Practical FinOps in Practice
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This document discusses practical FinOps strategies for cloud cost optimization. It defines FinOps as bringing financial accountability to cloud spending by enabling teams to consider speed, cost and quality tradeoffs. It outlines key stakeholders in FinOps including engineers, product owners, executives and procurement. It then details various cost optimization techniques ordered from least to most complex, including savings plans, reservations, rightsizing instances, scheduling, waste management, spot instances, and rearchitecting services. Examples provided illustrate automating access logging and tagging, reducing idle VPC costs, and serverless refactoring.
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Practical FinOps in Practice
- 2. “FinOps is the practice of bringing financial accountability to the variable spend model of cloud, enabling distributed teams tomake business trade-offs between speed, cost, and quality.”
- 3. JANE SMITH Engineering Focus on building and supporting services. Efficient design and use of resources via such activities as rightsizing, allocating costs, finding unused resources, and identifying spending anomalies. JOHN SMITH Product/Business Owner Business owner needs to understand cost implications of features/services provided to clients, but also provide visibility of product roadmap and growth plans. PETER SMITH Executive Executives like a VP/Head of Infrastructure, CTO or CIO focus on driving accountability and building transparency, ensuring teams are being efficient and not exceeding budgets. SALLY SMITH Procurement Finance and procurement team members use the reporting for accounting and forecasting. Needs forecasts and expertise for rate negotiations with cloud service providers. MEETTHESTAKEHOLDERS
- 4. PROCESS IN THEORY INFORM Empower teams with visibility. Make sure decisions are data driven and informed. Promote best practices with transparency. OPTIMIZE Manage your waste. Right size. Apply scheduling. Utilize Reservations and Savings Plans. OPERATE Evaluate objectives. Validate metrics. Analyze trends. REPEAT Continuous evaluation of objectives and results allows to improve the process and fill in the gaps.
- 5. INFORM
- 6. WASTE MANAGEMENT • Unattached (or overprovisioned) EBS volumes. • Aged Snapshots. • Unassociated IP addresses. • Idle Load Balances. • Underutilized EC2/RDS Instances. AUTOMATE, AUTOMATE, AUTOMATE!
- 7. SCHEDULE & RIGHT SIZE • Automated scheduling can be very effective. 12h * 5 days (60h) vs 24h * 7 days (168h) • Stop vs Hibernate. • Measure CPU, Memory, Network, IO … • Upgrade to current generation instances. • When there is no small-enough instance consider refactoring to containers, serverless …
- 8. RESERVED CAPACITY • EC2 Reserved Instances • Discounted hourly rate • Optional capacity reservation (but less flexibility) • Standard, Convertible or Scheduled RIs • Remember also other services • RDS • Redshift • ElastiCache • DynamoDB • CloudFront (>10TB/month for 12 months)
- 9. SAVINGS PLANS • Similar savings to reserved instances (RI) • Compute Savings Plans apply to all instances*, regardless of family, size, OS or region. • Hourly(!) monetary commitment. • Reservations are still relevant because • SPs cover only EC2 and Fargate usage • You can apply both to EC2 !!!
- 12. EXAMPLE - S3 LOGGING • Requirement: S3 buckets must have access logging! • But don’t configure access logging for your log storage bucket!
- 13. EXAMPLE - CLOUDTRAIL AUTOMATION • Requirement: Resources must be tagged with owner/creator identification! • Lambda triggered from Cloudwatch & Cloudtrail would do this automatically. • And when tested it did cost us “nothing” • Until the security requirement to deliver Cloudtrails to central archive!
- 14. EXAMPLE - VPC OVERHEAD • Sandbox VPC • 2-6 Subnets ($0) • 1-3 NAT Gateways ($35/month each) • EC2 Bastion Host ($20/month) = $55-$125/vpc/month when idle. • Bastion -> SSM Session Manager • NAT(s) -> Transit Gateway Attachment (+ 3 shared NATs)
- 15. EXAMPLE – SERVERLESS REFACTORING (serverless, as no servers to manage)
- 16. SUMMARY Complexity/Effort Cost Impact Savings plan Reservations Rightsizing Scheduling <------------ Re-Architecting ----------> Spot Instances Waste Management 1. Savings plan 2. Reservations 3. Waste Management 4. … OR 1. Re-Architecting 2. Spot Instances 3. Waste Management 4. Reservations 5. Savings plan
Editor's Notes
- Engineers want to do “best possible” while business needs good enough with low-cost. Procurement role is getting smaller and variable spend will make them feel uneasy. Executives want to know if ”everything is ok (=as planned)”
- Empower teams with visibility. Make sure decisions are data driven and informed. Promote best practices (with correct cost allocation).
- Unattached volumes -> Delete (potential security risk too) Snapshots -> Configure AWS Backup Unassociated IPs -> Delete, consider using DNS names instead. Idle LBs -> Delete or Convert to shared ALB? Underutilized instances/dbs -> Collect CPU/Memory/IOPS data so you know where to schedule and right size. Waste created is because automation is missing (=no need to worry about breaking anything) or broken (=get it fixed).
- If you don’t have data, there will be excuses. Scheduling works for EC2 AND RDS(!) Current gen gives typically more CPU/Mem/Network for lower price (but can require OS update) Aurora Serverless, ECS Fargate, Lambda … Sharing resources (e.g. DB) between projects is somewhat anti-pattern that should be used with care.
- * including Fargate!
- Unblended costs represent your usage costs on the day they are charged to you. For most of you, this is the only cost dataset that you will ever need. Amortized costs is especially useful for those of you who have purchased AWS Reservations Blended costs are calculated by multiplying each account’s service usage against something called a blended rate. A blended rate is the average rate of on-demand and reservation-related usage that is consumed by member accounts in an organization for a particular service. The net unblended cost dataset reflects usage costs after discounts are applied while the net amortized cost dataset adds additional logic to amortize discount-related information, in addition to your Savings Plans or Reservation-related charges.
- Typically you improve by reducing spikes -> compare with on-demand cost. (it also makes you look better)
- “Run fault-tolerant workloads for up to 90% off” Combine Spot Instances with On-Demand and Ris No bidding -> less interruptions. Instances are only interrupted when on-demand/ri customer needs it.
- Search for github for autotag, e.g. https://github.com/GorillaStack/auto-tag Only the first copy of Cloudtrail is free.
- This is TGW outbound services vpc –pattern. Alternative could be sharing VPC with RAM.
- Sharing resources (ALB, DB etc) is an anti-pattern. Use it wisely!
- You can not justify all the effort with just the savings. This is about tech.debt pay-back as well.
- Red arrow is order of dependencies, green-arrow is order of return-of-investment.