Last June, in an interview with Javier Aguado, Global Cloud Director of MyCloudDoor (we recommend you don’t miss it), we were talking about the importance of implementing a cloud strategy at this time. FinOpssince as the manager told us, “it addresses the strategic management of costs and efficiency of cloud resources, allowing companies to maximize the value of their investments.”
The MyCloudDoor expert also told us that “although it is often confused with a cost optimization process,” it actually goes much further, since “it encompasses policies, tools and teams that manage the cloud from a financial point of view, taking into account everything from budgeting or preparing a project to its operation and evolution.”
The ultimate goal of this strategy is to help enterprises identify and eliminate unnecessary cloud costs, such as over-provisioning of resources and underutilization of instances. It also promotes optimization of cloud infrastructure architecture.
That said, there are a number of KPIs that we can take into account to determine whether our presence in the cloud is in line with what we really need or if, on the contrary, we are paying much more than we should and therefore, it is worth resizing our position or even returning to a more modern environment. on premises. And although it is ideal to do this assessment with the help of a partner who has a proven methodology, starting to know what these KPIs indicate will help us understand where we can improve. Thus, we can consider the following:
Key KPIs in FinOps:
- Cost per business unit or application: Measures the costs associated with each business unit or cloud application. This helps identify which areas are consuming the most resources and how to optimize them.
- Cost of use vs. Provisioned capacity: Evaluates the level of provisioned cloud resources versus those actually used. Low usage relative to provisioned resources suggests overprovisioning and unnecessary spending.
- Cost per environment (production, testing, development): helps you understand how costs are distributed across different work environments. This is key to identifying whether too many resources are being allocated to non-productive environments.
- Cost per team or project: Provides visibility into how individual teams or projects consume cloud resources, enabling better management of budgeting and resource allocation.
- Savings through reservations and discounts: Monitor savings from using reserved instances, long-term usage discounts, or programs such as Savings Plans offered by cloud providers.
- Cold vs. Hot Storage Cost: measures the costs associated with different types of cloud storage. Cold storage (for less frequently used data) is cheaper, while hot storage (for immediately accessible data) is more expensive.
- Data egress costs: measures the costs associated with transferring data from the cloud to the outside. These are especially important in applications that require large volumes of data.
- Savings through automation: Measures savings that result from automating cloud resource management (for example, shutting down virtual machines when they are not in use).
- Instance optimization (right-sizing): Tracks the optimization of computing instances, adjusting the size of virtual machines to actual needs to reduce costs.
- Total Cost of Ownership (TCO) y Return on Investment (ROI): TCO provides a comprehensive view of the total cost of cloud resources, taking into account both infrastructure costs and management and maintenance costs. ROI, on the other hand, tells us about the financial return generated in relation to the investment made in the cloud infrastructure.
Although all the KPIs we have mentioned will help us optimize our company’s presence in the cloud, probably the Cost of use vs. Provisioned capacity It deserves special attention and regular monitoring, because if the resources provided are not being used, the organization is incurring unnecessary expenses. This allows us to minimize the waste of resources and, without a doubt, optimize the budget.