We’ve been saying it for years, the benefits and potential of the cloud abound. 

And yet, more than 80% of respondents in a survey of 753 business leaders point to managing cloud spend as their top organizational challenge, and these same respondents estimate that nearly 1/3 of their cloud spend is inefficient or wasted (Flexera, 2023). Many organizations are new to optimizing cloud costs and ensuring resources are used efficiently.

As your organization digitally transforms you may be realizing what other organizations are realizing too: When it comes to business value, simply migrating to the cloud isn’t enough. Achieving the full benefits of cloud requires fundamental changes to both mindset and behaviors around existing financial-management practices. It requires changing the way your disparate teams work together. 

Enter the Cloud FinOps Building Blocks

Cloud FinOps is a framework, discipline, and cultural shift combining people, processes, and technology to drive financial awareness and accountability. FinOps practices align engineering, finance, technology and business leaders and teams under a primary objective: to maximize business value from the cloud. With Cloud FinOps practices, every business stakeholder is charged not only to take responsibility for their spending and costs, but also to optimize them. These practices enable businesses to manage consumption and make sound, data-informed cloud-spend decisions. Cloud FinOps is comprised of five building blocks:

1. Accountability and enablement
   Establishing governance and policies to manage cloud spend and realize business value.
2. Measurement and realization
   Driving financial accountability and value realization with a defined set of KPIs and success metrics.
3. Cost optimization
   Providing financial visibility and recommendations of IT resource usage to optimize cloud spend.
4. Planning and forecasting
   Modernizing budgeting, forecasting, and chargeback methods to allow for iterative, innovative and cost effective development practices.
5. Tools and accelerators
   Deploying and integrating a set of cloud cost tooling to effectively manage and track cloud spend. Learn more here. 

For a general overview of the Cloud FinOps framework and more on the five building blocks, check out these resources:

• Video | What is FinOps and 3 reasons why you should care about it.
  This 5-minute video provides an overview of FinOps, the 5 building blocks, and how they can benefit your organization. 
• Podcast | FinOps with Joe Daly
  In this podcast, Joe Daly of the FinOps Foundation shares about the key principles of FinOps, which he refers to as financial DevOps. Daly discusses how this framework is helping companies make better and more efficient financial decisions while taking advantage of the cloud.
• Blog | Decoding Cloud FinOps to accelerate digital transformation
  This blogpost discusses the critical role of FinOps in a successful digital transformation. It outlines key metrics to help measure and track business value and to increase visibility into the effects of digital transformation on top-line revenue. 
• Article | Cloud FinOps: The secret to unlocking the economic potential of public cloud
  This Forbes article profiles OpenX, the first major advertising exchange platform to migrate entirely to the cloud. It details the 5 key pillars of the Cloud FinOps framework, which OpenX leveraged in their digital transformation strategy. In just 9 months, they reduced their per-unit costs by more than 60%.  

Importantly, Cloud FinOps isn’t about saving money; it’s about making money. It’s about promoting a cost-conscious culture, financial accountability, and business agility in the cloud. Whatever stage of the cloud journey you’re at, cloud FinOps practices will help you get the most value out of Google Cloud. This framework can help to remove blockers, implement the building blocks, and empower your teams to make better business decisions. 

The Cloud FinOps Journey 

Implementing Cloud FinOps is neither a destination nor a box your organization will check then archive. Rather, Cloud FinOps is an ongoing journey and discipline. It’s inherently iterative. As such, growth and maturity across processes, capabilities, and domains requires action, repetition, and continuous learning. 

Across the five FinOps building blocks, we’ve identified 50 subprocesses to best understand organizations’ FinOps proficiency, capabilities, practice domains, and blind spots. We scale them from 1 to 5 and categorize them in one of three phases of maturity: Crawl, Walk, or Run. Organizations in the Crawl phase tend to focus on technical problem solving and cloud-cost visibility. Organizations in the Walk phase emphasize strategic improvements such as employing cost visibility dashboards to realize better business value. And organizations in the Run phase are focused primarily on transformational change and strategic innovation, factoring cost considerations into both processes and cloud architecture. 

