Ep#145 The Future of Cloud Cost Management: Insight from FinOps Expert Eric Wright

Host: Jon

Hi everybody and welcome to the Jon Myer podcast. Today's topic is the Future of cloud cost management and insights from the #FinOps expert. Our #FinOps expert is Eric Wright, Chief Content Officer at GTM Delta. Eric, thanks for joining me.

Guest: Eric

Thanks for having me, Jon. And yeah, #FinOps is something near and dear to my heart. I've worked in fin and ops, so I finally found my niche. This is where tech and money come together.

Host: Jon

All right, well, since you are our fin ops expert for today, I've got several questions I don't want to ask you that we're going to provide for the audience. Our first question is, can you provide an overview of #FinOps and it's significance in today's cloud-driven economy?

Guest: Eric

Well, if you look at the way the community's built, it's generally sort of a two-sided market in that you've got both the finance teams that are around structured accounting, operations, procurement, real, true near and dear accounting finance folks, and that's where the CFO report line would be. And then you're also getting the ops side, which is most likely, we call them platform engineering now or ops. And that is truly these two things. The same way we used to have DevOps was Hey, these folks, they sit right near each other and we all go to the same budget, but we aren't thinking together in how we act every day. So I think that's what #FinOps is meant to be is that how do we include everybody early and through the life cycle of all these changes in the way we consume and pure procure IT resources?

Host: Jon

Eric, I think you hit it right on the head, is that how we provide everybody, get 'em in the loop early, right? You want to from the get-go, from the start of any project and you want to make those data business decisions around some of the key elements of applications and infrastructure and how to implement them throughout the entire life cycle. And it's always a continuous loop. Eric, I'm going to ask you my next question what are the key challenges an organization faces when implementing #FinOps practices and how do they overcome them?

Guest: Eric

You had me in a continuous loop, that's that was it. This is where it breaks Every time that we develop something ops or a fin something, it starts together, but then it doesn't build a continuous loop. So what happens is we move the practices a little more abstracted further into the team and then immediately go back to old practices. So what we'll end up having is we go from, Hey, we're going to aggressively and pragmatically look at how we're spending on cloud resources. Everybody sits together, they do a one-day offsite, they come up with a plan, a micro team, and then what ends up happening, that micro team then eventually sits back to back instead of side by, and next thing you know, they're back in their department bringing back learnings. Maybe they're a bit more evolved, but we still struggle with it on an almost immediate basis, what is this resource costing me and what's it worth to me?

Guest: Eric

And that's like #FinOps is tying business value in real dollars or real widgets, real KPIs against your actual spend so that we can begin to do projections and analysis that's do that the other way around. Do the analysis first, then the projections. This is why I'm not writing software, but that is it, right? We #FinOps is about taking the best of both practices and making them continuously loop so we're feeding back and getting faster, better, and evolving that practice. So that was the longest answer ever. But I mean as I'm going through I'm, it all makes sense. I think I even thought of something I never thought of before. So

Host: Jon

You said the continuous loop, but also what happens is they go back and they say back to back and not side by side. One of the key things that I always notice when you're implementing any new type of methodology or culture, the change is that you have to continuously do it. If you go back to it and you go back to back or you're trying to implement this and it's working great for that first month, first two, three months, and then not everybody goes back to their silo ways where it's not a continuous loop. It's like, man, I got work to do. This is just too much. But if it's part of their daily life cycle, it's going to be ingrained into the culture. Just to add onto that, what are some of the ways that people can overcome this type of back-to-back type without including everybody in the collaboration?

Guest: Eric

I think reward simplicity which even works in development, makes it so that we want just want some documentation with the code. We just want to have, make sure finance is attached to how we do things. Ask the finance team, what can we do better in it to feed you, to make you better at understanding where we need to be. Make sure that each team is learning from each other, not teaching each other, they should be pulling, making it a real want to succeed. And then really you almost need to make it part of MBOs that sits more towards punitive enforcement, which it's, I mean it's needed, but at the very least can we reward it? Can we say, let's do a little hack hackathon, and we'll call it an accounting hackathon, teach the people in it? How do you take the data that we give you from our AWS bill and put it into something, right?

Guest: Eric

NetSuite or whatever it is, sap like I bet they don't even know what the other department does. And by learning that and just saying make them work together and make them come back with a project with a, we did it right, present to the team what the other team does. It's like a good debate if we can't seem to connect. What you asked is, I need, you to tell me what you believe I'm trying to project here. And that's what all of the something ops is, right? Do the finance people know how the ops people are telling their story and then the reverse

Host: Jon

Learn from each other and not teach each other. That's very key. I like that saying. I'm going to save that for later. Eric, what are some of the practical strategies and best practices for optimizing cloud costs through #FinOps?

Guest: Eric

Well, I do know a little bit about cloud optimization. If you're looking around cloud cost and any type of optimization, it really, number one is about understanding what you have in place today. If you can't see the totality of how your resources are being put out there or being managed, you're in trouble. So making sure you've got monitoring observability, a real visibility something, whatever the platform or product is, you have to just say, nothing should go out unless we know where it is and what's the state of any of these things that at any point in time, and that's both for finance and for general operations. And then from there, it's around, okay, can we find out how the spending is going? Can we tie it to other activities, whether it's we put a new application in, we get an increase in use of a particular resource or service?

