Moving infrastructure to the cloud offers tremendous opportunities for business growth. The possibility of scaling resources and having unlimited access to infrastructure are usually on top of the pros list. However, if not approached properly, what can be the boon can also be the bane. Allocating resources over capacity, blundering among different ways of billing services, losing control over expenses, and lacking effective monitoring—they all lead to generating additional, usually unnecessary costs, which can effectively hinder your processes and block your company from achieving its strategic goals. Luckily, such a scenario can be easily prevented if you hit the road called cloud cost optimization, i.e., FinOps.
From this article, you will learn the most useful tips and tools on Google Cloud that can help you keep your spend in check and still make the most of what the cloud gives.
What is FinOps?
FinOps, by definition, means a range of operational methods and cultural best practices for financial cloud management. Its goal is to provide information about costs, ensure cost optimization, and implement measures to control cloud spending while maintaining maximum cloud business value. In other words, FinOps helps you find a middle ground between taking advantage of cloud flexibility and straining it. Too much freedom wastes resources and crosses your budget boundaries, but too much control may impede the potential gains of cloud adoption.
Turning to FinOps approach actually means developing a new mindset, which changes the way your organization operates now having the cloud on technology board. While being relatively new among trends in the cloud computing market, it has already gained great popularity and redefined many business strategies. There is no surprise—introducing the practices to the organization brings many benefits, such as:
- gaining control over spending,
- eliminating bottlenecks in the budgeting process,
- maximizing the return on investment from the cloud,
- consciously adjusting resources to current needs,
- understanding the correlations between processes and costs,
- making the right insight-driven decisions related to both business and technology.
Having clarified the definition of FinOps, it's essential to consider its application within specific cloud environments, such as Google Cloud.
Cost optimization on Google Cloud
On Google Cloud, FinOps serves as a strategic framework for taking advantage of the platform's range of services and features to drive cost efficiency and business value. Leveraging Google Cloud's robust cost management tools and real-time analytics capabilities, organizations can gain granular insights into their cloud spending and make informed decisions to optimize resource allocation. The collaborative nature of FinOps aligns perfectly with Google Cloud's philosophy of teamwork and innovation. By embracing FinOps on Google Cloud, organizations not only enhance their financial agility but also unlock new opportunities for innovation and growth in the cloud-native landscape.
To measure the effects of incorporating FinOps into the organization, Google defined five key success metrics:
- Accountability and enablement
- Measurement and realization
- Cost optimization
- Planning and forecasting
- Tools and accelerators
Using different tools within the Google Cloud Platform helps achieve each of them. Let us guide you through some of them we find the most useful.
Accountability and enablement
This metric focuses on educating teams and analyzing actual spending. Accountability involves establishing clear processes, guidelines, and mechanisms to track and monitor cloud costs. Enablement is more about empowering teams with the tools, knowledge, and resources needed to make informed decisions, drive continuous improvement in cloud financial management, and realize business value.
Useful tools
- The FinOps Hub: The dashboard panel that shows your actual spending and active savings based on gathered data. It indicates optimization opportunities along with helpful practices such as turning off idle resources, right-sizing instances, and purchasing committed use discounts (CUDs). It also shows your FinOps score, i.e., the points you’ve earned based on how you follow optimization best practices.
- Big Query: Data warehouse solution that allows you to analyze large volumes of data, making it ideal for analyzing cloud-spending data and identifying cost-saving opportunities. Set up data export to BigQuery as early as possible to ensure data storage, easy analysis, and visualization.
- Labels: The labeling strategy helps you identify resources. All projects should be properly labeled to ensure transparency, help attribute resource use, and make sure the right teams are paying for the cloud services they use.
Measurement and realization
Measurement encompasses collecting and analyzing data related to cloud usage. This includes tracking expenditures, resource utilization, workload performance, and other relevant metrics using cloud monitoring and analytics tools. On the other hand, realization involves interpreting the data to identify cost-saving opportunities, optimize resource allocation, and improve operational efficiency.
Useful tools
- Cost Management Tools: Google Cloud offers various cost management tools, such as Google Cloud Billing, Cost Explorer, and Billing Reports. These tools provide detailed insights into cloud spending, allowing you to track costs, analyze trends, and forecast future expenditures.
- Cloud Monitoring: Google Cloud Monitoring enables you to monitor the performance and state of your cloud resources in real-time. It provides metrics, dashboards, and alerts that help you understand how your cloud workloads are performing and identify areas for optimization.
