Cloud computing has forever changed the way businesses operate, with more than three out of four companies reporting the use of one or more public or private cloud(s). This majority adoption of cloud technology demonstrates the importance of optimizing spending for maximum value. Fortunately, nClouds has more than 14 years of experience in managing this optimization for our partners by leveraging four areas when implementing our AWS-backed approach to FinOps.

1. Conquer Cloud-flation

According to a January 2024 report from the Bureau of Labor Statistics, cloud costs have increased year after year since 2022, a trend colloquially referred to as “cloud-flation.” That same year, a separate survey found that nearly half of all respondents reported they were having difficulty getting their cloud costs under control.

Because costs can quickly snowball due to cloud-flation if left unchecked, implementing FinOps to utilize AWS cloud cost management tools such as AWS Cost Explorer, AWS Budgets, and AWS Cost Anomaly Detection can identify opportunities for optimization to help you determine what systems are necessary so you can allocate budgets appropriately, consolidate billing, and more.

2. Budget Accordingly

The 2024 Wasabi Global Cloud Storage Index found that more than half of all companies reportedly exceeded their cloud budget in 2023, due in part to capacity planning and migrations.

Underutilization (also known as overprovisioning) is another common issue that often results in unnecessary spending. For example, the 2024 Kubernetes Cost Benchmark Report from CAST AI analyzed 4,000 clusters and found that just over 10 percent of provisioned CPUs and 20 percent of provisioned memory was utilized.

Because cloud budgets vary based on a number of factors—including business size, industry, and needs—our FinOps solutions use AWS Auto Scaling, which looks at current and historical data to isolate and scale resources as needed to prevent them from exceeding their current allocation. Automatically stopping resources when they are either not in use or underutilized can also mitigate overprovisioning, which improves operational efficiency and reduces unnecessary spending.

3. Improve Visibility

Widespread adoption of public cloud services has the industry on trajectory to reach a valuation of $1.1 trillion by 2028, with global spending projected to increase by more than 20 percent this year alone.

With improved visibility, FinOps solutions can establish policies and guardrails that limit resources to certain teams or departments after examining spending patterns, empowering decision-makers when it comes to usage, trends, and costs. Once potential optimization opportunities are determined, companies can then exercise better control over costs by tracking budget adherence and proactively managing expenses to avoid unnecessary overspending.

4. Share Responsibility

Did you know that 86 percent of employees believe a lack of collaboration is one of the main causes of failure in the workplace, while collaborative efforts result in better business decisions an estimated 87 percent of the time?

This shared responsibility extends beyond working together toward common business goals and into the costs associated with cloud services via FinOps in the following ways:

• Promoting a culture that helps team members understand the impact their actions have on cloud costs so they can actively participate in optimizing resource usage
• Making budgetary allocations to resources that provide business value based on data-driven insights, resulting in improving costs without sacrificing performance
• Aligning systems cross-functionally between multiple departments to break down traditional silos for improved resource utilization, efficiency, and costs

Improve Your Cloud ROI with FinOps

Implementing FinOps isn’t just about cutting costs: It’s also about maximizing the value derived from cloud investments to drive efficient growth and innovation. By implementing a structured approach like the nClouds FinOps program backed by AWS, businesses are able to navigate the complexities of cloud-flation, budgeting, visibility, and responsibility for strategic decision-making without compromising service.

Unlock the full potential of your cloud environment by scheduling a no-cost consultation with us today to start optimizing costs and driving further business success.