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Tag: FinOps Foundation

  • Platform Engineering is a ‘Golden Path’ to FinOps

    Platform Engineering is a ‘Golden Path’ to FinOps

    Cloud costs. This simple reality has given rise to all manner of toolsets now being focused on modern IT stacks to shore up resources, reduce waste, optimize identified efficiencies and to monitor system wellbeing at the highest, widest and broadest level.

    Across cloud computing landscapes now being reinvented for generative AI functions, the rise of machine learning operations (MLOps) practices is aiming to bring software engineering in line with operations engineering and—perhaps above all—cost engineering.

    Before MLOps, There Was FinOps

    But before we tread too deep into MLOps territory, perhaps we should remind ourselves that FinOps (operations aligned to consider the financial impact of all systems architecture and software engineering decisions) is really the foundational practice that should oversee all matters in this field.

    CloudBolt is one organization that’s been very vocal in its desire to help businesses optimize, automate and control hybrid cloud and multi-cloud environments by providing cloud financial management, automation, orchestration and governance solutions for global enterprises. The firm runs several industry reports around various aspects of multi-cloud complexity. 

    Institutionalized Platform Engineering

    CloudBolt’s Kyle Campos, chief product & technology officer (CPTO), suggests that as businesses continue to sharpen their focus on efficiency–scrutinizing every expenditure and tool–by December 2024, most forward-thinking CIOs will ‘institutionalize’ platform engineering and establish corresponding teams. These teams will not only manage technology assets but also prioritize them to accelerate business value. This strategic shift aligns with the broader industry trend of optimizing technology stacks for agility and efficiency, offering a multi-dimensional approach to business.

    “FinOps silos that drive friction and [the presence of] unrealized optimization promises will reach a breakthrough as the conversation and solutions shift from ‘motivation’ to ‘facilitation’ in the coming year,” said Campos. “With platform engineering fully adopted as a technology approach by the majority of forward-thinking IT organizations by the end of next year, FinOps practices will become a native part of the journey to ‘golden paths,’ on par with security and observability, as the trifecta of defaults in the delivery process.”

    The Ultimate Performance Metric

    After decades of profligate spending on hardware, software and services, Campos said he thinks that 2024 will become the year that the cost to run an application becomes the ultimate performance metric. Why does he make this assertion? Because the traditional metrics that are focused on commodities (CPU, memory, disk, network) will actually become less important, he said. 

    As digitally transformed organizations continue their advance to the cloud, the cost-of-goods-sold will get linked intrinsically with operational and services measured at a finer-grained level; looking at specific tools, services and algorithms for cost savings.

    “As organizations grapple with intricate financial challenges in 2024, consumers will increasingly demand flexibility, compelling cloud providers to offer more consumer-centric pricing and services,” said Campos. “The FinOps FOCUS initiative instituted this year is just the beginning. The collective voice of the user community will continue to be a game-changer in leveling the playing field between cloud providers and consumers.”

    AI/ML Disrupts Linear FinOps

    Campos concluded by saying that currently, there is a direct correlation between user complexity/friction and capabilities/cost granularity in the FinOps solution ecosystem. 

    “Increases in the latter make the former that much more complex,” he argued. “But advances in AI/ML will continue to disrupt the status quo, lowering the barrier and time to value for users. What used to take hours of custom configuration, trial and error, will be a low-friction conversation. Additionally, AI/ML will facilitate unit cost solution inversion such that unit cost is provided to the user, not from the user.”

  • How Does IT Management Govern EverythingOps?

    How Does IT Management Govern EverythingOps?

    The number of tools engineers use to provision software architecture in the cloud is starting to get a little out of hand. There are many competing ways to do one thing. Most often, people simply adopt a new tool to solve a DevOps problem in the moment, not always considering the longevity of the solution or how other departments are handling it. This could result in fragmentation and technical debt, making it difficult to find consistency and increase speed simultaneously across all company divisions.

    I recently interviewed Jeff Kukowski, CEO, CloudBolt Software, to explore why these issues persist and how executives should approach cloud management within their organizations. According to Kukowski, many flavors of Ops now permeate large companies. Different approaches often exist per department or interdepartmental, with teams using various software stacks.

    According to Kukowski, a new frame of mind will be necessary to remain agile in the new cloud order and to address this state. Doing so will require organizations to erode false dichotomies around ownership and IT governance.

