Ep#106 Cloud Financial Management: The 5 Things You Need to Know

Host: Jon

Please join me in welcoming Savanna Jensen, senior customer enablement specialist at AWS and also part of the AW w s Optics team to the show. Savanna, thank you so much for joining me.

Guest: Savanna

Thank you for having me, Jon. It's lovely to be here. A good way to kick off the new year,

Host: Jon

Actually. That is a very good way. This is my first official recording of the new year. I bet you didn't know that. Oh

Guest: Savanna

Dang. All right, I'm on.

Host: Jon

Yeah, so I have to get my feet back into it and get back into the groove of recording and I decided to not take it easy and line up four for this week. Why not? Perfect.

Guest: Savanna

Hit the ground running.

Host: Jon

Well, I'm going to hit the year running. We're going to get things started right now. So today we're talking about cloud financial management and whether is it a once-and-done thing. I don't know. I think there might be one answer. No, I'm just kidding. So Savanna, before we start, how about you give the audience a little backstory on yourself?

Guest: Savanna

Absolutely. So my name is Savanna Jonson right now I sit within the optics team at AWS, as you mentioned, and I am a senior customer enablement specialist which means I take care of everything that's got a dollar sign attached to it for the customer, whether that's helping them understand their billing tools, helping them understand what they can do to optimize on AWS or kind of any of the other pieces of the cloud financial management journey that all fills with or falls within my ParaView. I've been in this role for about two years. Before that, I was still at AWS, but I was actually on the concierge team in the enterprise billing support space. So still working with customers on a very similar kind of subject matter just in a different team with different customer subsets and kind of different focuses depending on the day. So been at AWS for about five years total, which

Host: Jon

Is, wait did we hit the five-year mark?

Guest: Savanna

It's not quite yet. I've got I think a couple more weeks. I'll have to look, but I did just order my orange badge. If you guys aren't aware when you hit five years, you get a different color badge at AWS, which is very exciting I just got the form to fill out to order it yesterday or work yesterday Friday. So,

Host: Jon

Well, congratulations. Very

Guest: Savanna

Excited.

Host: Jon

That's a huge milestone. I didn't mean to interrupt you, but five years is a huge accomplishment at AWS.

Guest: Savanna

Yeah, I keep on having to introduce myself on calls and people are like, wow, you've been here for a while. I'm like, oh no <laugh>, I'm not old or just AWS old. But yeah, so five years in the billing space at AWS. Before that I worked at a startup for a little bit kind of got to see what it was, working at a space that was still kind of finding its feet and developing its product. And before that, I worked in healthcare tech and was based out of Wisconsin so kind of a blended development and support role with helping hospitals understand and make use of the software that they've purchased. So been in the tech industry my entire career, just kind of different flavors the entire time and I'm very happy to have wound up here even though I think there are a lot of different paths to get to cloud FinOps or cloud financial management. Happy that I ended up taking this one. I guess.

Host: Jon

So as part of the AWS optics team, can you help us understand what the optics team does and what are some of your roles? I know you're working in the telco thing, but how does that elaborate to other customers or how do those customers benefit from that?

Guest: Savanna

Totally. So optics stands for optimization intelligence for cloud systems in case that's not something that we've put in the show notes or whatever, but

Host: Jon

You know what, I don't think, I'm not sure. I had a conversation with Alex Head, I had a conversation with Steph Koch. I don't think we ever defined optics. She might've done it during one of the conversations. That's a little good. That's a little nugget I'm going to have to share with everybody.

Guest: Savanna

Yeah, it's kind of not a hidden acronym, but we've just referred to it as optics so often that I feel like that's just the buzzword now and that's what everybody refers to us as. So we've kind of not moved away, but it's not super often that you hear the entire name. But yeah, I put it in the chat as well. But optimization intelligence for cloud systems and we work with everything optimization related, so helping customers drive their costs down and make the most out of the AW w s resources that they have, optimize their journey on AWS, and make sure that they're in a good spot when it comes to paying their bill and understanding what goes into that bill. So Optics works with a subset of AW S customers that are designated as either strategic industries or strategic customers at AWS.

Guest: Savanna

And we've got two different roles on the team. There's a customer enablement specialist, which is the role that I sit in, and then commercial architects. So if you're familiar with the AW AWS support model a commercial architect is a little bit more like a solutions architect. They're kind of a specialist, whereas the customer enablement specialist is more of what we consider a general practitioner. That's usually the analogy that we use for your GP versus your specialist. So c e s customer enablement specialists are a lot more boots on the ground and tend to be a little bit more ingrained in the customer's rhythm of business generally. And then commercial architects will come in for targeted projects, something that's a little bit more technically optimization focused. And again, depending on the customer relationship and the people involved, that can look a little bit different too. But that's generally how we define it. Does that help?

