J.R. Storment
FinOps Foundation
Key Insight: In March, AWS delivered four updates that help FinOps Practitioners tackle their top two key priorities this year, namely reducing waste or unused resources and managing commitment discounts. The recommended approach is to address both usage and rate optimization in tandem, and the FinOps Framework Domains have been updated to reflect that approach.
At the beginning of every year, the FinOps Foundation delivers the results of their annual survey, the State of FinOps. This year’s survey found that priorities have shifted for practitioners. In March shortly after the survey results came out, Amazon Web Services (AWS) announced several new features that help FinOps Practitioners tackle their top two key priorities this year, namely reducing waste or unused resources and managing commitment discounts.
New 7-day return window for AWS Savings Plans
On March 20, 2024, AWS began offering the ability to return or repurchase Savings Plans within 7 days of purchase. The announcement was brief, but we dug into the details with Rick Ochs, Cloud Optimization Product Manager at AWS, so you can be prepared to take advantage of this capability.
In order to be eligible for return or repurchase, the Savings Plans must have an hourly commitment of $100 or less, have been purchased in the past 7 days and in the same calendar month, with up to a maximum of 10 returns per calendar year per management account. This action can be performed programmatically with an API, or via the console.
Knowing that a Savings Plan can be returned, for example if a purchase made for expected cloud usage is not aligned with the observed usage, takes the stress out of clicking the “buy” button and lowers the risk that FinOps Practitioners take when making commitments to cloud providers for Rate Optimization. A little flexibility goes a long way for Practitioners when it comes to managing commitment discounts.
FinOps Landscape
In addition to a 7-day return window for Savings Plans from AWS, these commitment discounts from Cloud Service Providers (CSPs) also offer flexibility with commitment discounts:
- AWS Reserved Instances: sell on RI marketplace, modify, or exchange Convertible RIs
- Microsoft Azure Reservations: exchange or refund Reservations, or trade Reservations for Savings Plans
- Google Cloud Committed Use Discounts: merge and split commitments
AWS, Microsoft, and Google all offer native discount management tools, and numerous Independent Software Vendors (ISVs) support multi-cloud commitment discount management:
See the FinOps Landscape for more FinOps platforms and services with support for managing commitment based discounts.
FinOps teams can use FinOps Landscape and its various filters to find solutions that meet their unique needs.
AWS Compute Optimizer supports new instance types and customizability for rightsizing recommendations
At the end of March, AWS announced two updates for AWS Compute Optimizer:
- Support for 51 additional Amazon Elastic Compute Cloud (Amazon EC2) instance types
- Customizable Amazon EC2 rightsizing recommendations based on memory utilization
Both of these improvements to AWS Compute Optimizer help FinOps teams reduce waste or unused resources, which is their top key priority for 2024. As new compute resources come out from CSPs, their native management tooling, as well as ISV tooling, must be updated to support those new resources. This enables FinOps Practitioners to recommend more efficient infrastructure and keep the environment modernized. More efficient resource usage translates to reduced waste.
The ability to customize Amazon EC2 rightsizing recommendations based on memory utilization is a critical improvement for organizations who want to be able to act on those recommendations. With memory customizability, users can set desired memory usage and trust that the recommendations meet their usage needs. Engineers can implement them with less scrutiny over each individual recommendation, easing Workload Optimization.
Rightsizing recommendations are very important for efficient cloud usage. When first developing a workload, it’s often difficult to know how much computing power it will need, so overprovisioning is common. In addition to cloud native recommendations, many third-party cloud management tools offer rightsizing recommendations. But customizability and tunability is very important to make these recommendations useful.
FinOps Landscape
In addition to AWS’s customizable rightsizing recommendations, here are a few ISVs that offer the ability to tune/adjust the capacity inputs to rightsizing recommendations.
See the FinOps Landscape for more FinOps platforms and services with support for resource utilization & efficiency.
Retroactively apply AWS Cost Allocation Tags
AWS rounded out the month with another update: the ability to tag resources retroactively for up to 12 months. As long as customers have added tags to a resource in the past, you can activate (or deactivate) cost allocation tags by submitting a backfill request.
For many, proper tagging is the foundation for performing FinOps Capabilities. This update helps teams organize their resources so they can understand their usage and cost, optimize it, and deliver business value. It underpins their ability to reduce waste and manage commitment discounts optimally. Retroactive application is especially helpful in cases where tags may not have been applied when resources were provisioned, or if business units merge, or another company is acquired and must be merged into your environment.
FinOps Landscape
In addition to AWS, these cloud service providers offer native tag management:
- Google Cloud: updating existing tags
- Microsoft Azure: edit tags
- Oracle Cloud: add, update, remove tags
Here are a few examples of FinOps tools with built-in tag managers:
Optimize usage and rates in tandem
These four updates from AWS support both usage optimization and rate optimization. Some teams are unsure if they should tackle usage or rate optimization first, but Rick recommends doing both in tandem. The community agrees with this approach, and to reflect that thinking, the FinOps Foundation recently updated its Framework Domains to unify Cloud Usage Optimization and Cloud Rate Optimization under a single Domain: Optimize Cloud Usage & Cost.
Topics
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Cloud Provider Updates
