3 ways you can cut your cloud consumption costs in half with FinOps

  • Posted on April 16, 2020
  • Estimated reading time 3 minutes
3 ways you can cut your cloud consumption costs in half with FinOps

In challenging economic climates, cost control quickly rises up the executive agenda. The current crisis will, if it hasn’t yet, result in many organizations looking to reduce costs as they aim to weather the storm. 

Complex billing systems and limited budget verification capabilities are already impacting companies, which struggle to understand their company’s cloud spend, with consumption potentially unlimited and purchasing fragmented. On top of that, the huge rise in remote working, (we’re not just talking Microsoft Teams here, everything now has to be accessed remotely) and therefore Microsoft Azure cloud consumption, means finance teams may find themselves hit with significant bills in the near future.

It’s easy to over-purchase cloud services without realizing it. 

Enter FinOps, often also referred to as cloud cost optimization. FinOps creates an environment where organizations can optimize their cloud expenditure, and breaks down the barriers between finance, development, and operations teams. The end results? Lower costs, and the ability to move rapidly to take advantage of opportunities without over-provisioning.

Based on Avanade’s direct experience, there are three core elements to effectively managing cloud costs:

  1. Optimization – reviewing current spend and reducing wastage quickly
  2. Visibility and control – a custom dashboard that gives you a constant overview, showing you what you are spending and where
  3. Governance – take back control with well-defined processes and roles so you can take action when you need to

It’s important to recognize that there is no one-size-fits-all approach. Every organization will need a custom optimization strategy with a clear direction to cut their Microsoft Azure cloud costs.

We’ve found that the vast majority of organizations are significantly overspending on their cloud consumption, this is also confirmed by analysts like Gartner, which states that companies are going to waste 75% of their cloud budget in the first 18 months of implementation. There are a few areas to focus on initially that can provide almost instant cost savings. 

The three most effective ways to cut costs quickly will be:

  1. Review and streamline
    • Streamline your subscriptions
    • Turn off your virtual machines when they’re not in use
    • Stop all unnecessary premium services
    • Delete orphan-managed disks
  2. Consume on demand
    • Autoscaling
    • Power scheduling
    • Storage optimization
  3. Check your sizing and fit size to your needs (you may not need everything you are paying for)
    • Azure Cosmos DB
    • Services pooling
    • VM resizing
    • Service resizing
    • Disk resizing

We’ve found that these steps can save around 50% of expenditure, within a few weeks. There are numerous other ways that initial savings can be made as well, too many to list in a blog, and every organization is different. Containers, building cloud native applications and knowing how to accurately estimate the costs when moving workloads to the cloud will help you to avoid surprises in the future.

Look out for the next in our series of blogs where we’ll talk about visibility, control, and governance and their roles in ensuring you stay in charge of your cloud costs.

Find out more about our cloud platform services here.

Kati Dougherty

Fabulously stated Simon!

April 30, 2020

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