A Proven 5 Step Cloud Cost Saving Approach

A Proven 5 Step Cloud Cost Saving Approach

Walter Beek Finants
Walter Beek
FinOps Consultant, CEO FinAnts Europe and The FinAnts Group

There are a lot of publications around Cloud Cost Saving. Most of them focus on an item or tool and very few provide customers with a holistic approach.

At FinAnts, we have developed a 5 Step Cloud Cost Saving Approach that works. And as it is an approach, it applies equally to AWS, Azure, GCP or any other cloud environment.

We identify 5 Core Cloud Cost Saving Activities:

  • Item Intelligence;
  • Good Housekeeping;
  • Uptime Optimisation;
  • Commitment Optimisation;
  • Contract Optimisation.

Re 1 – Item Intelligence

This is about making sure we understand each line item on the cloud provider invoice. We ask questions such as ‘Do we know what it is for?’, ‘Who owns it?’ and ‘Are there lower cost alternatives’? Going through Item Intelligence can be a challenge: it means asking questions that organisations are not always able to answer.

Re 2 – Good Housekeeping

‘Good housekeeping’ is about ensuring that recommendations from cloud providers and third-party tools are actioned. It involves looking at known items such as unattached IP address removal, storage policies and compute modernisation to save cost. We usually identify a number of ongoing Good Housekeeping actions and develop targets on recommendation implementation.

Re 3 – Uptime Optimisation

Many environments don’t need to be up 100% of the time. Optimising downtime is a major route to cost saving. It requires an intelligent approach to identify downtime schedules as well as an intuitive, user friendly approach to overwrite those schedules when required. Typically, this is where automation through a proven solution comes into play, and we represent what we believe is the best solution in the market.

Re 4 – Commitment Optimisation

Not using automation, you can get your environments to be covered around 80 – 85% by commitments through Saving Plans and RIs. That still leaves some 15 – 20% uncovered and running OnDemand. We deploy automation to bring your coverage to the maximum, without losing flexibility of scaling up and down usage. This is the last step in the process.

Re 5 – Contract Optimisation

There are a number of contracting options available to reduce cost. This can be directly with the Cloud Provider, or using a Third-Party Reseller arrangement. There usually is a trade-off between level of discount and level of commitment. We help organisations find a tailor-made solution that works best for them.

Recently we engaged with a customer who was already heavily Service Planned up, covering some 70% of EC2 Compute, Fargate and Lambda spend. Nevertheless, using this 5-step approach, we were able to reduce cost by a whopping 21% in the first 7 weeks. We are confident we can increase this to over 30% in 10 weeks and 35% in 14 weeks. This will release close to $230,000 of annual cloud spend that enables the company to build a sustainable Cloud FinOps Practice so as to ensure this level of saving is sustained.

And of course, Cost Saving is just a part of the overall FinOps set of activities you ideally deploy. However, in the Inform, Optimise, Operate set of FinOps Desired States, this is in our view the first one to focus on. It releases funds that will sustain a longer term and fundamental approach to FinOps.

Interested in exploring how this can work for you? Contact us:

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