    Everything’s Going Ops

    At this point, most large suites of digital services have adopted a complex hybrid and multi-cloud modality. And many teams have embraced their own unique form of DevOps to get a handle on the management difficulties of delivering software and maintaining reliability for microservices architectures. Different groups pulling in various directions create an ongoing battle of EverythingOps, explained Kukowski.

    You can think of it as separate Ops approaches emerging around different business functions. For example, FinOps is emerging to control spending, ITOps is about delivering services, DevOps is improving release fluidity and DevSecOps aims to bring security to the forefront of the release process. Lastly, BizDevOps is about increasing observability for business outcomes.

    At a high level, CIOs have committed to digital transformation to move quicker. Yet the problem now is “battles between different Ops can easily lead to broken IT governance,” said Kukowski. This tension introduces several false dichotomies, he explained. In addition to slowing agility, a lack of DevOps unity eschews reusability, contributing to waste and increased IT expenses, said Kukowski.

    Solution: Shifting Governance Left

    There is a belief in IT that true innovation will come if you only give engineers the keys to use anything they want. While that may be true, without better leadership with regard to the basics in this new cloud order, some things can get out of control very quickly, Kukowski warned. Instead, he argued that built-in guardrails for provisioning tools are necessary. “We have too many tools—we need better frameworks to tie this together.”

    Not only would increased cloud governance help tie together disparate tooling decisions, but Kukowski argued it also can reduce the cognitive load necessary to onboard each tool. “Shifting left will increase speed—it won’t slow people down,” he said. Contrary to popular belief, he said that shifting guardrails left can have the effect of increasing speed, which may greatly outweigh the negatives of shackling developers to a single approach.

    CloudBolt predicted siloed management will shift to organizational governance around tools in the coming year. But it’s not only the tooling decisions that require forethought, “it’s the leadership and cultural approach,” said Kukowski. A common area where greater leadership is required is in tagging workloads for applications, he said. “It’s not being done well anywhere.”

    Or, consider containerization. Containers have become fundamental to most modern cloud technology stacks, yet, the cognitive load required to deploy, configure and run a contain remains quite high, explained Kukowski. Do you allow every developer to custom-code each container, or do you enable a self-service repeatable provisioning process? If standard code is not being reused, you’re not getting speed or governance, he explained. Furthermore, with green IT initiatives becoming a priority, companies should be looking at ways to reuse processes and reduce waste where they can.

    Final Thoughts: Shift Left, Automate and Reuse

    For a cloud-native company, the emphasis is constantly on speed and growth. And engineers are absolutely driving this focus and the resulting innovation. Yet, this innovation can’t come at the expense of bringing all departments onto the same level of innovation. “Innovative stuff in the cloud can’t be separated from governance, ESG and security,” said Kukowski.

    A big hurdle of tomorrow’s cloud management will be identifying and uniting these islands of automation, these pockets of tools and preferences that differ between departments. It will also require a different frame of mind across divisions. “There’s a difference between solving the problem for the task and solving the problem for reuse and speed,” explained Kukowski. Delivering on reuse and speed will require less bespoke DevOps automation and better foundations for solving future problems, he said.

    “Shift left, automate and reuse—people shouldn’t have to touch it. That’s the thinking that needs to be applied to this new cloud order,” said Kukowski.

  • FinOps Cloud Cost Optimization via Governance-as-Code 

    FinOps Cloud Cost Optimization via Governance-as-Code 

    Cloud implementations continue to grow in scope and complexity. Too often, this expansion also means costs keep spiraling out of control. In this article, we’ll examine why the emerging practice of cloud financial management (FinOps) is so essential to containing costs in the cloud. We’ll then discuss the challenges teams encounter as they start to apply FinOps approaches. Finally, we’ll reveal the opportunity presented by employing governance-as-code to establish continuous cloud cost optimization—and how this approach makes it practical for teams to put the theory of FinOps into practice so they can keep cloud costs in check.

    The Emergence of FinOps

    For many organizations, there’s been a race to leverage cloud services, with teams seeking to realize advantages in flexibility, agility and efficiency. Within an organization, it’s not only a matter of more workloads running in the cloud, it’s a matter of more distinct deployment models being used, more teams using cloud services and leveraging multiple service providers.

