Mastering cloud costs: A practical guide to FinOps best practices

Cloud costs can quickly spiral out of control, but FinOps best practices offer a way to rein them in. In this post, you’ll learn how to understand your cloud costs, implement budgeting and forecasting, optimize your resources, and foster a culture of cost awareness.

Understand your cloud costs

The first step in optimizing cloud costs is understanding where your money is going. You need to get visibility into your spending across all cloud services and accounts.

Use cost management tools

Tools like AWS Cost Explorer or Azure Cost Management can help. These tools offer detailed insights into your usage patterns and expenditures.

Why this matters

You can’t manage what you can’t measure. Cost management tools provide the data you need to make informed decisions. For example, you might discover that a particular service is consuming more resources than expected.

Implement budgeting and forecasting

Once you have visibility into your cloud costs, the next step is to set budgets and forecast future spending.

Set budgets

Start by allocating a fixed amount for each service or project. Make sure to include a buffer for unexpected expenses.

Forecast future spending

Use historical data and growth projections to estimate your future cloud costs. This helps you plan for upcoming expenses and avoid surprises.

How this helps

Budgeting and forecasting ensure that you stay within your financial limits and can adjust your spending as needed.

Optimize your cloud resources

Now that you have a clear picture of your spending and a budget in place, it’s time to optimize your cloud resources.

Rightsize your instances

Ensure that you’re using the right instance types and sizes for your workloads. Oversized instances waste money, while undersized instances can lead to performance issues.

Use reserved instances

If you have steady-state workloads, consider using reserved instances. These offer significant discounts compared to on-demand pricing.

Real-world example

A company moved its steady-state workloads to reserved instances and saved 30% on its cloud bill.

Clean up unused resources

Regularly review your resources and delete any that are no longer in use. This includes unused storage, idle virtual machines, and orphaned snapshots.

Why this is important

Unused resources can add up to significant waste. Cleaning them up frees resources and reduces costs.

Foster a culture of cost awareness

Finally, encourage a culture of cost awareness within your organization.

Educate your team

Make sure everyone understands the importance of cost optimization and knows how to contribute.

Implement a governance framework

Establish policies and procedures for cloud resource usage. This includes approval processes for new resources and regular audits.

Long-term benefits

A cost-aware culture leads to continuous improvement in cloud cost management.

Conclusion

By understanding your cloud costs, implementing budgeting and forecasting, optimizing your resources, and fostering a culture of cost awareness, you can significantly reduce your cloud spend. FinOps best practices provide a roadmap to achieving these goals and ensuring your cloud investments deliver maximum value.