Through this “crawl, walk, run” maturity model, we can evaluate proficiency, establish a benchmark, and recommend a targeted action plan for FinOps adoption. And whatever your level of maturity, your organization can take quick scalable action not only to foster improvement but also to evaluate outcomes and gain insights. 

The key here is that regardless of your organization’s Cloud FinOps maturity level, you can take small steps now toward continuous improvement. Here are some common focus areas and several more resources organized by maturity level that you can access.

Crawl phase 

Improve cloud-cost visibility. 

• Whitepaper | Drive Cloud FinOps at scale with Google Cloud Tagging
  Tags and labels can be useful and flexible tools to help your organization segment cloud spend and allocate costs. This whitepaper introduces Google Cloud Tags and best practices for implementing them. It differentiates tags, which offer reliable reporting and governance features, from labels, which can be prone to problems, including poor coverage and a lack of integrity in data labeling. 
• Whitepaper | Unlocking the value of Cloud FinOps with a new operating model
  This white paper unpacks the details of the FinOps operating model, including roles, organizational alignment, and driving culture change. It details how to establish strong financial governance and a cost-conscious culture. 
• Whitepaper | Cloud FinOps: Shared services cost allocation
  In this whitepaper, you’ll explore the elements of cost allocation as well as the complexities and challenges associated with shared-services cost allocation. While some of these concepts and models are interchangeable between legacy and cloud environments, this whitepaper focuses primarily on cloud computing and associated services.

Walk phase

Improve business-value realization. 

• Blog | 5 key metrics to measure Cloud FinOps impact in your organization in 2022 and beyond
  To drive business growth and topline revenue, business leaders must be able to connect cloud investments to business outcomes. As such, traditional IT metrics and KPIs must continue to evolve. In this blogpost, we’ll explore five key business-value metrics aligned to the five Cloud FinOps building blocks. 
• Whitepaper | Maximize business value with Cloud FinOps
  The cloud introduces new complexity and challenges to traditional IT financial management. As such, it requires strategic financial governance, processes, and partnership across the organization. This whitepaper explains how Cloud FinOps helps enterprises that have invested in cloud to drive financial accountability and accelerate business value.

Run phase 

Improve strategic cloud innovation. 

• Whitepaper | Unit costing: The next frontier in cloud
  In this whitepaper, you’ll explore the nature of and need for cloud unit costing, the standard by which FinOps practitioners obtain full business context for their cloud costs. It features examples from cloud-first organizations that have pioneered FinOps practices. Additionally, it examines several cloud forecasting and budgeting methods, ranging from least to most rigorous. 
• Blog | You get what you pay for: Principles for designing a chargeback process
  Chargeback, a crucial Cloud FinOps capability, is the process of mapping cloud consumption to internal users within an organization. It provides transparency, facilitates accountability,  enables recovery of cloud costs, and fosters a culture of fiscal responsibility. This blogpost will walk you through some best practices in designing an effective chargeback process in Google Cloud. 

Success with Cloud FinOps

As global markets continue to face challenges, there’s never been a better time to increase the return on your cloud investments. Adopting and implementing FinOps practices will help. For some real-world examples of how organizations across a range of FinOps maturity levels have collectively saved millions of dollars on their overall cloud spend, check out these customers’ stories. 

• Video | Next 2022: Top 10 ways to lower your costs on Google Cloud with General Mills
  In this video, which highlights ten leading cloud cost optimization practices, hear how General Mills, which is on pace to increase their cloud footprint by 60%, has approached the discipline of cost savings and accelerated their adoption of Cloud FinOps to drive waste out of their cloud usage. 
• Video | How Nuro optimized their costs on Google Cloud
  In this video, you’ll get an overview of the Google Cloud FinOps framework, a deep dive on cost-optimization best practices, and hear about how startup Nuro AI has adopted their own cost-savings discipline and Cloud FinOps practice. 
• Video | How OpenX reduce per unit costs by 60%
  In this video, you’ll learn how to establish a cost center of excellence within your cloud practice, explore several cost-optimization recommendations, and hear from OpenX about how they reduced their costs on Google Cloud. 
• Case Study | How Sky saved millions with Google Cloud
  In this case study, read how a few years into their cloud adoption journey, media and entertainment company, Sky Group discovered over $1.5 million in savings and optimized costs with BigQuery, Compute Engine, and Cloud Storage. 
• Case Study | Etsy: Doing more with less cost and infrastructure
  In this case study, read how after migrating their data center and ecommerce platform to the cloud, Etsy realized more than 50% savings in compute energy and leveraged committed use discounts (CUDs) to reduce their compute costs by 42%. 

