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6 FinOps Trends and Predictions for 2023

Post author By Gen Sanders
Post date February 20, 2023

6 FinOps Trends and Predictions for 2023

Ghassan Zalaf

NCS NEXT FinOps Lead

February 20, 2023

6 FinOps Trends and Predictions for 2023

The words ‘cloud cost optimisation’ may be enough to make any CFO and CIO’s heart skip a beat in a world where every organisation is using cloud, or in most cases, multiple clouds. Cloud promises to be more agile, accelerate scalability, improve productivity and achieve business goals, however, in reality it also presents many challenges, one of the most prominent of which is financial management and governance. To avoid experiencing bill shock and maximise your investment in cloud, it’s important to understand new trends in cloud consumption.

This blog presents our top 6 trends and predictions for FinOps in 2023 and explains why this framework is a must-have for enterprises that want to avoid unnecessary cloud sprawl.

1. FinOps to top cloud initiatives list again, for the 7th year running

The cloud has become a vital tool in many industries as companies continue to pursue digital transformation in an effort to improve reliability, modernise environments and support new work models.

Short for financial operations, FinOps is an operating framework designed to accelerate business value and drive financial accountability by increasing organisation’s ability to understand cloud costs and make smarter, result-based decisions. Far from being a buzzword, the fundamental premise behind FinOps is to help enterprises make the most optimal investment decision by bringing technology, finance and business together and embrace more economically efficient cloud models.

As economic uncertainty continues to build and organisational cloud wastage exceeds 30%, cloud cost optimisation will present a quick win scenario to organisations who are looking to reduce costs, fund other critical initiatives such as security, and increase profitability.

2. Increased outsourcing of FinOps

Although FinOps is now practiced in every major industry and continues to proliferate across the world, there are still some challenges to overcome in the collective journey. One of them is scarcity of FinOps practitioners in most regions including Asia Pacific. According to the State of FinOps Report 2022, approximately 45% of FinOps practitioners reported earnings above $140,000. While this suggests that FinOps is a well-paid field, there are still challenges that organisations must deal with. For example, training someone internally incurs a cost and smaller organisations may find it difficult to justify hiring a dedicated FinOps practitioner. On the other hand, the role may only require several hours per week, so the business may not require a full-time position.

Alternatively, larger organisations can also find it difficult to hire multiple sources who can handle the complexity of the business model. Therefore, outsourcing the practice not only accelerates your FinOps journey as service providers have prior expertise and experience, but can also introduce high-quality talent at a lesser cost of hiring someone on a full-time basis.

3. Optimisation moving earlier in migration projects

Cloud migration strategies entail planning of how organisations can move their applications and data to cloud. However, migrations are delayed more often than not due to resourcing limitations, architectural challenges or the inability of legacy applications to operate on cloud-based infrastructure.

Current industry-standard migration models and strategies include optimisation after workloads have been migrated, testing has been completed and production workloads are live. However, we recommend introducing governance and optimisation frameworks earlier in the process to help improve cost, performance and reduce waste, allowing your organisation to realise cost savings sooner.

4. Increased cloud cost accountability

Cloud wastage is becoming a critical issue for many organisations as cloud costs continue to rise. Organisations self-estimate as much as 32% of cloud consumption is wasted, with real wastage amounts likely to be higher. This can be attributed to a lack of accountability associated with cloud spend across different levels within an organisation, particularly in technical teams.

One of the main benefits of FinOps is that it helps create a common language by breaking down functional barriers between teams from executive level to middle management. In turn, we predict cost optimisation will become a more widely used KPI in performance bonuses as a consequence of increasing accountability and consciousness of cloud spend.

5. Technical upskilling of FinOps practitioners

Although one of the goals of FinOps is to bring together different teams within an organisation, one of the main challenges is to obtain FinOps buy-in from technical team members. For instance, understanding cost and utilization from a technical point of view helps organisations make sound decisions. This makes it difficult to identify modernisation and architectural change opportunities. Our prediction is that in 2023 there will be opportunities for FinOps practitioners to upskill technically to be able to better communicate with technical team members and provide more actionable and insightful recommendations to operational teams.

6. Sustainability linked to FinOps more widely

Organisations across industries are rapidly adopting the cloud to accelerate time to market, deliver new functionality and improve user experience. However, many are still concerned about the environmental impact of their use of the cloud. As new sustainability requirements are being introduced, cloud service providers are responding by increasing their carbon-neutral corporate goals to support these ‘green’ initiatives. The largest cloud service providers have committed to cut their carbon emissions through initiatives such as ‘re-100’ which aim to achieve 100% renewable energy by publicising their annual progress reports.

