With the evidence of recent years, few would now question the ability of Cloud to provide valuable solutions to a huge variety of use cases from the small and simple to the large, complex, global and business-critical. As a result, organisations have turned to the cloud to leverage the security and resilience investments cloud providers can afford to make at their economies of scale; harness their global reach and scale; take advantage of the wide-ranging, easily accessible functionality; or just avoid large up-front costs and risks of deploying their own hardware and software stack. Capability, potential and even evidence of previous similar use alone do not guarantee success. Key to success in the cloud is the creation of an environment that encourages innovation and agility but that does not do so at the cost of governance and assurance control. When applied to the cloud, many of the traditional methods of providing this control actually impede innovation and agility and conflict with many of the benefits cloud can bring. Just as technical staff need to adjust the way they work to fully harness the power of the cloud so must business and finance teams.
The principles of this are well documented in the industry, most comprehensively in describing a “Cloud Centre of Excellence”. Where others provide cloud technical support, we specialise on business and finance to give new governance and assurance controls specifically designed to operate with the requirements and nature of the cloud. Below we will discuss the role we play in supporting our customers and partners in the delivery of what we consider to be the three key pillars for successful cloud adoption:
- Financial Optimisation: the provision of a clear and transparent view of spend, trends and distribution by customer, application or department as required to validate spend, ensure cost savings are pursued at every opportunity and all available economies of scale are realised across the organisation as a whole.
- Technical Excellence: leveraging the technical capability of cloud services in a manner that delivers the required business outcomes, with the appropriate level of security and availability for the specific application in question.
- Portability: just as cloud platforms are developing at a great pace so are the requirements of the innovative, agile organisations using the cloud to maximum effect. Having the ability to reevaluate and take action to deliver continual improvement is therefore paramount. That might be in the way that services from one cloud provider are used or indeed in being able to move workloads between cloud providers.
We provide the Financial Optimisation pillar working with the required technical expertise be that direct at the customer or through partners to provide cost management and optimisation that supports efficient, sustainable use of the cloud. Our Financial Solution Architects have technical backgrounds but have been trained to focus on the financial. They are ideally placed to form a bridge between technical and business teams who often appear to speak entirely different languages given their different perspectives and priorities.
The financial optimisation strategy should seek every opportunity for cost-saving, be able to demonstrate how it does that and provide robust reasoning behind procurement decisions. This multi-faceted approach can broadly be summarised in terms of:
- Procurement: Delivering at the scale of the main cloud vendors requires a high level of standardisation in the terms under which services and resources are sold. This standardisation is at a vendor, not industry, level and is therefore not necessarily consistent between vendors or indeed with customer’s procedures and policies. For some customers operating in highly regulated/standardised environments, this can be a barrier to cloud adoption. Ideally, a means by which internal conditions can be met should be introduced that avoids multiple negotiations with different vendors. At best these delay time to value and at worst prevent use a particular cloud capability as large vendors are often unwilling to introduce non-standard terms.
- Lifecycle: Cloud workloads progress through multiple stages of maturity throughout their lifecycle. Those stages being from initial migration/proof of concept development to operation and industrialisation, to relative stability and minor refinement. At each of these stages, the opportunities for cost optimisation will vary. This can be in the form of cloud vendor initiatives and schemes; to use of particular resources or regions; to discounts possible by making commitments on resource utilisation. Careful scrutiny of lifecycle stage, business and development plans and the dynamic cloud vendor landscape is required to maximise the cost-saving potential for each application.
- Economies of Scale: Restricting cost saving assessment to individual application lifecycle has the potential to miss the organisation-wide savings possible. Without a common procurement framework, overall organisation spend may not be recognised by cloud vendors as a collective and hence miss volume discounts. The risk of making resource commitments for individual workloads with fluctuations in usage may prevent the realisation of the significant discounts commitments attract. This can be avoided by implementing appropriate cost and savings attribution mechanisms backed by a risk management approach to evaluate procurement and consumption at a macro level. This approach can support both the negotiation of overall consumption cloud vendor discount agreements, portfolio savings or a hybrid.
- Reporting and Auditing: This is vital to identifying cloud costs, trends and distribution with the ability to flexibly attribute spend, credits, and discounts by logical groups such as customer, department, project or cloud vendor. This makes it possible to challenge costs internally or with the vendors; provide charge or show back as required, and to demonstrate robust governance procedures for spend justification and overspend risk management.