It’s important to remember that FinOps success looks different for different organizations. It’s neither a one-time fix nor a destination reached by way of a single path. But for every organization, success requires small actions, refinement, and continuous improvement. As you leverage Google Cloud FinOps resources and tools, your organization can:

• Drive financial accountability and visibility.
• Optimize cloud usage and cost efficiency.
• Enable cross organizational trust and collaboration.
• Prevent cloud-spend sprawl.
• Break down departmental silos.
• Accelerate innovation. 

Getting started with Cloud FinOps

At Google, we have a team of experts in leading FinOps practices dedicated to helping you create an actionable plan to optimize cloud spend and drive cost efficiency. We’ve created numerous resources to help you get started from any stage in the FinOps journey. 

Whitepaper | Maximize Business Value with Cloud FinOps
This whitepaper outlines steps to help your organization implement FinOps. It details required teams and processes as well as the optimal behaviors, approaches, and outcomes to help maximize your investment on Google Cloud. 

With Google Cloud FinOps, your organization can also accelerate business value in the cloud. To find out more, join us on the Google Cloud Twitter channel twice a month for open Twitter Spaces discussions or reach out to your Google Cloud Sales Representative for a 1:1 discussion.

Do you want to fire up a bunch of techies? Talk about multicloud! There is no shortage of opinions. I figured we should tackle this hot topic head-on, so I recently talked to four smart folks—Corey Quinn of Duckbill Group, Armon Dadgar of Hashicorp, Tammy Bryant Butow of Gremlin, and James Watters of VMware—about what multicloud is all about, key considerations, and why you should (or shouldn’t!) do it.

Five important insights came out of these discussions. If you’re on a multicloud journey or considering one, keep reading.

Do: Choose to do multicloud for the right reasons

Don’t do multicloud because Gartner says so, implores Corey Quinn. Before embarking on a multicloud, define a “why” focused on business value journey, says Armon Dadger. For example, you might want to use services from each public cloud because of their differentiated services, according to Tammy Bryant Butow. Armon also calls out regulatory reasons, existing business relationships, and accommodating mergers and acquisitions. On the topic of M&A, Corey points out that if you acquire a company that uses another cloud, it’s usually expensive and difficult to consolidate. It can be smarter to stay put.

https://youtube.com/watch?v=xFSDexQhCUY%3Fenablejsapi%3D1%26

Don’t: Over-engineer for workload or data portability

Thinking that you’ll build a system that moves seamlessly among the various cloud providers? Hold up, says our group of experts. Armon points out that aspects of your toolchain or architecture may be multicloud—think of some of your workflows or global network routing—but that shifting workloads or data is far from simple. Corey says that trying to engineer for “write once, run anywhere” can slow you down, and ignores the inherent uniqueness that’s part of each platform. Specifically, Corey calls out the per-cloud stickiness of identity management, security features, and even network functionality. And data gravity is still a thing, says James, that causes some to dismiss multicloud outright.

If you’re using multiple public clouds, you take advantage of the distinct value each offers, Armon says. Use native cloud services where possible so that you see the benefits from useful innovations, built-in resilience, and baked-in best practices. The value from that cloud-infused workload may outweigh the benefits of seamless portability.

https://youtube.com/watch?v=B1VH56_L8f8%3Fenablejsapi%3D1%26

Do: Recognize different stakeholder interests and needs

James smartly points out that many multicloud debates happen because people are arguing from different perspectives. Context matters. If you’re an infrastructure engineer who invests heavily in a given cloud’s identity and access management model, multicloud looks tricky. Or if you’re a data engineer with petabytes of data homed in a particular cloud, multicloud may look unrealistic. James highlights that many developers default to multicloud because their local tools—where all the work happens—are multicloud. A developer’s IDE and preferred code framework(s) aren’t tied to any given cloud. Be aware that groups within your organization will come at multicloud from distinct directions. And this may impact your approach!

https://youtube.com/watch?v=I9sqXDqkKBM%3Fenablejsapi%3D1%26

Don’t: Go it alone

Corey talks about the importance of asking others what worked, and what didn’t. Tammy offers her best practices around sharing results from experiments. It’s about sharing knowledge and tapping into it for community benefit. Others have probably tried what you’re trying, and can help you avoid common pitfalls. If you’ve just made an architectural choice that didn’t work out, share it, and help others avoid the pain. 