By utilising a FinOps framework, you’re able to reduce cloud by utilising industry best practices, increase cost avoidance and ultimately reducing your cloud footprint, which in turn reduces your carbon footprint. You could also reinvest savings from your FinOps activities towards other sustainable initiatives such as working towards a net zero emissions goal for your organisation.

Recap – Why FinOps?

FinOps entails six core principles that are designed to assist enterprises manage their cloud spend. These include:

Team collaboration
Everyone takes ownership of cloud usage
A centralised team drives FinOps
Accessible data and timely cost and usage reporting
Business value of cloud drives decisions
Taking advantage of the variance cost model of cloud

Does your organisation need FinOps?

Many organisations are not aware of the potential optimisation opportunity in their cloud environments. FinOps helps to identify these opportunities quickly, improve visibility into your cloud consumption and prevent unexpected increases in cost or usage using anomaly detection and increased visibility of consumption.

If you wish to know more about how your organisation can benefit from FinOps or would like to discuss further, feel free to contact our FinOps Lead, Ghassan Zalaf, at finops@arq.group

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Tags * FinOps, cloud

Case Studies Data Machine Learning

Victoria Department of Health Report Automation

Report Automation provides certainty in uncertain times

Background

Victoria was greatly affected by COVID lockdowns and restrictions due to an outbreak of cases however the Government was receiving delayed information on case numbers which resulted in the inability to make real time decisions and keep the public up to date with an accurate status of COVID in Victoria.

Delayed reporting and low awareness of risk were two key challenges that Department of Health engaged ARQ to help solve.

The Challenge

Delayed reporting and low awareness of risk were two key challenges that Department of Health engaged ARQ to help solve.

Summary of the challenge focus areas;

Report automation

ARQ understood the need to automate the reporting, reducing time, cost, and the possibility of errors. This automation is particularly important in delivering fast and reliable reports in critical situations, such as the COVID-19 pandemic.

Transmission Risk Analysis

ARQ incorporated the use of mathematical models to evaluate the transmission risk of COVID-19 across Victorian suburbs, an important tool in assisting authorities to make informed decisions. The department has developed an agent-based risk analysis model, which predicts a risk score for each postcode and LGA in Victoria for the upcoming week. However, due to the complexity of the COVID-19 transmission process, obtaining good performance from this model is challenging, which requires more sophisticated techniques, such as machine learning that ARQ was able to assist with.

Solution

Report automation

Most of the reporting tasks in the department were developed in the R programming language. ARQ employed advanced data tables and automatic data extraction and manipulation techniques in R to enhance the performance of the existing platforms and to eliminate several manual reporting tasks. Report automation was successfully implemented for the following reports:

Daily vaccination report, including the rate of first and second doses for different vaccine brands, age groups, postcodes, and local government areas (LGA)
Weekly vaccination report for culturally and linguistically diverse (CALD) communities considering the country of birth and preferred language
Vaccine effectiveness report which highlights possible correlations between vaccination rate and cases growth in LGAs of concern, i.e., LGAs with the largest number of accumulated cases

Transmission Risk Analysis

The agent-based transmission risk model involves dozens of parameters adjusting the effect of demographics, workplace, and community movement of each agent. ARQ proposed a machine learning-based validation schema for fine-tuning these parameters. This schema was designed to maximize the historical accuracy of the model while avoiding model overfitting. ARQ also provided an output analysis of the model to highlight postcodes where the actual and estimated number of cases show a noticeable difference. This analysis allows identifying important parameters for further fine-tuning and introducing new parameters to mitigate the deviation.

Results:

Apart from eliminating several manual reporting tasks, the data manipulation techniques implemented by ARQ have successfully reduced the reporting time, in some cases, by up to a quarter. This enhancement allows the department to generate reports faster with less labour involvement. The machine learning-based validation schema and the output analysis also resulted in an increase of over 10% in the accuracy of the transmission risk model, helping authorities to make more informed decisions in containing the spread of COVID-19 across Victoria and ultimately ensuring that the people of Victoria were well informed of the state of the pandemic in their area and decisions around safety were able to be made confidently.

About Victoria Department of Health

The Department of Health develops and delivers policies and programs and advises the Australian Government on health, aged care and sport. They work with a wide range of stakeholders to ensure better health for all Australians.