Host: Jon

Oh yeah,

Guest: Savanna

A little

Host: Jon

Bit. So Savanna dropped in the name in the chat and I'll share everybody in the description. Here's what I'm envisioning before I get way off a topic. If you're a Marvel person and you go out the acronym of Shield and Spell and say that all out, I envision you guys had this long name and then you decided to go optics, and Alex and I talked about how optics the name came about and how they whiteboard everything, but that's a huge Marvel reference for those who are listening.

Guest: Savanna

Yep. Yeah, Alex loves to tell the whiteboard story if you, I'm not sure if she shared some of the other names that were on the table, but next did time to talk to her. You should see if you get a list because there are some good ones in there.

Host: Jon

She did share a couple of those. I'm not sure if she had a picture of it. It was a name right before she went out on leave. We'll have to talk to her about that a little bit. So Savanna, let's talk about cloud financial management or even FinOps and I, I'd like how it says cloud financial management and it's not AWS Cloud financial, it's really kind of a broad topic, and talking about the cloud because no matter how you talk about it, it has to do with the dollar signs tied to a customer's account, help the audience understand what is cloud financial management or even the strategy behind it.

Guest: Savanna

Yeah, absolutely. So a lot of customers find, and a lot of companies as they start moving to the cloud, find that kind of their old concept of finance and the rhythms of business and all the reporting that they used to do has to shift and change a little bit as they move on to the cloud framework because the cloud is very different from provisioning your servers as it should be. That's kind of the whole point. You get a lot more benefits from the cloud that you didn't get versus one from but in making those moves you have to adjust your kind of management strategies the way you think about it et cetera, et cetera. So with cloud, you get a lot more agility and you also can spin things up and spin things down. So kind of an easy-to-digest example is if you provision a server on an on-prem world, you've paid for it, it's sitting in your data center somewhere and you don't necessarily have to think about how much you're using it because you've already paid for it and it's sitting in your data center on a rack somewhere because you have the flexibility of the cloud and you can kind of terminate things and use different purchase models, use maybe a savings planner or reserve instance or spot depending on what your needs are.

Guest: Savanna

There's a lot more configurability and you have to do a lot more kind of real-time monitoring to make sure that you are spending things down if you don't need them because if you leave them up, that impacts your cost versus in kind of an upfront world where you've got that fixed cost. So cloud financial management is kind of ingesting all of that complexity and developing a strategy for how to manage how you think about the cloud, how you think about finances on the cloud, and how you make sure that you're getting the most out of your cloud footprint and engaging with your technical stakeholders to either build on two mechanisms that they already have to make them a little bit more cloud-optimized or create new mechanisms to make sure that you're not kind of just hemorrhaging cash out there or having something sit there that you're not using and not having any cleanup strategies. Does that kind of get to where you're

Host: Jon

Going? No. So that's a great explanation of cloud financial management and understanding what you're spending and how to utilize the resources. And I'll give you a little example I came from a traditional server admin background. We racked, we stacked the servers, we also did the budgeting for an actual physical server and it was spread out over five years. If you think of a virtual server, you think of an easy two instance, you can turn it on, and turn it off, and you're only paying when it's on or off. You're saving it, you have the storage, and you have to take all those things into account. And I think when people discuss cloud financial management, I think they need to hear it a bunch of times and it has to resonate with them at one point in time going, we have to change our mindset, we have to change how we used to think of how the traditional data center is as now we don't have a data center, we don't have to worry about it, but we have to be cognizant of what we're spending in that data center.

Guest: Savanna

Absolutely. I think it's not necessarily not paying attention to certain things you used to pay attention to, but it's shifting your mindset to understand that the playground you're playing in is inherently just different and has different things that should now be on your monthly checklist or your weekly checklist, et cetera, et cetera. And it's also understanding the tools that you have to investigate those things because we've got quite a large tooling suite within AWS. There are a lot of kinds of things that you can stand up for using AW s resources. There's also a very large third-party ecosystem when it comes to monitoring and visualization too. So really getting your feet under you about that, figuring out how to see your costs, what mechanisms work best for you, whom to show them to, and kind of the right levels to view that, think about it and implement it in your rhythm of business. It's a big one

Host: Jon

When we talk about cloud financial management. I'm going to go with CFM because I keep saying that. I'll just use the acronym, and break some things down. I envisioned that when you were in a traditional data center, you had walls, you had limitations on what you could and couldn't do financial constraints, you had physical constraints, but then when you moved to the cloud, those walls open up and now the innovation is pretty much endless, but you have to continuously be aware of what you're utilizing, where you're utilizing it and make sure that you do the right things around it. What is some guidance that you kind of lead people towards within the cloud environment when it comes to financial management?