This is the area where we provide our expertise in removing the procurement barriers to the cloud (”Financial Adaptor”), providing clear insight into cloud spend trends and anomalies (“Clarity & Transparency”) and using a range of techniques to ensure cloud spend remains optimal (“Managed FinOps”). Importantly these Financial Operations, “FinOps”, services do not solely rely on our analytics engine to automate recommendations but instead our Financial Solution Architects, “FinSAs”, work with you to provide context around the tools. This ensures that rather than receiving impractical recommendations that are difficult to implement or that fail to accommodate your wider plans, you gain insight against which you can act to bring immediate benefit. Our recommendations are also backed by our unique approach to cloud resale which enables us to offer terms and savings not possible when buying directly from the cloud vendors or other standard resellers. We would be happy to explain how we provide you with this extra flexibility and savings potential whilst also being able to offer many of our value-add services free of charge. We will also perform a free assessment to quantify the savings we could make you.
Technical Expertise: The nature of (i.e. delivered by an internal team or external partner) and means of evaluating suitability and expertise of technical employees/partners is key as there will be a broad range of skills required. This will potentially make it difficult to serve from a single team or partner. There will be migration specialists required for legacy applications with associated decisions around the method of migration (e.g. “lift and shift” or “transformation” with the associated risk, benefit, timescale and operational model tradeoffs). There will also be development specialists for the design, build and delivery of new applications tapping into the innovation opportunity. In both broad scenarios, the technical partner will need to be able to integrate with business as usual operational procedures to provide support levels to agreed and measurable service level objectives. Initial and ongoing evaluation of partners should also consider the procedures in place for identifying and delivering opportunities for continuous improvements.
Business Service Requirement: Any technical evaluation can only begin with a clear understanding of the service requirements from the application workload in question. This will comprise the business outcomes that must be delivered but on a technical side will need to ensure the application and associated data is afforded the correct level of security provision. This can be defined by:
- Setting physical, technical and administrative controls, with mechanisms for
- Prevention, detection and recovery from failures, attacks or near misses that are all focused on
- Maintaining the confidentiality, integrity and availability of data appropriate to the criticality and sensitivity of the application under review.
Application Mapping: Defining a strategy for a particular application requires an understanding of the data flows not just within it but between it and the other applications, data sources and output systems with which it must integrate. The level of integration can be one of the most significant factors determining how it should be built/migrated and which platform (be that public or private cloud) it should be housed upon. Factors that influence this are efficiency of integration and speed and security of information exchange. When considering legacy applications there is an additional question to determine the most appropriate roadmap. Typically this is described in frameworks such as the 6Rs (Rehost, Replatform, Repurchase, Refactor, Retire and Retain) to evaluate how best to deliver the required business outcome (e.g. cost-effective, efficient delivery and quantified risk profile).
Cloud Vendor Selection: The hyper-scale cloud providers are developing capability so quickly that this landscape is constantly changing. The output from the above three elements, therefore, provides the criteria on how best to determine which platform (cloud or otherwise) to select. This ensures that there is a clear definition of skills, functionality, interoperability and delivery strategy from which to make platform assessments.
While we work with engineers to promote “cost-conscious design” and understand the technology we are not a technical services provider. We expect that technical expertise to be provided by customer teams, our FinOps Partners or Teaming Partners. We combine with our FinOps Partners to provide an “Outsourced Cloud Centre of Excellence” or introduce Teaming Partners with whom we have developed experience of their expertise in particular areas of cloud technology and solution delivery. These partnerships are used to either augment customer teams or act as an entirely outsourced function on a customer’s behalf.
The strength of this technical and financial framework is that it provides a transparent means by which plans can be built, decisions can be evaluated and performance can be assessed. Contracts and approaches must, therefore, be designed to provide the flexibility and portability required to adapt as the landscape changes so that:
- Applications: can be deployed differently, either within (e.g. use newer/more cost-effective cloud resources) or between cloud vendors.
- Cloud Vendors: can easily be incorporated into procurement processes to ensure that opportunities and potential technical solutions are limited only by the capability of the cloud provider, not the organisation’s ability to consume those services.
- Partners: either technical or financial, can be replaced when performance criteria are not met.
We embrace this by offering greater flexibility on cloud purchasing terms than available direct from cloud vendors. In this way, customers can operate on terms more consistent with other areas of their organisation and there is a higher degree of alignment between cloud vendors when operating in a multi-cloud environment. Our common approach to invoicing and reporting not only provides more context on usage, trends and anomalies but also follows a unified approach to make it easier for internal business and finance teams interpret the results in a multi-cloud environment.
We hope you found some of the information introduced here useful and that it clarified where we might be able to help in your cloud adoption journey. You may also find our whitepaper on cost management and optimisation useful but we would welcome the opportunity to talk with you directly.