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.