- Cost Breakdown: Ready-to-use billing reports that allow you to view costs by billing month, including taxes and other charges at the invoice level. Budget effectively, using the forecasting function to show an intelligent forecast based on cost history and selected filters.
- Google Data Studio: SaaS solution provided by Google that can integrate with multiple data sources, including BigQuery. When you enable billing exports to BigQuery, you can link custom dashboards to interpret the data.
Cost optimization
Cost optimization involves mainly the practices and strategies aimed at maximizing efficiency and minimizing expenditure associated with cloud usage, such as rightsizing resources to match workload demands, leveraging discount options, and implementing automation to eliminate waste and improve operational efficiency.
Useful tools
- Cost optimization strategy:
- Management: Use tools (native or Google Cloud) to view usage metrics to appropriately size the cloud environment from both storage and processing perspectives (for example, auto-scaling in managed instance groups, time-sliced tables), and identify idle or oversized resources.
- Serverless services: Use serverless technology where possible to reduce the load on the infrastructure.
- Discounts: Provide you with cost-saving opportunities based on their usage and commitment levels. Google Cloud offers various discount options, such as Committed Use Discounts (CUDs), Sustained Use Discounts (SUDs), and Preemptible VMs.
- Responsibility: Consider the expense reimbursement burden on different departments and teams to make sure departments consider the total cost of ownership versus ROI.
- User permissions: To effectively manage costs, limit the number of people who can use billing accounts. Billing roles can be managed at the organization level using the organization's billing account administrator, creator, or user roles.
- Guardrails: Passive controls that enable you to control what your organization spends.
- Budgets: Budgets can be set for a billing account or project. Once you set a monthly budget, you can set custom alert thresholds (for example, 50%, 75%, or 100%). Reaching the budget or threshold does not affect the resource limitation, as they continue to operate normally.
- Alerts: Alerts can be used with third-party or in-house cost management solutions, as well as with Google Cloud services.
- Quotas: Hard limits applied per resource type and location to prevent abuse and accidental usage. It protects users against undesirable effects, preventing unforeseen spikes in usage.
Planning and forecasting
Planning and forecasting means the proactive assessment and prediction of future cloud usage and costs. It includes activities such as modernizing the process of budgeting, analyzing historical usage data, projecting future resource needs based on business growth and seasonality, and forecasting potential cost fluctuations based on changes in pricing models or usage patterns.
Useful tools and tips
- Use cost reports to understand projected short-term growth.
- Use BigQuery to analyze your monthly expenses, and use these and other relevant factors to determine what your monthly growth might be. A visualization tool such as Data Studio can also be helpful.
- Use third-party tools to effectively track your spending against a defined annual budget to see if your spending is increasing at the expected rate.
Tools and accelerators
Tools and accelerators refer to the technologies, solutions, and methodologies used to streamline and enhance cloud financial management processes, for example, cloud cost management platforms, automation scripts, optimization algorithms, pre-built templates, scripts, or libraries designed to expedite common tasks such as cost analysis, budgeting, or resource provisioning on Google Cloud.
Useful tools
- Active Assist: A list of tools that helps you optimize your cloud operations with recommendations to reduce costs, increase performance, improve security, and help you make more sustainable decisions, e.g.
- Idle VM & PD Recommendations: Identifies and recommends actions related to unused resources, helping you to disable idle VMs and remove or archive idle disk resources.
- VM Rightsizing Recommendations: Identifies and optimizes excess resources, as well as indicates appropriate VM sizing based on your historical utilization data.
- Committed Use Discount (CUD) Recommender: Shows an optimal quantity and period based on consumption, projects potential changes, and can give you up to 70% savings.
- BigQuery Slot Recommender: Shows an optimal billing model based on consumption and savings through monthly or annual commitments, enables capacity reservation in advance, and allows for an unlimited number of requests.
As your cloud operations grow and become more robust, the need to spend efficiently increases. Not surprisingly, the FinOps methodology is gaining in popularity and continuing to evolve, bringing along many benefits; therefore, constantly monitoring and auditing your cloud environment should become your daily routine.
The above-mentioned tips and tricks within Google Cloud can help you make the first (and further) step towards FinOps proficiency. As a strategic Google partner, OChK experts can also help you efficiently manage your cloud spend, regardless of the size of your company or the industry you operate in. If you feel like needing a helping hand, feel free to contact us at startups@ochk.pl or sign up to our Let’s get (c)loud program.