    In the process, teams have had to contend with rapid growth in the size and diversity of the implementations that have to be managed—and paid for. It is this latter aspect that has been a rude awakening to those responsible for managing budgets. Left unchecked, this growth in cloud use has led to spiraling costs and predicting, managing and controlling these costs only grows more difficult as deployments get more complex and more frequent.

    This need for improved cost management has given rise to a new discipline: Cloud financial management; or FinOps. In short, FinOps is a way of bringing financial discipline and accountability to the variable-cost paradigm found in the cloud. FinOps brings together a combination of technologies, processes and teams, including professionals from technology, finance and business. By gaining an improved ability to understand, track and manage cloud costs, teams can begin to maximize the value realized through their cloud expenditures. Given the strategic and urgent nature of cloud cost management, it’s not surprising that FinOps teams are growing. According to research conducted by the FinOps Foundation, FinOps teams expanded 47% over last year, and these professionals are expecting their teams to grow 75% in the next year.

    Challenges in Establishing FinOps

    While there’s a lot of promise behind the establishment of FinOps practices, there are also many obstacles standing in the way for teams. When the FinOps Foundation queried respondents about top challenges, these were the top five responses:

    • Getting engineers to take action (39%)
    • Dealing with shared costs (33%)
    • Accurate forecasting (26%)
    • Reducing waste or unused resources (25%)
    • Full allocation of costs (23%)

    Lacking comprehensive control and visibility over multi-cloud environments means these teams can’t proactively manage costs—and too often find out about wasted expenditures and high costs of underutilized resources after the fact. Because stretched teams are reliant upon manual follow-ups and tactics, it is difficult to get engineers to respond as quickly and effectively as needed.

    Compounding these challenges is the fact that across teams, different tools and processes are used. For example, different development teams might be using different provider services along with varying deployment tools, such as AWS Cloud Formation, HashiCorp Terraform, Kubernetes and so on. This inconsistency introduces inefficiencies and miscommunication and stifles team productivity.

    While the cloud offers a range of benefits compared to legacy, on-premises infrastructure, without proper governance, cloud costs can quickly spiral out of control. In fact, Gartner analysts report that in the next few years, 60% of organizations will encounter cost overruns in public clouds.

    Rethinking Cost Management

    For all the reasons articulated above, teams are being asked to take a new approach to cloud cost management, one that aligns with the principles of FinOps. For many, this means embracing the concept of governance-as-code to optimize cloud costs. Cloud governance-as-code represents a way to automatically and dynamically apply policies, including for cost optimization, in fast-changing cloud environments.

    With governance-as-code approaches, policies are defined using a standard language. Code associated with cost policies is created, deployed and maintained in much the same way developers manage application or infrastructure code. Developers don’t have to worry about tracking or managing costs. Cost policies are continuously evaluated against current state, utilization and configuration of cloud infrastructure. If any violations occur, automated notifications and workflows can be triggered. Here are the key requirements for using governance-as-code to establish continuous cloud cost optimization:

    Cost Policies are Defined via an Intuitive Language

    Traditionally, development, operations and financial groups worked in silos. Each team had its own tools, workflows and policies, and even fundamental terminology could vary substantially.

    To maximize the potential of continuous cloud cost optimization via governance-as-code, solutions need to enable teams to define, manage and revise policies using an easy-to-understand, consistent language. This makes it much easier for different teams to collaborate and gain alignment on key cost management policies and best practices.

    Finally, to be effective in establishing continuous cloud cost optimization, governance-as-code offerings need to employ a language that is independent of any specific programming languages that application developers may use. Further, these languages should be applicable to the broadest set of applications, cloud services, development tools and so on. This is vital to ensure that development teams retain maximum flexibility in the tools and services they can use.

    Cost Policies are Managed and Deployed via Git Within CI/CD Workflows

    Once policies are reviewed and finalized, teams must be able to apply these policies within the development organization’s existing continuous integration/continuous delivery (CI/CD) workflows.

    Through robust governance-as-code approaches, teams can create cost policies as code artifacts and deploy them via open source version control systems like Git. Through this approach, teams can apply policies in a manner consistent with their software development and delivery life cycles.

    By codifying cost governance in this way, cost controls can be deployed via Git within a CI/CD pipeline. This approach enables teams to avoid complex manual processes associated with tasks like managing tickets, requesting changes and so on. This also helps teams keep up with the accelerating pace of today’s dynamic cloud and development environments. Further, this approach means governance code can be traced through various state changes, rolled back if needed and so on, just like application code.

