Cloud cost management is hard. A dynamic cloud environment, autonomous teams provisioning IT resources at will, and even changing prices of the resources themselves all complicate cloud cost management. Layer a multi-cloud strategy on top of that and the complexity increases even more. But how come we see companies such as Lyft cutting costs by 40% in 6 months, Etsy achieving a 42% reduction in computing costs, and MicroStrategy optimizing by 30%? Surely cost management appears to be possible.

Cloud cost management is indeed hard but, even more fundamentally, change management is hard. We get so used to the way of doing things. We set up processes, reports, approval mechanisms, and training sessions, then something changes that forces us to re-evaluate and redeploy all our efforts. We not only have to help people understand why things are changing, but we must help people change their behavior to adapt to what’s new.

Cloud cost management is a...

Imagine you grab lunch at a local eatery that provides several culinary options. You can either purchase option A, a sandwich/soup combo at a fixed price, or you can choose option B, the buffet, in a sense, but where you pay based on weight. Given that the buffet has a myriad of food items that you enjoy, you choose to go with the latter. When you select your options, you are sensitive to what and how much you put in the to-go box. On the other hand, if you went with the sandwich/soup combo, there’s less mindful calculation required because you know exactly how much you’re paying. This juvenile example illustrates the mind shift required to go from option A to B where cloud spending is more like the latter.

Those with cloud cost management success stories have already adopted this new way of thinking and dismissed traditional IT procurement processes. In the past (and even in some cases today), the relationship between technology and finance...

To put FinOps into context, let’s look at its derivation, DevOps. The industry often describes DevOps as a set of practices that combines software development (Dev) and IT operations (Ops). It involves people, processes, and tools that work together in a collaborative culture to accelerate an organization’s ability to deliver services to customers. DevOps isn’t just one tool, nor is it a one-time event. It’s a repeated and ever-evolving practice that serves to ultimately bring value to an organization. Indeed, if it doesn’t bring value to an organization, it is not something worth pursuing. At the same time, if it’s not bringing value, there might be a chance it’s being implemented incorrectly.

Similarly, FinOps is the merging of financial accountability and management of cloud resources with cloud operations. Much like how DevOps is a combination of cultural philosophies, practices, and tools that advocate a collaborative...

In this chapter, you learned about the importance of having to change your mindset when running financial operations in the cloud. You cannot use a traditional, centralized IT procurement approach since cloud operations aren’t owned by a single team. Rather, it is much more important to provide autonomy to your business teams to enable them to maximize cloud benefits. We will discuss how to enable your teams to be agile, autonomous, and to bring business value while controlling and managing their cloud spending throughout the remainder of this book.

You also learned that FinOps is a framework and discipline that crosses many teams within an organization. It is a combination of people, processes, tools, and metrics that empowers an organization using the cloud to manage its cloud resources as true assets that bring measurable value to the business. FinOps is not a one-person job, nor should it be owned and managed entirely by scattered teams. Rather, a centralized...

• Lyft Uses AWS Cost Management to Cut Costs by 40% in 6 Months: https://aws.amazon.com/solutions/case-studies/lyft-cost-management/#:~:text=As%20part%20of%20its%20cloud,engineers%20to%20build%20new%20tools.
• Doing More with Less: How MicroStrategy Cut Cloud Costs by 30%: https://aws.amazon.com/solutions/case-studies/microstrategy-cost-management/
• Etsy: Doing more with less cost and infrastructure: https://cloud.google.com/customers/etsy
• What is FinOps?: https://www.finops.org/introduction/what-is-finops/