In a recent blog post I described why you need a quarterly cloud cost tune-up. In short: Your cloud environment is dynamic with new services being added continuously. The cloud providers add new generations of services, new licensing options and changed discount programs. Hence, these dynamics requires a dynamic cost optimization approach.
The question of the week is who should be responsible for the quarterly tune-up? And if you remember my question from last week … how do you get it done in 3 hours?
What are other companies doing?
From our research and customer work we have found that the budget more often than not is owned by the CIO, Head of Infrastructure, or in some instances in a Cloud CoE (Center of Excellence). Sometimes procurement has some responsibilities in price optimization as well and even Finance is occasionally involved.
However, what is almost always true is that the teams actually deploying services to cloud are essentially responsible for the cost optimization effort – irrespectively of who has the budget or process ownership.
Is this really the right way?
Or put differently … should the same people who are responsible for deploying new services and their technical operations, spend weeks every month on all the tasks associated with cost optimization, ie. the addition of new services, license models, discount model changes, discount percentages changes, migration options, redundancy options, reservation utilization, reservation rebalancing etc.?
The answer is no.
Why? Because the one thing customers tell us more than anything else is: ”My focus is on deploying to cloud. We are so stretched for resources, we have to keep our focus where we grow the business and put new services and features in play”.
Another option is to turn to the company providing you with cloud services or cloud services operations. We have numerous examples that this from a cost efficiency stand point is not an optimal solution. Consider that they often get paid based on how much you use, and this may have the potential to influence how much of a priority they give to reducing what you pay (and consequently what they make). And again, they too are short of ressources, and prioritize their time in accordance with your priorities – getting things running in cloud.
Either way, the result is that money are left on the table. Money that could be put to much better use.
What are the most successful companies doing?
“The companies that best combine speed and agility with cost efficiency have realized that you should not burden the DevOps or infrastructure teams with an ongoing task of cost optimization. Rather this is done as a Tune-Up, quarterly or monthly, where you review what has been provisioned and ensure this is purchased in the optimal way.”
The most crucial thing is to establish clear responsibility for not only budget ownership, but in particular the process of getting the quarterly tune-up done. This responsibility typically sits in the CIO office, with IT managers/architects or in procurement.
Who is responsible in best-in-class-companies?
Budget ownership is not the critical part. What really distinguishes successful companies are that there is clear authority to get the tune-up done. This authority is typically held and exercised by the CIO or procurement. They typically rely on external assistance, so that the tech teams can focus on building and operating cloud solutions.
And of the two areas of responsibility, what really distinguishes successful companies are that there is clear authority to get the tune-up done. They do not waste valuable time discussing if it is necessary. They just get it done.
And the way they get it done is always with some level of external assistance.
Because a quarterly tune-up requires massive data collection and analysis, which is quite generic – and it is simply not cost efficient to do this internally.
To illustrate this: Kostner offers a Quarterly Tune-Up service where you and your team only need to spend 3 hours every quarter on cost optimization. Yes, three hours. The time you free up, you can spend on delivering services to the business. This is a great way of balancing speed with cost efficiency.
What is critical when selecting external assistance?
Make sure the provider is focused on cloud cost optimization, so you do not a) have to pay for “generic” efforts (gathering data or building a tool). b) get recommendations that are not technically feasible, and c) have conflicting interest with your intent to save on cloud
In larger enterprises we sometimes meet dedicated teams, frequently known as FinOps teams. However unless you run a (very) large cloud environment, odds are, you can’t dedicate a person (let alone a team) to this alone.
Even when there is a dedicated FinOps team they almost always rely on external assistance. Typically they focus on the larget ticket items and rely on external assistance for finding additional savings, and providing an independent proof, that they are running a cost efficient cloud setup.
What should I do from here?
Well, this really depends on why you are here. A few ideas might be to:
- Learn more about cost optimization and the quarterly tune-up. You might want to participate in a free webinar on this, or continue reading the blog.
- Assess your potential for savings. In our universe we would recommend that you simply order a free trial. You will need 2*30 minutes and get a complete review of your environment. No credit card required. No hidden subscriptions.
- Discussion with your colleagues if a Quarterly Tune-Up is relevant for you. Again, if you want we are happy to host a facilitated discussion of this where you can ask all your questions. Book a meeting.
… or you might want to do something completely different.
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