    Cost Policy Violations are Detected and Addressed in Real-Time

    Through continuous cloud cost optimization via governance-as-code, teams are  empowered to institute not only continuous detection but also immediate action. Policies can be employed at regularly scheduled intervals or they can be triggered based on certain events.  This approach enables enforcement of workflows and actions that may be required. If policy violations occur, notifications to relevant teams or team members can happen automatically and advanced workflows can be triggered. For example, a policy could identify RDS instances greater than 30 days old that have had no connections in the last 14 days. It would then notify the owners of these instances. If they don’t take action in seven days, the instances could automatically be stopped.

    Cost Policy is Continuously Enforced and Refined

    Continuous cloud cost governance-as-code has a never-ending life cycle, just like the team’s software development life cycle. Cost governance code is built, deployed, tested and released, and the process continues as new policies are developed and refined over time. As requirements change, teams need to be able to periodically analyze cost data and update policies as needed.

    As organizations continue to invest larger sums in their cloud implementations, the need to establish strong FinOps capabilities will only grow more critical. However, as these cloud deployments continue to grow more complex, it can get increasingly difficult to realize the promise of FinOps. For these reasons, employing governance-as-code to establish continuous cost management is emerging as a key approach. With this approach, teams can achieve sustained compliance and minimize waste.

  • How to Make Self-Service IT More Intelligent

    How to Make Self-Service IT More Intelligent

    It’s an old story: DevOps’ need for speed and agility clashes with IT’s need for security and control. Striking the right balance between control and agility is key to fostering a smooth relationship between DevOps and IT.

    Many enterprises have achieved this balance by implementing a self-service IT model. In a self-service environment, IT creates a pre-approved catalog of resources that developers and engineers can access themselves, regardless of where they are, through a single portal. These resources might include storage, compute, networking or multi-tier app stacks. Thus, DevOps can get the things they need on their own, when they need them, avoiding the IT bottleneck while IT still maintains control.

    This gives DevOps the speed and agility they want while allowing IT to maintain control. IT can place guardrails on resources, such as role-based access controls and permissions, usage quotas, cost controls, security and compliance measures. IT can also set up approval workflows to ensure visibility and management. DevOps increases efficiency and expedites time-to-market. They will also be much less likely to go around IT and procure the resources they want on their own, such as spinning up public cloud resources with a credit card. This kind of activity leads to unauthorized apps and resources running in the background without IT’s knowledge – otherwise known as shadow IT – which can create significant security vulnerabilities and cost overruns.

    So, the balance between DevOps and IT, the yin and yang of speed and control, is attained. All is well in the kingdom, right? Not exactly. While self-service IT is essential, it needs to grow more intelligent to remain effective.

    Hybrid cloud environments are changing rapidly. As helpful as most current self-service IT systems may be, a multi-cloud strategy will continue adding more layers of complexity to IT infrastructure management. While a prudent enterprise will automate as many cloud management processes as possible and have stringent guardrails in place to enforce cost and security policies, there is still plenty of room for things to go wrong when you have multiple engineering and development teams consuming cloud resources in a rapidly-changing environment.

    When various combinations of resources are provisioned in ways that IT didn’t foresee, or new tools are added that didn’t exist when existing policies were drafted, you have an environment that’s susceptible to misconfigurations and inadvertent security risks. Furthermore, tools and resources available to DevOps via the self-service portal may become outdated or not be as effective or useful as they once were. If IT hasn’t replaced or upgraded them yet, DevOps might still be tempted to go outside the system to get what they need.

    Staying on top of the evolving challenges in hybrid cloud management will require a new, more intelligent approach to self-service IT. This approach will further empower DevOps and assist IT by embedding greater awareness into decision-making processes across the organization.

    Say, for example, a developer writes a piece of code. Unbeknownst to the developer, something they just wrote in the code could potentially create a security vulnerability. The old way of preventing cybersecurity breaches resulting from flawed code entails top-down, more centralized security scans or reactive audits.

    The new, more proactive approach would leverage an advanced automated alert and visualization system that informs people about the impact of the decisions they’re making, as they’re making them. In the example above, the developer would automatically receive an alert about the security issue in the code so it can be rectified right then and there, before resource deployment.

