Cloud cost saving recommendations: Where to start
When working with customers to assess cloud spend management and usage, one of the outputs we produce is a set of recommendations that could help to optimise spend to increase business value. The sum of all potential savings are often large enough to get the attention of the executives and the temptation may be to try and implement all of the recommendations, as that is the steer from the leadership, however this is not something that we would encourage. This article will explain why aiming to get all the savings opportunities may not be the right thing to do and how you could approach the challenge of selecting the opportunities to implement. Whilst the focus of this article is predominantly on the engineering actions, all the personas involved in FinOps need to be engaged to make regular reviews of recommendations part of the organisations culture, continually improving processes and automation as you iterate.
The messaging around potential savings needs to be carefully managed as the potential maximum savings often get translated into ‘this is how much we will save’ rather than ‘this is how much we could save if all recommendations are valid for our needs’. Inputs from a broad range of teams including technical, product, finance and procurement are needed to assess the viability of being able to execute each recommendation and achieve the savings.
In most cases, there are multiple sets of recommendations but implementing all of them at once is not a sensible approach. You could end up purchasing series of commitment-based discounts (Reserved Instances, Savings Plans) for resources that you will also apply right-sizing, scaling as well as terminating, hence resulting in underutilisation (waste) of commitments. Knowing where to start can be confusing. Do you start with the commitment-based discounts or should you right-size and terminate idle resources before looking commitment-based discounts, or do you need to do both together?
Each organisation will have their own unique criteria and challenges so understanding these will help drive the strategy on how to approach the recommendations. An organisation that is growing fast and needs to increase cloud usage to support an aggressive 5-year growth plan could be comfortable with applying commitment-based discounts and start benefiting from those savings quickly. In contrast, an organisation which is in the middle of major transformation and uncertainty may concentrate on the recommendations which require least effort and no additional commitments.
Part 2 of this series will cover how to approach deciding what recommendations to implement in order to deliver against your organisations cost optimisation requirements.