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Business organizations are widely adopting cloud systems to enhance business operations and boost growth at minimum costs. But is it actually cost-efficient? Cloud services are often blamed for their high operational costs. Is it an inherent problem of cloud services? Well, it is imperative to understand that while implementing cloud services in an organization one must also take care to set up a framework for cost management. Cloud cost optimization is ignored in companies which leads to increased expenditure or wastage of cloud resources. According to the Economic Times report, multiple industry experts suggest that cloud wastage can eat up over 30% of a businesses’ cloud operating costs. Cloud computing has positive impacts on transforming businesses to gain maximum productivity and thus adopting cloud cost optimization is necessary.

Challenges to Maintain Cost Optimization

  • Under provisioning of cloud resources by the providers can result in cost fluctuations and inefficiencies. Over-allocation and management of cloud resources may result in wastage, which will lead to unnecessary payments.
  • Lack of visibility will disable the organization from understanding the cost implications of technologies. If operational data is not visible, it delays the performance of networks and crashes the applications which will demand high maintenance costs.
  • If the departments and teams in an organization have conflicts it can lead to poor cost optimization management. Every team should focus on better cost management and work towards building a cost-efficient operation system.
  • Cost predictions by service providers are usually inaccurate and the billing process is complex. Forecasting cloud budgets are complicated, and hence the introduction of new cloud services can hinder the cloud cost optimization process in an organization.

FinOps to the Rescue

FinOps is a cloud cost management system that provides various tools and practices to adopt cost optimization, understand, and control the expenditure. FinOps bring together the finance, business, and technology departments to manage and govern the cloud services. The FinOps Foundation report states that a large portion of practitioners felt the need for FinOps as the cloud spend reaches $1 to $10 million annually. Although the survey reveals that 43.5% of organizations are still at their crawling stage with FinOps, 41.5% are in the walking stage establishing practices, and only 15% are mature enough with evolving practices. The survey clearly showed an increase in the adoption rate of FinOps, but organizations still face many challenges to implement it.

The automation level of FinOps is also not satisfactory in the survey. According to the survey, 49% of respondents had little or no automation for managing cloud spend. Further, among those practicing automation, 31% automated notifications and 29% automated tagging hygiene. Automation is one of the core principles involved in FinOps. Cloud cost optimization automation will enhance the scalability of cloud services and save costs. Organizations should invest in cloud cost optimization and FinOps to deliver better services with minimized costs.