The Department of Health plays a critical role in the Victorian health system and is responsible for shaping it to meet the health needs of Victorians into the future. The department also leads the Victorian Government’s response to the coronavirus (COVID-19) pandemic. Directions issued by the department have helped contain the spread of COVID-19 and keep Victorian safe. These efforts have led Victoria to be one of the most vaccinated and safest places in the world during the pandemic.

About ARQ

ARQ Group is a multi-award-winning digital tech services company with a client base spanning Government and enterprise organisations, with more than half of Australia’s top 20 ASX-listed companies. Local experts, with a 26-year heritage of technological innovation – and part of Singtel’s tech services and innovation subsidiary NCS – ARQ also delivers advisory, design and managed services of digital solutions, with many of these solutions used by Australians everyday.

Cloud Managed Services

Managed Services

MISSION: CRITICAL

Managed Services, Like Life Depends On It

Managing mission critical workloads powering real time bushfire alerts, life support systems and explosive ordnance requires a zero margin of error. Service standard failures simply won’t cut it. Network downtime jeopardises mission critical business functions.

Trust your business to the only name trusted in Australia’s first line of digital defence during the bushfire devastation of 2019/20. Meticulously managing a network of 20 million concurrent connections around the clock, non-stop – because life depended on it.

Industry Recognised

MISSION: AGILE

From Business As Usual To Sudden Surge

Managing a sudden surge in traffic happens seamlessly, and in an instant. It’s not an anomaly, it’s the everyday. Growth at scale is limitless because managed solutions as code gives you the agility to build and manage platforms at speed, controlling your entire managed services solution from infrastructure to your customer experience.

Talk to Steve, our Chief Customer Architect

(Click to schedule your no obligation call)

Continuous Value Delivery

Value as an Evolutionary Journey, not Final Destination

Imagine your managed service partner delivering continuous value beyond customary service level agreements. While traditional value peaks upon the delivery of a project, ARQ’s Continuous Value Delivery (CVD) model offers end- to-end digital solutions driving sustainable change at pace with improved customer experience.

What You Get

How It's Managed

What You Get

How It's Managed

Talk to our Chief Customer Architect

Case Study: Helping Landmark
get the lay of the land

Triage At The Speed Of Now

Because Minutes Is No Longer Fast Enough

Imagine your managed services partner with a Priority Services Team backed by a secret weapon in machine learning and artificial intelligence (code name: “CoPi”). Built ground-up by in-house data scientists, CoPi is a deep learning NLP model triaging messages into priority queue for human eyes in seconds – faster than ever possible. Managed services at ARQ gives you an edge in accuracy at speed with an AI-assisted 24/7 eye on your software and hardware systems.

Work On Your Business, Not In It.

Be a Product Manager

“I love being a Technology Manager”
(said no Product Manager ever)

Managed services means liberating your time so you can focus on moving the needle in your business, not the technology running it.

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Change is Your Only Constant

Stay Ahead of the Curve in Cloud, Digital and Data

Technology is constantly changing. Tomorrow brings the next big thing: faster, cheaper, smarter and more secure. To remain ahead of the curve (and your competition), you’ll need a partner constantly abreast of the latest technologies across the entire gamut: cloud, digital and data – with a wheelhouse in artificial intelligence and machine learning.

Full Stack Means
Full Stack

Have it all with ARQ’s full stack centric methodology spanning core capabilities across everything you need in technology: cloud, mobile, and data and analytics. The multi award winning team with 25 years experience means your business capabilities expand into infrastructure, web, data management, visualisation, machine learning and artificial intelligence, customer experience and mobile.

Cloud

Cloud Migration Infographic

Cloud Adoption in Australia 2020

42% of Australian organisations are now in the cloud. More than half (57%) migrated in the last 3 years. The pace of great (cloud) migrations is building momentum and the race to Australia’s cloud is underway.

Explore the current stay of play in Australia’s cloud adoption, mapped-out for you in an easy to read infographic featuring the latest local and global industry insights (August 2020).

If you’re the other 58% of Australian organisations yet in the cloud, are considering your digital transformation, modernisation to cloud native, or simply retiring your technical debt from on-premise to cloud, read our AWS Cloud Migrations made easy.

Cloud Optimisation

10 Quick Tips for AWS Cloud Cost Optimisation

Post author By Mark Addy
Post date August 25, 2020

10 Quick Tips for AWS Cloud Cost Optimisation

Mark Addy

August 25, 2020
11:46 pm

10 Quick Tips for AWS Cloud Cost Optimisation

Getting to the cloud is the first step on the journey of a thousand miles to your digital transformation. But once you’re in the cloud – what’s next?

