IT team to get costs back on track with the budget. It’s even more challenging when increasing cloud costs cause an unexpected budget variance that requires approval.
Devops teams that do not monitor cloud costs risk having to modify their architectures and automations to offset unexpected cloud costs. To avoid this, more IT teams are taking a proactive approach, using finops tools and assigning responsibilities to monitor costs and find optimization opportunities.
Finops best practices include centralizing reporting, benchmarking cloud infrastructure, and forecasting peak usage periods. Cloud cost reduction opportunities include automating provisioning, standardizing build patterns with infrastructure as code (IaC), optimizing virtual desktops, and improving incident response.
“Finops facilitates quicker, data-driven decisions on cloud investments, which increases business agility in addition to cost savings,” says Ananth Kumar, product and engineering leadership at ManageEngine. “It guarantees that teams match spending with priorities by fostering an environment of accountability and cooperation across engineering, finance, and operations.”
Devops teams are aware of the impacts of shift-left practices in the development process. We’ve realized the importance of incorporating QA into software development, especially when establishing a continuous testing strategy and robust CI/CD pipelines. Many organizations have rebranded devops to devsecops as a call to shift-left security practices, transforming them from an afterthought to a non-negotiable devops principle.
Now many are feeling the pressure to shift left on finops practices and avoid the technical debt of unmanaged cloud costs. I asked tech leaders to share their advice for organization shifting left on finops.
Improve developer experience and reduce costs
When compute environments are not cost-efficient, it leads to cost overruns. It also creates rework for development teams to optimize architectures and invest in automation. For organizations with many developers, one opportunity is to review the infrastructure and provisioning on development environments.
“Cloud development environments (CDEs) empower developers by providing codified, cloud-based workspaces that improve resource control and cost optimization,” says Rob Whiteley, CEO of Coder. “Integrating CDEs with finops accomplishes the goal of shifting left and creating a powerful framework for balancing performance, resource management, and financial accountability.”
CDE benefits go beyond cost savings. Consistent environments improve quality and help avoid the common problem of, “Well, the code worked in my dev environment.” They also make onboarding new developers easier and offer other developer experience benefits.
Optimize environments to avoid cloud cost debt
Beyond development environments are the testing, staging, production, and other cloud environments. Some environments may have stable usage patterns, while others can be optimized for patterns such as no usage, typical usage, and peak usage. Fiscally responsible devops organizations build finops policies directly into IaC and use cloud providers’ finops reporting to optimize cost-inefficient architectures.
“Cost controls should be a part of the company’s IaC strategy when deploying code to production by utilizing cost control capabilities within services from Azure, AWS, Google Cloud, or other clouds that can place soft and hard limits on spend,” says Josh Mason, CTO of RecordPoint. “IaC code should include configuring these limits as part of deployment, so they are guaranteed and are not a follow-on operational activity. This proactive approach is preferred over reactively applying controls after a finops incident, such as an overage.”
Another requirement to avoid cloud cost debt is developing the rules and automation to respond to underutilization, unexpected cloud usage spikes, and unexpected cost increases.
“IT teams at many organizations pay for services, storage, or computation that they never use,” says Kumar of ManageEngine. “Reports show the location and timing of these cloud usage spikes, which might occur most often during event-based workloads, large-scale data transfers, or CI/CD runs. IT teams should use the insights to resize instances, scale down unused resources, and set sensible limits on auto-scaling.”
Capture cloud costs with their business value
Building cost awareness in devops requires asking an upfront question when spinning up new cloud environments. Developers and data scientists should ask if the forecasted cloud and other costs align with the targeted business value. When cloud costs do increase because of growing utilization, it’s important to relate the cost escalation to whether there’s been a corresponding increase in business value.
The FinOps Foundation recommends that SaaS and cloud-driven commercial organizations measure cloud unit economics. The basic measure calculates the difference between marginal cost and marginal revenue and determines where cloud operations break even and begin to generate a profit. Other companies can use these concepts to correlate business value and cost and make smarter cloud architecture and automation decisions.
Joshua Bauman, head of cloud operations at Apptio, an IBM company, says, “Having unit cost metrics inside IaC platforms helps devops focus on the cost-per-unit measure, as this drives efficiency, profit, and ultimately smarter architecture decisions while exposing the data in the same place where deployment occurs.”
So, when invoices come in and there’s a spike in cloud costs, reviewing the delivered business value and unit costs can help explain the increase and avoid sending devops teams into rapid response mode.
Bauman adds, “If you’re just looking at cloud costs and they double, you’ll only see increased expenses. But when tracking both costs and business outcomes, you’ll see that you are optimizing and making the right design decisions that contribute to greater success.”
Promote finops beyond cost savings
Establishing finops disciplines can deliver business value beyond cost savings and making financially smart cloud architecture decisions. IT operations leaders overseeing significant cloud infrastructures are developing finops practices as a cost and operations management service.
“Mature finops practices can discover security holes, such as unexpected instance classes spinning up in non-standard regions before security telemetry can, and cut through the noise that typically overwhelms security systems to provide a clearer and more direct signal of potential issues,” says Kyle Campos, CPTO of CloudBolt. “When seamlessly integrated into devsecops practices, finops telemetry not only reveals spend risk, but also shines a light on broader engineering and business risk.”
Mason of RecordPoint adds, “A large increase in spending could indicate a security incident through large-scale attacks against endpoints, or a large leakage of data showing up as spikes in egress costs. Broadly providing visibility into costs creates a culture of accountability and ownership in proactively managing resources.”
One key change to shift-left finops is making costs transparent to development teams and capturing cloud optimizations as a form of technical debt.
“Engineers especially can get tunnel vision on delivering features and the art of code, and cost modeling should happen as a part of design, at the start of a project, not at the end,” says Mason of RecordPoint. “Companies generally limit the staff with access to and knowledge of cloud cost data, which is a mistake. Companies should strive to spread awareness of costs, educating users of services with the highest cost impacts, so that more people recognize opportunities to optimize or eliminate spend.”
By the time the invoice with a spike in cloud costs comes, the only recourse IT leaders may have is to negotiate with the cloud provider and address cloud cost debt. Proactive organizations are shifting left finops practices to development and operations responsibilities. Finops disciplines help align cloud investments with business value. Key elements include ensuring cloud costs are factored into architecture decisions, prioritizing automations to tune the infrastructure based on demand, and creating alerts highlighting unexpected cost changes.