Read research from analysts, go to conferences or watch videos to observe case studies, and join online communities that offer a safe place to share mistakes and learn from others.

https://youtube.com/watch?v=mrSb5vqOfuI%3Fenablejsapi%3D1%26

Do: Experiment first using techniques like multi-region deployments

If you think you can operate systems across clouds, how about you first try doing it across regions in a specific cloud, suggests Corey. Getting a system to properly work across cloud regions isn’t trivial, he says, and that experience can help you uncover where you have architectural or operational constraints that will be even worse across cloud providers.

This is great guidance if your multicloud aspirations involve using multiple clouds to power one application—versus the more standard definition of multicloud where you use different clouds for different applications—but can also surface issues in your support process or toolchain that fail when faced with distributed systems. Start with muti-region deployments and chaos engineering experiments before aggressively jumping into multicloud architectures.

The Google Cloud take

Do the things above. It’s great advice. I’ll add three more things that we’ve learned from our customers.

1. Don’t fear multicloud. You’re already doing it. You don’t single-source everything. As Corey mentioned, you probably already have one cloud for productivity tools, another for source code, another for cloud infrastructure. You’ll use software and application services from a mix of providers for a single app. You have that experience in your team and have been doing that for decades. What people do rightly worry about is using more than one infrastructure service beneath an application, as that can introduce latency, security, and logistical hurdles. Make sure you know which model your team is considering.
2. Embrace the right foundational components, including Kubernetes. Will everything run on Kubernetes? Of course not. Don’t try to do that. But it also represents the closest thing we have to a multicloud API. Companies are using Kubernetes to stripe a consistent experience across clouds. And this isn’t just to orchestrate containers, but also to manage infrastructure and cloud-native services. Also, consider where you need other fundamental consistency across clouds, including areas like provisioning and identity federation.
3. Use Google Cloud as your anchor. Here’s a fundamental question you have to decide for yourself: Are you going to bring your on-premises technology and practices to the cloud, or bring cloud technology and practices on-prem? We sincerely believe in the latter. Anchor to where you’re trying to get to. We offer Anthos as a way to build and run distributed Kubernetes fleets in Google Cloud and across clouds. By using a cloud-based backplane instead of an on-prem one, you’re offloading toil, leveraging managed services for scale and security, and introducing modern practices to the rest of your team.

We learned a lot about multicloud through these discussions, and it seems like others did too. That’s why we’re going to do a second round of interviews with a new crop of experts so that we can keep digging deeper into this topic. Stay tuned!

About Tencent Africa

Tencent Africa is dedicated to making every day easier for customers and brands. Opening its doors in 2013 as WeChat Africa, the company is responsible for WeChat operations on the continent.

Industries: Technology

Location: South Africa

About Siatik Systems

Founded in 2008, South Africa-based Siatik Systems is a leading Google Cloud Platform solutions provider with a focus on cloud integration services, information technology consulting services, and bespoke software engineering solutions.

Industries:

Location:

As one of Africa’s leading technology companies, Tencent Africa is responsible for WeChat operations on the continent. WeChat Africa has successfully launched a number of features including the WeChat Wallet, a mobile payment service for smartphones, which enables seamless and secure transactions for friends to send money to one another, cash money out at Standard Bank ATMs, use at accredited retailers, and make purchases from any SnapScan merchant in South Africa. Under the new name, Tencent Africa recently launched two new mobile products, JOOX, a mobile music streaming application, and VOOV, a social live streaming application.

When China’s Tencent brought its hugely popular instant messaging service WeChat to South Africa, it faced a near saturated market. To gain traction, Tencent Africa had to showcase WeChat’s versatility as a platform that goes far beyond just instant messaging. Engaging with local financial partners helped WeChat launch a WeChat Wallet to facilitate electronic payments, while providing exclusive content from South African cultural figures helped bring the platform extra publicity.