Guest: Savanna

Yeah, absolutely. So we've talked a little bit about this both every event and kind of before, but a lot of customers and a lot of the people that we work with, especially folks who are coming into their cloud journey, brand new or touching the stuff for the first time, they want that one right answer and they ask us, okay, how do we do this? Right? And there isn't just one right answer, which is both an incredibly true thing and an incredibly frustrating thing for people to hear but there is a right answer for your business and that right answer might change as your business changes throughout the year if there's a seasonality to it or as grow if you're migrating a lot of stuff onto the AWS platform or any other cloud platform, that strategy's going to have to evolve with you. But I think realistically helping yourselves and kind of helping customers think about these questions and get their heads around that ambiguity, it's a big part of my role and a big part of probably anybody in the CFM space's role, and a lot of that needs to come from the root of understanding what it is that your business needs right now, understanding what your priorities are and taking a really honest inventory of what matters to you and what resources you have and what you can do at the moment.

Guest: Savanna

Does that make sense? Yeah.

Guest: Savanna

I'm only going to ask that 30 more times.

Host: Jon

I was going to note that and be like, okay, she has a keyword or phrase she used by the way. I have plenty of those. I have a sticky on my desk to make sure I don't use some of these words because when I go through the recording I'm like, oh, did I say that word again? Don't worry. You can ask. Does that make sense? As many times as you'd like. It makes sense to me and I'm hoping it resonates with our audience folks. We're talking about cloud management or financial management and the strategy behind it. Now a strategy is not a prescriptive thing. It's not a here, this is what's going to solve your solution. Savanna's talked about it is that the biggest frustrating part for companies, whether they're startups or enterprises when they come into it is they're looking for that one right answer. They're looking to go to AWS and say, Hey, listen, here's my issue, here's my problem. Can you give me the playbook on how to solve this? And it takes a little bit of digging and going through it because we don't understand or they don't understand what your business need is at the time or the growth throughout the year and what you're utilizing is a correct assumption.

Guest: Savanna

Yep. Yeah, absolutely. And I think the word optimization is kind of interesting too. I like to take that a couple of different directions because there are a lot of things that you can optimize for and one of the most easy-to-digest classical examples I would say, of kind of balancing business needs or determining what strategy you want to use is thinking about what you want to optimize for. If we're thinking about RIs or savings plan strategy and those are commitment-based purchase options that you can use to cover EC2, RDS, etc, etc… within your accounts. You make a reservation that tells AWS that you're going to use this thing long term and we give it to you at a discounted rate because of that commitment to continued utilization customers have to balance a couple of different things when they're thinking about this, whether it's picking up every single nickel that they can that's one way to optimize.

Guest: Savanna

But given the kind of different options that you have, the different granularities of these purchase options and these products, if you have a large tech team that is a little bit less sure with what they're going to be using for the next year or three years, that's likely going to take a lot of discussions to get them to zero down and commit to a specific thing. So even if having those hundred hours of conversations gets you to a spot where you are saving more money it's a large time investment, so you can optimize for picking up every dollar or you can optimize for easy lift or easy flexibility, lack of having to chase down all of these different groups and just buy something a little bit more specific or a little bit less specific. That still gets you a large discount margin. So in that example, you can either optimize for dollars for time or kind a little bit of both.

Guest: Savanna

You can use a blended strategy. So thinking about whether or not you want to prioritize a certain thing, this round is a big one. Maybe you're just migrating onto AWS for the first time. Teams don't know where all of this is going to shift after you do the lift and shift and then start the optimization process. That's likely one of the times that you should optimize for flexibility. And then when we check in at the end of that term, they're like, they're going to have a little bit more information about what that's going to look like for the next year and three years. And you can start building that strategy towards more specific offerings that get you a higher dollar margin but there's not one easy button there. And you do have to take into account everything that's going on in your ecosystem, everything that's going on within your business, and where you're at at the moment.

Guest: Savanna

The other thing that I see folks get into kind of the analysis paralysis loop on sometimes <laugh> is like, what should we do this time versus what should we do forever? And thinking about what's in front of you and making the choice that you can make right now with the resources that you have. Maybe you have one cloud financial management person who's also doing three different jobs because you're growing so fast that you haven't hired somebody full-time yet. Very, very common situation. Maybe we do the easy thing that's a little bit less of a lift now and then in a year from now or in six months from now, once you've hired a designated person or whether you've kind of figured out who's going to have these responsibilities for a longer period and going to upskill on that a little bit more, we can take a deeper look and invest more time into developing a strategy for you that's a little bit more specific.