    Similarly, this shift-left-and-rectify approach can be applied to cost control and compliance issues, as well. If resources are being provisioned sub-optimally and would incur unnecessary expenses, DevOps would be automatically alerted to the oversight and presented with a cheaper option. IT can make the solution even more cost-effective by allowing developers to take direct actions from the platform, instead of going to various portals. (According to the FinOps Foundation’s State of FinOps 2021 report, 39% of engineers do not currently have the necessary tools to take these actions). This type of intelligent automation can also ensure regulations and standards such as PCI-DSS, CIS and the AWS Well-Architected Framework are always adhered to.

    While traditional self-service IT systems still serve a vital purpose, these types of proactive cloud management and optimization initiatives will keep self-service IT agile and able to adapt to rapidly changing conditions. By embedding greater awareness into decision-making across the enterprise, DevOps functions even faster and more efficiently, and IT maintains even greater control. Hybrid cloud environments can be managed more intuitively and with greater confidence that misconfigurations and oversights that lead to security issues, cost overruns, and compliance risks will be intelligently and continuously remediated. The yin and yang endures.

  • First FinOps Foundation Survey Shows Rise in Cloud Financial Management

    Many companies rapidly adopting FinOps but are at the early stages of optimizing cloud spend
    PORTLAND, Ore. – February 3, 2021 – Big growth is ahead for FinOps, the field of cloud financial management, as more companies accelerate their cloud plans, especially amid COVID-19, and struggle to contain and optimize cloud spend, new research indicates.
    The FinOps Foundation, a non-profit trade association focused on codifying and promoting cloud financial management best practices and standards, recently surveyed over 800  FinOps practitioners from around the world with a collective $45 billion in annual cloud spend. Almost half of the survey respondents were from companies with 10,000 or more employees, indicating that large companies are driving FinOps adoption.
    The survey underscores that FinOps is experiencing big growth but that there is much work ahead. Key survey findings include:
    • Nearly half of survey respondents (49%) had little or no automation of managing cloud spend—one of the core disciplines of a FinOps practice.
    • Of those with some automation, almost one-third automated notifications (31%) and tagging hygiene (29%.) Only 13% automated rightsizing and 9% spot use–which indicates that companies are likely missing opportunities to optimize cloud spend.
    • Half of compute spend on public cloud was for on-demand,  the highest-price service, and 49% for reserved, savings or committed use coverage, the next costliest option. Only 13% was for spot use, the least expensive service, even though respondents identified 28% as being an “excellent” target for that option.
    • Getting engineers to act on cost optimization was cited by 40% of respondents as the biggest challenge, followed by dealing with shared costs (33%) and accurate forecasting spend (26%.)
    • Just 15% of respondents said their FinOps practice was in the “run” phase of maturity, meaning they can continually improve a built out practice. Four in 10 firms are in the “walk” phase, with core processes running but with much maturing remaining, and 44% are in the  “crawl” phase and just getting to basics.
    “The dirty little secret of cloud spend is that the bill never really goes down,” says J.R. Storment, executive director of the FinOps Foundation. “Smart companies use the cloud to move quickly and outperform their competitors. While agility is paramount, they also want maximum business value for the investment.”
    FinOps is clearly an area more companies will invest in. The survey respondents predicted an over 40% growth in FinOps team size in the next 12 months.
    By learning more about the challenges and opportunities facing FInOps practitioners, the Foundation, which just added Google Cloud as a Premier Member, can better create educational and informative content to help the community.
    “The survey underscores that the challenges faced by large companies—cost, complexity of billing data, the changing nature of the cloud—are surprisingly similar to those faced by small companies,” Storment notes. “This supports the notion that developing FinOps best practices early on will pay huge dividends as cloud use and costs grow. The FinOps Foundation is perfectly positioned to help enable these best practices with our work in such areas as frameworks, benchmarking data, and certifications.”
    For more survey insights, including around such topics of top challenges, team structure, capabilities, KPIs, and primary needs, access the report here.
    About the FinOps Foundation
    The FinOps Foundation (F2) is a non-profit trade association made up of FinOps practitioners around the world including Atlassian, Autodesk, Gannett, HERE Technologies, Just Eat, Nationwide and Spotify. Grounded in real world stories, expertise, and inspiration for and by FinOps practitioners, the FinOps Foundation is focused on codifying and promoting cloud financial management best practices and standards to help community members and their teams become better at cloud financial management.
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