FinOps is a set of practices that aim to align cloud-based organisations’ financial goals and operational efficiency. FinOps helps you monitor, analyze, and optimize your cloud spending while ensuring you get the best performance and value from your cloud resources.
This blog post will explore how you can apply FinOps principles and best practices to your Oracle Cloud Infrastructure (OCI) environment. We will cover the following topics:
- What is FinOps, and why is it important for cloud users?
- What are the key concepts and tools for FinOps in OCI?
- Implementing FinOps in OCI using a three-phase approach: Inform, Optimize, and Operate.
- How to measure and improve your FinOps maturity and outcomes.
What is FinOps, and why is it important for cloud users?
FinOps is a term coined by the FinOps Foundation, a non-profit organization that promotes adopting cloud financial management practices. According to the foundation, FinOps is “the operating model for the cloud” that enables “a shift — a combination of systems, best practices and culture — to increase an organization’s ability to understand cloud costs and make tradeoffs.”
FinOps is essential for cloud users because it helps them to:
- Gain visibility and accountability of their cloud costs across different teams, projects, and services.
- Optimize their cloud spending by eliminating waste, improving efficiency, and leveraging discounts and incentives.
- Align their cloud strategy with their business objectives and value delivery.
- Empower their teams to make informed decisions about their cloud usage and budget.
- Foster a culture of collaboration and innovation among finance, engineering, and business stakeholders.
What are the key concepts and tools for FinOps in OCI?
To implement FinOps in OCI, you must understand some key concepts and tools to help you manage your cloud costs effectively. These include:
- Organization: This is how you structure your OCI resources into logical groups that reflect your business or operational needs. You can use tenancies, compartments, tags, and policies to organize your resources and control their access and usage.
- Cost Analysis: This tool allows you to visualize and analyze your OCI consumption data in various dimensions, such as service, region, compartment, tag, time range, etc. You can use Cost Analysis to track your spending trends, identify anomalies, compare budgets, and generate reports.
- Cost and Usage Reports: These detailed reports provide granular information about your OCI usage and charges. You can use Cost and Usage Reports to audit your billing data, reconcile your invoices, and integrate with third-party tools.
- Detailed Billing Analysis: This solution leverages OCI Cost Governance and Performance Insights service to provide advanced analytics and insights on your OCI costs. You can use Detailed Billing Analysis to create custom dashboards, alerts, recommendations, and forecasts based on your cost data.
- Forecasting: This feature lets you predict future OCI costs based on your historical usage patterns. You can use Forecasting in Cost Analysis to plan your budget, optimize your resources, and avoid surprises.
- Tagging: This is a way of adding metadata to your OCI resources to categorize them by attributes such as cost centre, project name, environment type, etc. You can use Tags to filter, group, report, and allocate your costs across different dimensions.
- Alerts and Notifications: These mechanisms allow you to monitor your OCI costs and receive notifications when certain thresholds or conditions are met. You can use Budget Alerts.
- Oracle Support Rewards: This program provides additional value to Oracle’s on-premises software customers who consume Oracle Cloud Infrastructure (OCI) services. By using OCI services, customers can earn rewards that can be used to pay for their software update license and support for Oracle technology programs.
- Automation: Autoscaling allows dynamically adjusting resources to match demand. It ensures that organizations only pay for the resources they need when they need them. This approach minimises underutilised resources and prevents service disruptions during periods of high demand, ultimately resulting in significant cost savings. Autoscaling can be applied to Oracle Exadata Cloud Service (custom autoscaler from Oracle), Autonomous databases, Container Engine for Kubernetes (scaling tools: CA, HPA, VPA), and Compute instances (instance pools).