Host: Jon

So then I'm going to come back to the optimization thing, but you touched on this last part of a specific person or come back and evaluate it. There's a lot there to talk about. Yeah, but I want to center around the person that is might be wearing multiple hats that you only have one person to do this, or you're looking to hire anybody. Is it really the job of one person for financial management or cost optimization or optimizing the environment or is it everybody's job in awareness but one person is there to oversee it?

Guest: Savanna

So a little bit more of the latter cost-conscious culture is absolutely something that I think, and I think anybody else who works in the CFM space would echo me on this. That's critical to making sure that you have the best experience you can on AW s and really kind of making good on all of that optimization if you're a developer and you just log into the console every day and fire up these resources. It's so removed that you don't always realize necessarily that has a price associated with it. If you're spinning up a G4 DN to like 24 x or whatever, that's a large instance that does have a high price associated with it. And if that's not something inside your head that you're thinking about, you might not realize the cost impact of that and what that looks like for the business overall.

Guest: Savanna

So I think my team specifically, and I think you and a lot of other folks in the CFM environment and ecosystem dedicate a lot of thought and time to fostering that cost consciousness and encouraging people to evangelize throughout their organization and throughout anyone who works on the cloud in any capacity. That cost consciousness is something that we want to infuse into our daily work because that just makes a lot of these things a lot easier and it decreases the amount of cleanup that you have to do if every time you're spending down an instance you're like, okay, what else do I have to clean up? Are there AVS snapshots out there that I need to delete? Let's run through that playbook in our head a little bit and make sure that we don't end up with a larger cleanup initiative later. So that's a big one.

Guest: Savanna

When it comes to kind of the cost CFM governance, shall we say, we can make up titles for everybody, <laugh>, everybody titles it differently but kind of cloud finance governance or pod governance overall with a finance flavor the way that looks in terms of buts and seats or people hired can be very different depending on how an organization wants to run it and how that organization thinks about cfm? So we do see people wearing a lot of different hats. Sometimes we see CFM folks sitting under the technical org. Sometimes with the finance org, you've got a team of people working and there's kind of representatives from both sides. Again, I don't think there's any one right answer, and you don't necessarily have to have someone who's hired to just do cloud finance a hundred percent if that's not what works for your business, it certainly is a shared responsibility but that is something to think about and negotiate and likely iterate on as your growth too.

Host: Jon

Change of mindset is really what it takes with regards to CFM and spinning up or utilizing resources within a cloud environment. Now in any cloud environment and specifically talking about AWS with its breadth and DES services, there's a lot at your fingertips at you're able to utilize one. I think if you come from you're not paying the bill, it's very difficult to kind of keep in your mindset and say, Hey, listen, I spun that up. I need to turn it back down. One of the key things is having that internal evangelist saying, Hey, listen, guys, we need to make sure that we, when we write or build something, we have a reversal of that bill to do a cleanup of those resources and an iteration to make sure that things are being removed completely or we need to put in monitoring in place.

Guest: Savanna

Yeah, I see a lot more of a push for that within probably the last six months even. I'm sorry, but the sun is coming out in Seattle for the first time in a month right now. So it's getting my eyes a little bit,

Host: Jon

Man, you can always count on Seattle weather to change at the fraction of a second and never plan for it

Guest: Savanna

To be exactly what you don't want it to be at any time.

Host: Jon

It's all good. It works.

Guest: Savanna

Anyway, back to your actual question. Oh, shoot, sorry, what was your question?

Host: Jon

All right, the

Guest: Savanna

Blooper

Host: Jon

A reel that is going in the blooper reel <laugh>. So Savanna, I'm, so I'm going to reiterate my question for you just because of Seattle weather interrupting your thought process, but speaking of a thought process is a change of mindset within an internal company to now start removing resources that you don't need or not using and put in the proper monitoring in place or the proper processes. This is not something that's done overnight.

Guest: Savanna

Yeah, so two thoughts on this. One, I've started to see a lot more customers and a lot more folks that we talk to on a general basis, whether that be typing questions into the Twitch stream or the people kind of milling about and just asking questions at reinvent. But I've started to see a lot more folks asking for something akin to a cost optimization checklist when they're first migrating on or spinning up a new workload. And that's got a couple of different flavors of that I'm sure can find other ones out there on the blogosphere or within the c FM like the AWS blog series as well. But that's certainly something that is coming to the forefront of everybody's mind a little bit more in terms of what are the best practices that we should get in place from the beginning. What are the things that we should be thinking about when we're first moving something on or first spending something up and how can we make sure that we're hitting that checklist and checking all those things off?

