Maximize the return on your cloud investment with FinOps! Cloud financial management, aka Cloud FinOps, is an evolving discipline and cultural practice that helps organizations manage and optimize cloud expenditures.
Hear firsthand from an AWS customer about their direct cost savings, time savings, risk reduction, and the steps they took to get there.
We'll review three approaches to cost optimization: engineering, enterprise contracts, and discount instruments. Of these mechanisms, leveraging cloud discount instruments is both highly effective at reducing cloud costs and relatively easy to implement.
During this webcast, you'll learn:
- What cloud cost optimization is and how it can reduce cloud costs
- 3 mechanisms for optimizing AWS cloud costs, with a focus on discount instruments
- Practical tips for implementing a successful FinOps and Cost Optimization practice
To learn more about cloud financial management and quantify your potential savings with ProsperOps, request a demo at www.prosperops.com/demo
2. Matt Shover
Vice President of Operations and
Customer Experience
ProsperOps
Welcome
Mike Surma
Director of Cloud Cost Optimization
Forcepoint
Special Guest
Presenter
5. Why FinOps
Servers in Datacenters
● Finance/sourcing
approval for hardware
● Known Costs &
Budgets
● Tracking of assets
Unfettered Cloud
● Engineers provision
hardware on demand
● Unpredictable spend
as usage is dynamic
● Waste and
inefficiency abounds
5
6. FinOps in A Nutshell
Servers in Datacenter
● Finance/sourcing
approval for hardware
● Known Costs &
Budgets
● Tracking of assets
Unfettered Cloud
● Engineers provision
hardware on demand
● Unpredictable spend
as usage is dynamic
● Waste and
inefficiency abounds
After FinOps
● Cost-aware engineers;
Cloud-aware finance
working together
● Showback and
accountability
● Resource tagging and
associated operations
6
7. Finance Engineering
7
Two FinOps Universes
Financial Universe
Pricing efficiencies
e.g. Reserved Instances, Savings
Plans, EDPs, private pricing
You commit dollars over time to
AWS and they give you discounts
Finance often manages these
contracts and instruments
Engineering Universe
Utilization efficiencies
e.g. Re-architecture, service selection,
rightsizing resources
Engineering commits time to save money
at AWS often in lieu of other projects
Engineering effort required to
make changes
9. Three Cloud Cost Metrics That Matter
“Only measure something if it will alter an outcome”
Metric
Cloud Spend per Month ($)
● Visibility drives accountability
Effective Savings Rate (%)
● Utilization % and coverage % are
input metrics
Waste* (proxies):
● Untagged / Unknown spend
● Resource rightsize or termination
opportunity ($)
● Unused/unattached resources
Altered Outcome
Management of costs
Financial universe “investments”
Engineering universe “investments”
10. Top Three Ways to Save on Cloud Costs: #1
● Often managed by finance
● Function similar to “discounted gift certificates”
on an hourly basis but vary by what they cover
● Most organizations spend 60%+ on compute
(EC2, Fargate, Lambda).
● Effective savings of 40%+ for 3-year discounts on
Linux-heavy workloads.
● Realistic to save 25%+ of overall AWS bill with
mature instruments and high coverage.
● Don’t overcommit (take waste reduction,
economic risk, etc. into account).
10
#1: Compute Discount Instruments
11. ● Often managed by finance
● Starts ~$500K/yr gross commit with rates set
according to tiers (e.g. non-negotiable until
you’re spending well over $10MM/yr).
● Higher discount for higher commitment tiers &
longer commitment term
● Negotiable in certain facets, not at all in others
● Often accompanied by programs & credits (e.g.
Migration Acceleration Program)
● Co-term with 3-year compute discounts
instruments for maximum negotiation power
at renewal.
11
#2: EDPs AKA Cross-Service Private Pricing
Top Three Ways to Save on Cloud Costs: #2
12. ● Engineering driven, hands-on work
● Takes effort to identify
● Low-hanging fruit vs. long-term projects
● Done at the opportunity cost of other
projects
● Cloud surveys have estimated an
average org’s waste to be around 30%
(not all waste is addressable waste)
12
#3: Eliminate Waste
Top Three Ways to Save on Cloud Costs: #3
13. ● Delaying Savings: Savings are dollars over time. Start with
usage that will persist and take advantage of flexible
discount mechanisms.
● Overcommitting: Don’t overcommit on your EDP and limit
your savings with Reserved Instances or Savings Plans (it
happens often!). Likewise, don’t overcommit with a rigid
discount instrument (like a Savings Plan) when your
compute usage may decrease (gift card analogy)
● Not Negotiating on EDPs: Discount tiers are fixed, but
other areas are negotiable (support type, growth targets,
individual years vs overall commitment)
13
Biggest Cost Savings Mistakes
15. 15
Industry
Standard
Coverage ≤ 60% 95+%
Utilization 90+% 99+%
Discount Rate ≤ 30% 50+%
Effective Savings Rate ≤ 20% 40+%
Our superpowers and how we
help customers
Flexible commits with high discounts, 99%+ utilization & 95+%
coverage
Base Compute Savings Plans
Flex RIs
$
Usage growth is covered
with flexible
commitments
Usage declines
addressed by reducating
the commitment
amount
Time
15
16. Our AIOps platform enables autonomous outcomes that are not
possible with manual reporting and recommendation tools
Data Ingestion
Telemetry from computing
environment
Optimization Algorithms
Constraint programming AI
Execution Engine
Reliable concurrency control
System Overview
The AIOps platform that automatically delivers optimal outcomes
16
17. 17
98th
+
Percentile
ProsperOps
drives Effective
Savings Rates to the
17
More prosperous the longer you subscribe.
Simple, fully autonomous experience.
Our software does the work, you get the outcome.
Minimize commitment risk.
Flexible vs. rigid commits.
Maximize cloud savings.
Add money back to your cloud budget, net our charge.
ProsperOps automatically delivers Effective Savings Rates of
40+% while minimizing commitment risk
18. Success Story from a ProsperOps Customer
Mike Surma
Director of Cloud Cost
Optimization
Forcepoint
18
Customer Success Story