Leveraging your ability-to-scalefinity, uplifting your agility and locking down your SecOps is critical – all paying handsome dividends to your cost savings (caveat: if done right).

If you’re serious about slashing your cloud bills, read our 10 quick tips for AWS cloud cost optimisations and make a positive impact on your next cloud bill.

1) Choose a Cloudtelligent Partner

Choosing a partner with a high-cloudtelligence in AWS cloud optimisations helps save you multiples beyond your optimisation fees.

How so? Anyone can (and most cloud partners do) realise immediate savings by shutting down instances overnight and weekends, archiving old data to cheap storage and scaling-down when idle. But the serious-savings are banked by modernising your architecture and highly-automating your CI/CD deployment to deliver code to production faster and safer (amongst a plethora of other must-do advanced optimisations). Now you’re potentially slashing up to 75% off your cloud billing! The higher your partner’s cloudtelligence, the higher your cloud savings potential.

2) Turn Off The Lights When You Leave The Room

Not using resources this instant? Shut it down. It’s like turning off the lights when you leave the room. Sure, it’s convenient to keep the lights on, but it all adds up. Turn off what you’re not using and it’ll save your unused instances accumulating on your next cloud bill.

3) A Perfect Fit: Exact-Size Storage

Like your favourite comfy shoes or a well-tailored suit/dress – it fits perfectly and feels right. Incorrect sizing is uncomfortable, and this holds true in cloudonomics (visible at the end of your billing cycle). With cloud costs totally thousands-to-millions of dollars over time, it certainly pays to have your storage class tailored to fit your needs and budget. Amazon’s S3 object storage comes in five different tiers, so it’s wise to tailor according to the amount of data (and type) that you need to manage.

4) Always Be Right: Right Type Instance

It’s nice to always be right, and nothing pays higher dividends than being right when choosing your instance families to suit your application workloads. Knowing the exact memory requirements to run your services means you can minimise your cloud spend so you only pay for what you use, when you use it. That’s cloud-smarts. Choosing a cloudtelligent partner can help unlock these savings for you.

5) Trust Your Advisor (AWS Feature)

AWS offer a feature called: “Trusted Advisor”. It scans all your resources and services, checking for optimisations to unlock hidden savings. Trust your AWS advisor feature and implement the recommendations to trim the cloud-fat and reduce your cloud-spend.

6) Auto Scale App Architecture

Auto scaling your application architecture empowers you to respond instantaneously to fluctuations by adding new resources or turning off instances. This translates into optimised cloud cost controls and helps detect unhealthy instances on time.

7) Avail Spot Pricing Discounts

Did you know unused EC2 instances are available for less than the standard rack-rate On-Demand price? Set a price ceiling for your EC2 instances to control your costs and avail the price savings. Because Spot Instances enable you to request unused EC2 instances at steep discounts, you can lower your Amazon EC2 costs significantly.

8) Service Usage: Monitor, Track & Analyse

Powerful tools like Amazon’s Cloudwatch monitor your log files and track changes in your resources. Doing so achieves resource optimisation and identifies potential ‘dead wood’ in your workloads (that might be costing you).

9) Use AWS Cost Management

A fantastic tool offered by AWS allows you to organise and report your cost and usage based on user-defined methods. It helps you manage billing and control your costs, improves your planning with flexible forecasting and budgeting, and optimises costs with resource and pricing recommendations.

10) Become a Reserved Instance Trader

Did you know you can negotiate a reserved instance on a 1-3 year term for a specific capacity and hourly rate? This strategy offers significant savings compared to the regular On-Demand pricing. If your demand varies, you simply reduce the duration of your reserved instance or sell it.

Some Partnership Are Worth Millions

Not all clouds are the same, and not all cloud optimisation partners are created equal. It’s the elephant in the room: the calibre of your cloud optimisation partner is directly correlated to your cloud capabilities and potential savings. Insist on the highest level of cloudtelligence money can buy when choosing your cloud optimisation partner because the difference could mean hundreds of thousands (if not millions) to your cloud-savings.

Is there money hidden in your cloud? Book your free 15 minute no obligation cloud consultation with a Cloud ARQitect and discover how much you can potentially save. There’s no selling, it’s just tech-talk with a cloud optimisation expert.

Head over to our AWS Cloud Optimisation page to learn more about ARQ’s unique Cloud Optimisation ARQitecture.