Guest: Savanna

So that's kind of a big one that I've seen a lot more of an appetite for in recent months. And then the second piece, monitoring is a big one. I've seen customers do this in a bunch of different ways. We've got a pretty good tooling suite within AWS for monitoring. There are budgets and all of the different budget products are based on a threshold. So there are some pretty creative ways to use those and different customers use some differently depending on what their desired outcome is, right? At the very minimum, I usually help people to think of budgets like insurance. When you're setting them up, make sure that you're at least controlling for the worst-case scenario. So set one to make sure that if your savings planner or I utilization just plummets off a cliff, you get a notification. You don't have to be checking that or thinking about it and just get that push notification.

Guest: Savanna

Similarly, if you've got a dev account that you want to keep an eye on that shouldn't be going above a certain dollar threshold, you can build that in and get a notification that way. The other common one that I've seen people do is regions, if you have a list of approved regions that you should be using, they'll set a budget alarm to detect any spending outside of those regions as well. So if somebody gets creative and decides to spend something up somewhere outside of the defined region list that you've got, you'll know about it fairly quickly. We also have a tool called anomaly detection or cost anomaly detection within the cost explorer suite of tooling as well, which similar kind of outcome I guess, but based on ML instead of just a threshold. So you can configure monitors within cost anomaly detection to kind of look at different subsets of your business, whether that's a service level monitor, so tell me if EC two dolls or tell me if EC two spikes or a subset of accounts tags, et cetera. So if you've got kind of different business units or different projects and different account groupings, you can create monitors for each one, and then if you've got a traffic increase or a cost increase on any of them, you'll get a notification about that and those anomaly detection monitors will kind of keep you in the loop of what's going on.

Host: Jon

So, everybody, I want to give a quick summary of what we're talking about in cloud financial management strategy and kind of discussing some of the things about not only your cloud account but what are the things you can put in place not only externally but internally on some of the businesses and processes. One of the things we're talking about right now is some of the tooling available to you, Savanna, the anomaly detection is great and able to work in conjunction not only with your budgets if you have a budget set of like a thousand dollars, right? Yeah. And you want to make sure that you have no issues, but you can use the anomaly detection that says, Hey, listen, I know I should not reach a thousand, but if for some chance this goes in doubles, it's not going to hit a thousand, but I want anomaly to pick it up that I'm not using those easy two instances. I've never spun up those, and you can kind of monitor those in place, and I think there was a great add on top of that to use some of AWS's ML services integrated into monitoring your accounts.

Guest: Savanna

Yep. Yeah, exactly. I always recommend that customers use both if they're going to use one they both work in tandem very seamlessly and they monitor for different things. So again, it's kind of just being thoughtful about what you want to monitor and what situations you want to control. But with anomaly detection specifically, and I think we've got some resources about this, definitely at least a switch episode about this somewhere within the ether. Start by setting up a service level monitor, start looking at what comes out of it, get a feel for how the tool works and how it looks, and then continue to iterate on that. It is ML-based, so it will learn with you. A lot of it is going to be predicated on how much feedback you give it as well. So if you set up a new set of animal cost anomaly detection monitors and start going in there and say, okay, yes, this is an anomaly, this is a true anomaly, marking that as true or marking something as a false positive, the tool's going to get better as you continue to feed more information into it, and it'll get a lot better at detecting things that you would consider through anomalies.

Guest: Savanna

So like many things in cloud financial management, start small, start somewhere and then keep working with it, keep iterating on it, and you'll get to a place where you're monitoring and getting a lot of value out of the tool as you kind of move through that process.

Host: Jon

So anomaly detection learns as you learn how your environment's doing and it'll start tailoring it and your alerts based on this. So take a little bit of time upfront and do that. Savanna, I want to jump back to the optimization comments that you were going on earlier because it's very interesting that you mentioned it. By the way, one of my keywords is interesting. For some reason, it's just a thing that pops into my head. I got to write a new word down. It's

Guest: Savanna

A lot of interesting stuff out Jon,

Host: Jon

Like the default word. I got to very educational by the way. So I posted, I think it was yesterday, with regards to cloud optimization versus cost optimization, and you were touching on that around just specifics of optimization not only in your account and saving dollars, but optimizing for a data center migration or migrating you can optimize going forward. Is there a balance between cloud optimization and cost optimization when it comes to workloads and applications?

Guest: Savanna

Yes. So easy answer. Yes, there's a balance for that.

Host: Jon

All right, well that answers it. Thanks. No, I'm just

Guest: Savanna

Kidding. I think the example that I can give that makes it most clear that's like at the tip of my brain isn't necessarily related to a workload but is a little bit more related to chargebacks. Is that something?