As WeChat started to grow its customer base, its on-premises infrastructure was stretched beyond its limits and the company looked for a cloud-based solution. After evaluating all its options, Tencent Africa found Google Cloud Platform best suited its needs.

“We’re a growing business and constantly upgrading our infrastructure. Getting new servers was becoming quite expensive so we wanted a cloud-based solution to reduce costs,” says Christoff Albertyn, Head of Technology at Tencent Africa. “When we did some latency testing, Google came out on top, so it made sense to go with them. Everybody loves Google, it’s a great brand. Just knowing a company like Google is behind it gives you peace of mind.”

Building a platform to scale

Instant messaging services need a stable infrastructure, the ability to scale at speed, and lightning fast performance. When Tencent Africa built an Official Accounts API to run a number of services on WeChat, to help companies engage with users on the platform, latency was its main concern. The Official Accounts services had to deliver replies over WeChat in under five seconds or the connection would drop.

Between the API on-premises servers in South Africa and WeChat’s main servers in China, Tencent Africa’s services regularly hit the limits of the permissible response time. In addition, by 2015, WeChat was starting to garner more customers across South Africa and Tencent Africa had to provision more servers. The on-premises servers were simply being asked to do too much, and expansion was proving expensive, so the company looked for a cloud-based solution.

Before committing to anything, Tencent Services did a thorough latency test of several cloud-based solutions. Google Cloud Platform came top. Tencent also engaged the help of Siatik, a Google Partner, to gauge what solutions best fit the company’s needs and help implement them. Siatik customers span both the public and private sectors and its consultants are regularly engaged in the health care, education, financial and technology industries. In order to provide leading technology solutions, it partners with industry leaders, such as Google, to provide best-of-breed infrastructure and cloud platform solutions to its customers.

“Siatik was a great partner to work with,” says Christoff. “Any questions I had, I could just pick up the phone and whatever it was they’d help me out. They were also able to get some of the team from Google to come to our offices and see how we worked, which was really good.”

With a simple, clean interface in Google Compute Engine, the company was able to spin up virtual instances very quickly and begin migrating its stack to Google. When it became more comfortable with Google Cloud Platform features, Tencent used Google Cloud SQL and Google BigQuery to manage its data streams, and Google Cloud Storage to store them safely.

From day one, it was very smooth. The interface was amazing—Google must have spent a long time perfecting it because it was so easy to use says Christoff. “I set up the first virtual machine in no time without any struggles.”

In addition to powerful hardware from Google Compute Engine, the fast, global network from Google helped to speed up performance. With the infrastructure ported over to Google, Tencent also brought in G Suite as an office productivity solution, which eased the pressure on its servers even more. Throughout the process, Siatik were on hand to advise and provide technical guidance whenever any issues came up.

What I really like is how quickly you can spin servers up. There’s no messing about and the interface is really easy to use, says Christoff. “You can have a virtual machine running in just a few minutes. It’s very impressive.”

Cutting costs, raising expectations

Google Cloud Platform helped Tencent Africa to slash its latency. Before the migration, pings to the Chinese servers and back would regularly take 180 milliseconds. Afterwards, this fell to around 35 milliseconds, helping to ensure smooth service to Tencent’s South African customers. Google offers innovative pricing, such as per-minute billing and sustained use discounts, which helped significantly cut server costs compared to an equivalent on-premises solution.

As its customer base grew, and Tencent Africa began to release new products, the ease of use of Google Compute Engine meant that spinning up new servers took minutes instead of hours and allowed the company to scale up and down at speed. Exploring products such as Kubernetes for rapid deployment or TensorFlow for machine learning, Tencent Africa continues to evolve and experiment with new products to keep WeChat a growing success in South Africa.

“Initially, we just used per-minute billing, but when I saw how much work we were doing with Google BigQuery and Google Cloud SQL, we started to generate sustained-use discounts, which helped save us a lot of money,” says Christoff. “The other great thing is, Google Cloud Platform monitors how you’re using it and tells you what else you can do to reduce costs.”