Guest: Eric

Make sense? Can you assign it just like we would with any outage or any new project? And then the last thing is going to be, can I make this systematic ultimately where it's systems that feed each other and ideally with some kind of automation, that's the sweet spot. As I said, there are a lot of products out there, and go to your AWS resources and just say like, Hey, AWS loves #FinOps. Because they're saying, Hey, the more people that are doing it well, the more opportunity we have to innovate more on the cloud side, obviously for capital benefit, but like AWS wants you to spend less money per service because they want to build more services, they want to make it better. So that's pretty good. It's all in detail, let's just, let's do it, right? Everybody gets better. Even the people that are selling the thing that it almost looks like they're giving away their lemonade.

Host: Jon

Nice. I think complete visibility into your resources, and I don't think any company can do it on their own. There's tooling out there that's completely available. There's AWS tooling, there's Azure, G C P, and whoever you want to do it. There's some native tooling built for it, but there's also some third-party sass that provides some excellent tools and visibility. And Eric, you hit it right on there. #FinOps is not all about, it's not about saving money. It's actually about making money. And the more that you save, the more that you're going to make not only for your company, but for the applications using fewer resources, but are highly optimized for it. And then also on top of that, you said if you save a lot of money within aws, you're going to start migrating and moving towards more applications within AWS. So you're ultimately, it's a win-win for everybody. And I couldn't agree more, Eric, my next question is how does #FinOps promote collaboration and alignment between finance operation and development teams within an organization?

Guest: Eric

There swasn't something before that successfully tied this. There used to be this, at one point it was sort of the CIO, like the CIO would kind of manage the budget side of how you manage tech, and this was like when I was working in finance in the nineties, yes, I'm battled it. CIO used to stand for career is over. They would take somebody who's like an AVP or VP or something. They're like, you know what? We're going to put them over. They get to be the CIO for their last two years so we can bridge them to make their numbers. It was sadly kind of treated that way. But then what's come now is that that became an active member of thinking as an information officer, but it really was budget-focused early and now CFOs usually sit next to the CTOs these days in a lot of finance companies and on everybody's side.

Guest: Eric

We can do the same thing like that. How do you bridge those two people and the #FinOps, #FinOps team, whatever, the community itself is an open community. It is somebody that you can be involved with and you get people that are in finance, in security, in the network that everybody's there coming together and sharing resources. There are a ton of free resources. But yeah, just find a way for that person, that other team to care about telling their story and tying it to a value that you can both deliver. As you said, it's valued, it's saved me money, and making my money worth more, is really what the, that CFO is looking for.

Host: Jon

Eric, one of the things that I think a lot of companies struggle with is now you have #FinOps DevOps as a methodology for implementing things. You have the other type of methodologies that you are trying to implement within your company. You're trying to use this Scrum Agile, some of those are dead, dead, sorry, Kanban. We're trying to do this and what it's doing is adding a lot more overhead to everybody's day. How do you talk about #FinOps and the culture and implement that within your company and show the value of that for companies to not only look at their cost savings, but to look at their bill, but have people care about it?

Guest: Eric

Yeah, well, exactly. And you know, take the old methodologies and we call 'em a new name. Sorry, my table's a little wobbly. My Six Sigma book seems to have slid out from underneath the leg. It finally did come to our purpose, but we had this idea that we've got, it was rad, it was rapid application development, and then eventually we called it DevOps, and now it's platform eng, whatever. There's like a label we attach to it. There's a methodology that is generally in the same range. It's effectively some manifesto, a set of commandments for how you do it, and ops where it is in that sort of needing to be a movement more so than just a methodology. Like Six Sigma was a methodology, but no one cared about the shared outcome. In the end, it was still very individualized. The idea with DevOps and anything ops is how do you make sure that we're always, always looping, looking for the best opportunity to optimize continuously and then feeding back into that? So please, please go to the #FinOps community. There are so many great people there too. That's like the best thing is the people that are there to help you through it.

Host: Jon

I agree. The community is key to everything. Eric, my last question for you is, as a cloud landscape evolves, how do you see #FinOps evolving and adapting to the future?

Guest: Eric

It's probably further along than we realize in many ways because the hyperscalers want to make sure they're as transparent as they can be to their existing and potential customers because pricing can't be a holdout, and there's complex accounting. There are complex things around projections and selling, pre-sale of resources. There's this huge startup ecosystem all around optimizing and saving. #FinOps as a practice is now being injected into how both sides deliver tools. So my finance tool is probably going to tie directly to an AWS account automatically. My operations tool is probably going to have an outbound report directly into some kind of financial management, whether it's through ServiceNow or what other external tooling there is. As we build tools, we're already pre-loading, whether it's APIs or some subset of this application that is delivering data and information, ideally to both sides of the finance team and the day-to-day operational folks. So it's, it's going to be integrated and it's going well. I think in general because everybody wins when they do it well, right? The startup ecosystem is super strong. Finance people get better. That money's worth more, especially since we've got a tough time right now and it's not going to eat up for quite a while. So we have to stretch our dollars and you want to do it the smart way, which is not just saying take 30% off every service.

Host: Jon

Wow. Eric, thank you so much for your insights on the future of cloud cost management and insights from the #FinOps expert. I appreciate you joining us for some of these in-depth questions about #FinOps.

Guest: Eric

Thank you.

Host: Jon

All right, everybody, it's Eric Wright, chief Content Officer at GTM Delta. My name's Jon Myer. You've been watching the Jon Myer podcast. Don't forget to hit that, like subscribe, and notify because we're out of here.