Host: Jon

Yeah, go

Guest: Savanna

For it. Okay. So with chargebacks, let's say you have a complicated business that has a bunch of different business units that all have their budgets and for whatever reason, you have a lot of resources that are in a shared service account or several shared service accounts that all of those BES are sharing. If you are the cloud financial management person who is responsible for giving every single business unit a broken-out bill at the end of the month you have to find a way to charge that back. If all of these business units are using tags, depending on what those shared services are in the shared services accounts, sometimes that can be fairly easy to map back. Sometimes it's not. Oftentimes, especially if you're just kind of coming to that inflection point where you need a big chargeback strategy there hasn't been a lot of tagging going on.

Guest: Savanna

So you have a couple of different choices within your account structure. Maybe it's fairly easy to just give everybody their AWS account, and their bill, but then you've got to do something with the shared services account. You as that CFM point of contact or lead who's on the hook for splitting that bill up can either take a lot of time and a lot of energy sifting through the billing data for that account, assuming that you have no tagging or no other kind of indications at that point and try to map back exactly who did what or however many hours you want. Honestly, I'm sure you can make that take an entire month's worth of hours if you're at a large enough scale and want to sort through every single resource and think about every single thing that was used at a very granular level, that's not necessarily the most effective use of your time.

Guest: Savanna

So in the most simple way to do it, you could also just proportionally split that shared services account cost between every business unit and say, here you go. You all use this account. At some point, you've got a piece of the pie. Those are kind of the two ends of the spectrum, and there's a wide breadth in between as well, which is usually where we see our customers fall. Some things you can do proportional usage on very easily. You can use consumer data to kind of develop either some sort of script or some sort of chargeback model that will do a lot of that heavy lifting for you but there are likely some things that you're going to have to end up just blending and doing a proportional slip for. So the balance of how granular you want to be versus how much time you want to spend on it and how much time you want to dedicate to other things is kind of what you have to negotiate and figure out there because if you are the CFM lead on that account or the CFM lead who's only responsible for cost optimization across that entire business if you spend 300 hours trying to filter out everything specifically, you're probably leaving a lot of other stuff on the table and maybe it's more worth your time and worth your organization's time if you spend two hours on it and just do an easy proportional split and then dedicate the rest of that time to finding optimization opportunities, spinning out better cost governance, helping to make a tagging strategy that will make that easier in the future.

Guest: Savanna

The opportunity cost and the cost of the time cost are something that we need to keep in mind and something that I think moving to the cloud and kind of carving out that cloud financial management motion it's critical.

Host: Jon

So do you see many customers doing chargeback shows back to internal departments?

Guest: Savanna

Yes. Again, depends on the customer. I think it's fairly common, especially at a large scale to have multiple different business units that have different budgets all within the same organization so a set of linked accounts within that AWS organization. Generally speaking, they do want to do some sort of throwback chargeback to make sure that everybody A gets their bill depending on how those budgets roll and at least B, so that they understand what their costs are. You can do that a couple of different ways, but there's usually some amount of slicing and dicing that needs to happen once you get to a certain organizational structure.

Host: Jon

I want to quickly touch on some of the key things that you can do. One, not only going into the cloud, if you have existing resources already deployed in your cloud environment, it's not a huge deal. You can go back and do some of these. Savanna, you touched on 'em with regards, to total savings plans utilizing spot right sizing, doing some of the key things in general budgets, ml. I want to quickly touch on the curve file. Everybody loves the curve file, by the way. I

Guest: Savanna

Love the curve file.

Host: Jon

Yeah, I've seen pictures of people printing it out and running it down their hallway. I'm not a huge,

Guest: Savanna

I feel like that is a milestone in everybody's cloud, AWS cloud cost career. At some point, Alex printed out all the columns. At one point, I'm pretty sure still when I moved offices during covid, I had to clear out all of the paper graveyards of all the things that were just like in my drawers and I found the curve file column printout that I had printed out in like 2018 as well. So I feel like everybody does that at some point.

Host: Jon

You got to do that at some point to understand what goes into the curve file and how to understand all the information that's there and then how to filter it. But to

Guest: Savanna

Look at it and go, oh no, and go back to SQL and try to parse it out that way.

Host: Jon

Hey, that's a good idea. AWS has some internal tooling that you can utilize. You have the cost explorer, you can visualize some things. You can break down some of your usages back and forth. The curve is something that you should set up. I mean immediately when you create an account, get that going and definitely what is it, the park X format that's crucial to is it

Guest: Savanna

Parque resource IDs? That's right. You always want to enable those resource IDs. That's my biggest recommendation because that's going to give you the most granularity possible and in my opinion, and my experience, usually if you're going to the cart, you need something deeper than what you can get in Cost Explorer or get in our other billing artifacts and most of the time that's going to be your resource id. So the KE can help you answer questions, which three buckets are costing me the most because that has three bucket names is a resource id. If you don't have resource IDs turned on in your car, you can get close, but you're never going to be able to point to exactly what the resources are doing the thing. So making sure that you click that resource IDs checkbox when you're setting up your car is critical

