A year ago, we highlighted the importance of businesses focusing on managing cloud costs for better profitability and sustained unit economics. Recently, we surveyed over one hundred customers and noticed a growing awareness of FinOps.
This mirrors the increased availability of literature, tools, and services in the market. Notably, Google Cloud introduced its FinOps hub, and early-stage FinOps startups globally raised over US$200 million to support growth.
At Searce, we’ve experienced a rise in demand for our FinOps services, managing cloud spending exceeding US$300 million as part of our managed services portfolio. Through our consulting services, we’ve noticed some emerging trends, and we’re excited to share them in this article.
In the above quadrant, marked in blue and orange, FinOps 101 addressed both low and high-effort, along with low savings areas:
- Achieving these often involves one-time activities and consulting, but we’ve identified a gap in sustaining overall estate optimisation.
- Our recommendations include implementing automated triggers, custom dashboards, or utilising tools like CoreStack and Ternary to ensure ongoing compliance.
- Additionally, the infographic above effectively addresses the need to enable a culture of cost consciousness throughout the solution creation process.
Application modernisation
Companies often migrate to the cloud without adapting their applications to be cloud-native, which results in them missing out on huge benefits. To unlock high-impact savings, a prime focus should be modernising application architecture. This involves an initial investment and requires a thorough discovery process with a solid business case.
Also Read: Debunking misconceptions about FinOps and cloud spending reduction
The option here can be:
- Refactoring: making small to medium-level application architecture changes using the current code base (e.g., transitioning from monolith to microservices, adopting a cloud-native API gateway, or utilising modern stacks like Firestore and Supabase).
- Redevelopment: Sometimes, the business case supports the redevelopment of the entire application due to a change in business requirements or technical debt accumulated. While this requires high upfront investment, it drives the best outcomes and can be done in phases. For example — we redeveloped a customer-facing application for a large telco, leading to an 80 per cent reduction in cloud storage cost.
- Challenges in modernising legacy applications arise because they rely on third-party vendors. There is an opportunity here involving pushing the vendor for updates or considering better cloud-native alternatives.
Automation: Infrastructure, deployment, testing, platform
Did you know that 60 per cent of any organisation’s IT budget goes into paying people and service vendors to get the work done? Surprisingly, when companies look into exploring FinOps, they often overlook this critical component in their cost structure. While digital native companies excel in this due to their cloud-native application development, enterprises find it challenging.
This can be curbed by using:
- Using Terraform to reduce infrastructure deployment time, making time to market faster.
- DevOps automation to bridge the gap between the development and infrastructure management teams. This means more releases, fewer weekend toils for developers, and lower costs for issue resolution.
- Testing automation to speed up the testing process with improved accuracy, reliability and overall quality. Testing automation reduces the time to run repetitive tests from days to hours, which translates directly into significant cost savings. Another major advantage includes an early identification of issues to avoid last-minute surprises. Overall, this helps reduce the time to market for any new or updated services in an optimised way.
- Platform and DevTooling — In large enterprises, tech teams often spend a lot of time developing components that other teams in different units have already developed.
The problem? Low reusability of code and tools. But, with cloud technology, platform engineering steps in to maximise business value. This reduces redundancy in development, enhances the developer experience, and handles overall technology debt. Take Spotify, for instance, which has developed Backstage.io, an open-sourced platform engineering approach for anyone to adopt easily.
It’s clear from our observations that mastering FinOps isn’t a destination. It’s a transformation journey powered by modernised applications and automated processes. Embrace continuous optimisation, unlock hidden savings, and watch your cloud become a cost-cutting superpower, propelling you to new heights of profitability and agility.
This article has been co-authored by Varun Mahajan, Marketing Business Partner at Searce.
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