Practical FinOps in Practice

PRACTICAL FINOPS
IN PRACTICE
petri.kallberg@nordcloud.com
02/2020

“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.”

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

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.

WASTE MANAGEMENT
• Unattached (or overprovisioned) EBS volumes.
• Aged Snapshots.
• Unassociated IP addresses.
• Idle Load Balances.
• Underutilized EC2/RDS Instances.
AUTOMATE, AUTOMATE, AUTOMATE!

SCHEDULE & RIGHT SIZE
• Measure CPU, Memory, Network, IO …
• Automated scheduling can be very effective.
12h * 5 days (60h) vs 24h * 7 days (168h)
• Stop vs Hibernate
• Upgrade to current generation instances.
• When there is no small-enough instance
consider serverless and/or sharing.

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)

SAVINGS PLANS
• First understand your steady-state
consumption and 12 month roadmap.
• 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 !!!

WHAT COST TO USE?
Unblended, Amortized, Blended, Net Unblended or Net Amortized ?
RI purchase

EXAMPLE - S3 LOGGING
• Requirement:
S3 buckets must have access logging!
• But don’t configure access logging for
your log storage bucket!

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!

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 (-$20)
• NAT(s) -> Transit Gateway Attachment (-$60)
(+ $105 for 3 shared NATs)
= $45/vpc/month when idle.

EXAMPLE – SERVERLESS REFACTORING
(serverless, as no servers to manage)

SUMMARY
Complexity/Effort
Cost Impact
Savings plan
Reservations
Rightsizing
Scheduling
<------------ Re-Architecting ---------->
Spot Instances
???
Waste
Management

THANK YOU!
Email: petri.kallberg@nordcloud.com

Practical FinOps in Practice

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