Host: Jon

And it will help you also filter down that resource ID and the cost and everything associated with it. So Savanna, real quick one of the key things that I always see on social media is talking about their cloud bill and everybody's always sticker shock and Oh my God, I can't believe I'm spending so much on it. There are two things I think when I see it as one is education and skillsets around their cost and the utilization that it's not a once-and-done type thing and to continuously monitor this is not something you do on a Friday and then come back in six months and say, oh, we got to do it again. The other thing I want to want to talk about is that when you go to the cloud, you're using new resources and new services that you were never achievable or weren't achievable in the timeframe that you wanted. So you would request this and six months later you'd get it. Now you can log in and five minutes later have exactly what you're looking for. You can innovate faster and excuse me, got a cough for some reason. Cough.

Host: Jon

Yes, I'm leaving that in there because that's what happened. But talking about the innovation of the cloud allows you to not only move more over there, you might have, say all your applications from your data center moved over, but now you're able to do more and innovate more. So yeah, your cost will go up, but you're also doing so much more in the cloud. Yeah. What are your feelings on this?

Guest: Savanna

Yeah, so I think one of the largest business propositions of the cloud and one of the largest benefits is the ability to innovate and experiment. We have a lot of, I think the big one right now that I keep hearing about is like A I M L services and you can play your own SageMaker. You can experiment and try things out easily within your AWS account without a lot of commitment. If it doesn't end up working for you, you can spin it down, and not use it anymore. If you need to think of or kind of shift what service mix you use, you can play with that too. Whereas in a data center environment, you're kind of locked in. Once you buy something, yep, provision it. It's on that five-year action schedule and you've got to whether or not you're using it. So experimentation is a lot higher risk because of that sunk cost whereas on the cloud it is a lot easier to try things out, do a POC, see if it works for you, and kind of go from there.

Guest: Savanna

It's also exciting to developers often the people who are physically doing this experimentation because they have so much freedom and so many kinds of new things to try. So that is kind of a soft benefit, is the exciting piece of it. Keeping your workforce engaged and making sure that the people who are hands on the keyboard have those tools in their toolkit and can play around with experiments and also build their skill sets is a big one too. Going back to that iterative piece, as you mentioned, it's not something that you just all set up and you're good to go. There aren't a lot of absolutes that we deal with. We do have a couple and even those are fair, I guess, flexible always. I always encourage customers to have a way to view their costs, whether that is a cost usage report some kind of dashboard that they've built themselves, cost explorer, et cetera, et cetera.

Guest: Savanna

Make sure that you have a way or a place to go to see your costs. If I'm on the phone with somebody and I say, okay, let's go look at X, Y, Z service or let's see how much this is costing you, I want them to have a way to go do that because if you can't see it, you can't fix it and you don't know what's out there and if the only thing that you're getting is just that emailed invoice at the end of the month with a total on the top, you're really not seeing the whole picture and you're probably going to get sticker shock at some point because that one up number that you get at the end of the month is not necessarily as useful as looking at it day by day or week by week and taking kind of a more granular slice and advice into what's sitting in your AW S environment.

Host: Jon

I think cloud financial management has created a new role or awareness within companies and they kind of more of a FinOps-type role where they're being aware of what they're spending within their environments on a day-by-day basis because it's no longer a set number over five years, two to five years, the number will fluctuate and it's hard to plan, and I think that's one of the things that frustrates older companies or enterprises is that they're used to planning out years in advance when cloud-first companies understand the fluctuation and they realize that some of the benefits and costs come in and they design appropriately for it.

Guest: Savanna

Yeah, I think what year the business product is an influence that a lot too. Not necessarily just cloud first versus kind of coming from an on-prem mindset, but there are some companies and some businesses where your product is very seasonal. If you're a game studio and you have a AAA title launch, that's going to be a massive spike when it launches because even if you are coming from an on-prem world, you're used to that fluctuation and kind of what that looks like. It's a lot easier for folks to wrap their brain around the elasticity of a concept. Whereas if you have a business that's a little bit more steady state or just providing the same service every day and usually doesn't get a lot of traffic variation, maybe gets a little bit, but not like a big seasonality spike or a big change depending on the day or the event or whatever's going on at the moment, those businesses, it usually takes a little bit longer for them to digest it and kind of think about the cloud benefits and two on that and then pivot their strategy appropriately. So

Host: Jon

Savanna, we're wrapping things up here in another minute or two. I have two questions for you. After listening to this talk, my audience is curious about how they can start creating their cloud financial management strategy. What are some recommendations or approaches that you might provide to them?

