2 KPIs for Tracking Your Company's Cloud Spending

KPIs are the core element to represent business value. And that's one of the core drivers of getting FinOps in your Company. Learn a couple you can implement today.

Author

Victor Garcia
July 21, 2024

What happened this week:

  • KPIs for Optimizing Cloud Spending

  • GCP increased service availability for CUDs

  • Mention of Honour about a possible evolution of Unit Economics.

  • Job Offers

  • Professional Spotlight with one of the experts I love to talk with

It’s been a heavy week, so a lot of value is coming. Brace yourself:

KPIs
Two KPIs for Optimizing Cloud Spending

Managing cloud spending is challenging for organizations. Tracking precise KPIs is crucial. It prevents wasted efforts and frustration.

To try and track it on the organizational level, we can add these key KPIs: Pre-Discount Spending and Total Discount.

  • Pre-Discount Spending: This measures usage based on list prices. It doesn’t include discounts or special rates.

  • Total Discount: This measures the savings from discounts and special deals. It shows how well the organization is utilizing vendor discounts.

Benefits

  • Engineering: Engineers can make cost-effective decisions. This avoids relying on temporary discounts.

  • Financial: Finance teams can focus on vendor negotiations. They optimize long-term savings.

  • Separation of Concerns: Different teams should use separate dashboards for clarity. This helps avoid confusion in decision-making.

Check the complete article by Nader to have a detailed in-depth explanation:

Cost Optimization
Saved $5K Monthly with a Single Grafana Query

Learn how Checkly saved $5,000 every month with one smart tweak!

Problem

  • Pods took too long to start.

  • High startup time increased costs.

Solution

  • Switched to using AWS SDK version 3.

  • Only imported necessary modules.

  • Added specific logging lines to track startup times.

  • Used Grafana Loki to analyze log data

Big Savings

  • Reduced startup time by 300ms per pod.

  • Cut down on pod numbers by 25%.

  • Saved around $5,500 monthly.

Finding efficiencies in unexpected places can lead to huge savings!

GCP
Google simplifies CUDs and covers GKE, Compute, and Cloud Run

Great news for developers and businesses using Google Cloud services! Google has made its Flexible Committed-Use Discounts (CUDs) even more adaptable with new services in place.

Unified Discounts

  • One CUD covers Compute Engine, GKE, and Cloud Run.

  • Save 46% for three-year and 28% for one-year commitments.

Expanded Coverage

  • Applies to Cloud Run on-demand, GKE Autopilot Pods, and more.

  • Not limited by specific regions.

Retirement of GKE Autopilot CUD

  • Purchase old CUDs until October 15.

  • Existing CUDs remain valid until their term ends.

This update provides greater savings and flexibility for your Google Cloud workloads!

FinOps Adoption
Learning Cloud Cost Management The Hard Way

According to HashiCorp’s latest survey, 91% of respondents reported waste in their cloud spending, despite 66% increasing their cloud budgets last year.

The main issues include lack of necessary skills, overprovisioning resources, and idle or underused resources.

To address these inefficiencies, enterprises should focus on upskilling their workforce, implementing finops principles, and leveraging automation tools.

Additionally, a robust cost governance framework is essential for effective cloud cost management.

Check the complete story, really well written by David Linthicum

Unit Economics
Throughput Accounting & Unit Economics

Unit economics and throughput accounting are key concepts in business financial management, but one might be better for overall growth.

Unit Economics

  • Focuses on costs and profits of individual units.

  • Popular for making specific financial decisions.

  • Might miss the bigger picture of overall profitability.

Pitfalls of Cost Accounting

  • Known for "local optima" thinking.

  • Optimizes parts, not the whole business.

  • It could harm long-term growth.

Throughput Accounting

  • Engages in maximizing value flow through systems.

  • Seeks and improves system constraints for better results.

  • Offers a broader view over detailed unit costs.

Why Throughput Could Be Considered

  • Accounts for customer retention and long-term value.

  • Adjusts strategies for both profitability and growth.

  • Ensures efficient use of every dollar spent.

Steer your focus towards throughput for long-term and sustainable growth.

Mention of Honour Special
Deserved for recent discoveries that are inspiring for the FinOps community.

🎖️ Mention of Honour
Kubernetes Instance Calculator Release

LearnK8s released their Kubernetes Instance Calculator! This tool offers several new features to help you optimize your Kubernetes workloads:

  • Cost Estimation: Calculate costs based on your specific requests and instance sizes.

  • Efficiency Exploration: Analyze instance overcommitment and efficiency to maximize resource usage.

  • Spending Insights: Identify over and underspending by comparing model error rates with your actual memory and CPU usage.

  • Cloud Provider Comparison: Easily compare instances across different cloud providers to find the best fit for your needs.

Check out the Kubernetes instance calculator here.

Jobs
👩‍🏭 FinOps Job offers

Both Permanent links (i.e. FinOps Job site) and Offers I’ll find across the internet.

Professional Spotlight
Erik Norman

One of the guys who welcomed me to the FinOps Sphere and Ecosystem. Always straight but warm while talking, I love the way he communicates and shares stuff.

You always get valuable lessons when you listen to him. So I recommend you attend his stuff, you’ll sure learn.

Bonus
🏆️ Quick Wins

For those seeking more content, this section will provide additional resources.

Feedback
🗳️ Poll of the Week

🌟 Rate this Newsletter Issue 🌟

Login or Subscribe to participate in polls.

That’s all for this week. See you next Sunday!

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