Guest: Savanna

Yeah, absolutely. So take a deep breath. You don't have to do everything all at once. <laugh>, and it's probably not going to be useful if you try to do everything all at once. There are a ton of good resources out there to help you kind of mill through what's available either within AWS or something that you can build yourself to get your feet under you and understand what tools are out there. Do a little bit of research, play around in your account, get into cost explorer, get into those tools that kind of come standard, get the curve set up, see what is available and understand what you have right now. Then start thinking about what questions you want to answer that matters most to your business at the moment, and use those insights to build a strategy that you can then iterate on. We've got a framework of dashboards called the Cloud Intelligence Dashboard framework that is available within the Weller Labs if you can want to do an easy deploy or quick deployment and get those out there.

Guest: Savanna

Going through the cost optimization pillar of the well-architected lab framework is great because it walks you through how to do a lot of things in cost explorer, even if you don't do all of the exercises. Just reading through and kind of seeing what tools you have available and seeing what levers you have to press will certainly be helpful for you. And I guess just, yeah, again, don't feel like you have to do everything. Pick one thing to start with and work on that. Reevaluate in a week, a month, a quarter, whatever makes the most sense to your business, and continue to iterate. That goes for optimization as well. If you're trying to optimize every service at once, that's likely going to be pretty overwhelming for you. It's also going to be pretty overwhelming for your tech teams. If you just send out one email that says, optimize everything that you have in your AWS account, they're not going to know what to do with that.

Host: Jon

Send that on Friday and by end of day Friday, you need this done perfectly.

Guest: Savanna

But if you target it a little bit more and say, okay, let's think about EC2 right now, or there is a tangible list of steps to take to check this certain thing first. That's a little bit more actionable. It's small enough that people don't feel overwhelmed and those little things added up over time are really what's going to put the needle for you.

Host: Jon

I think the first thing that you provided was to take a deep breath. You can't do it all at once. It's going to be okay. I think that's key for folks coming into their environment, whether they've seen it, they're doing it, they're trying to create it, whatever it is, they're at the first step or the last step in between. Just realized that it just takes time and iter iteration and it's never done.

Guest: Savanna

Yeah, it's never done, and you're probably going to get curve balls along the way. Just like in life. We all get curve balls along the way. I was so ready to hit the ground running last Tuesday and just make, do everything and just be on my game for 2023, and I then got a new laptop and had to spend the week in and out of it trying to set it up and that I could have let that just throw me off for the rest of the month or the rest of the year but you kind of just have to work with what you got, pivot and go for it and do the best you can with what you have at the time. So

Host: Jon

Just go with it. I got to get a new laptop soon, and I'm not looking forward to it. We all know those horror stories and things. You got to go through the reinstall setup and can't remember what you installed before or what configuration you made.

Guest: Savanna

Every day I find a new thing that I'm like, no, I have to reinstall this too. I <laugh>

Host: Jon

Well is living Larry. So, Savanna, I want to give folks a little bit more information on how to reach out to you or where to find more, and you also do keys to optimization on YouTube. You want to share any information, whether they can follow, subscribe, or whatever you want.

Guest: Savanna

Yeah, absolutely. I would say that following the keys to optimization on either YouTube or Twitch is likely the easiest way to get in contact with us and get started there. We do have an email address, which stuff is going to kill me for not having at my fingertips but we say it every show and I can probably grab it and get it to you before this publishes. It will

Host: Jon

Be down in the description below. Don't worry, we'll save you from getting yelled at <laugh>.

Guest: Savanna

Perfect. But there is an email address through the keys to optimization which shows that you guys can reach out to if you have specific questions. We are on a little season break right now, but usually, it is every Thursday at 7:30 AM Pacific, 3:30 PM British time if I'm remembering correctly, and doing that math right, and we run every week. Please feel free to drop in post questions in the chat, and interact with us that way. Happy to answer questions as they come in and got a pretty exciting topic. Slate. I was going to say title slate. It's not a title slate, it's just topics, topics, and slates for the beginning.

Host: Jon

Awesome. Thank you, Savanna. So Savanna, thank you so much for joining me. I appreciate it.

Guest: Savanna

Thank you so much for having me, Jon. It was lovely.

Host: Jon

All right. I'm glad you enjoyed yourself. It was a very interesting topic and we didn't get to everything around cloud financial management and strategy, including the well-architected framework for cost optimization. But don't worry, there's always more information and more podcasts on the way everybody. Savanna Jensen, senior customer enablement specialist at AWS and part of the AWS Optics Team. Savanna, thank you so much. Thank

Guest: Savanna

You for having me,

Host: Jon

Everybody. My name's Jon Myer. Thank you for watching the Jon Myer podcast. Don't forget to hit that like subscribe, end, notify, because guess what folks? We're out of here.