Cloud Economics or Cloud FinOps: what is it and why your department needs it

Welcome to the fascinating world of Cloud Economics. 

Written by Michael Kubik Delivery Lead for Cloud at Blue Crystal Solutions.

Cloud Economics, often called FinOps or Cloud Financial Management, is the practice of understanding the financial impact of cloud usage within an organization. It’s not just about reducing costs; it’s about optimizing your cloud investments for better business outcomes. In simpler terms, it’s the ABCs of managing your cloud spending effectively.

The Three Pillars

• Visibility: The foundation of Cloud Economics lies in having complete visibility into your cloud usage and associated costs.
• Optimisation: Once you know where your resources are going, the next step is to fine-tune those investments for better efficiency.
• Governance: The final pillar involves putting policies and processes in place to maintain this optimization over time.

Why Does It Matter?

In the ever-dynamic landscape of business, time is money, and resources are precious. Therefore, understanding the economics behind your cloud investments can make or break your bottom line.

• Cost Management: The pay-as-you-go model can be a double-edged sword. Without effective management, costs can spiral.
• Resource Allocation: Effective Cloud Economics helps in allocating resources where they are most impactful.
• Strategic Planning: With better financial understanding, organizations can make data-driven decisions for future investments.

 How Does It Work?

• Budgeting & Forecasting: Create a cloud budget in alignment with your business objectives.
• Cost Allocation: Assign cloud costs to specific departments, projects, or business units.
• Monitoring & Tracking: Use tools to continuously monitor usage and expenditure.
• Reporting & Analysis: Analyse the data and look for opportunities to optimise.
• Policy Enforcement: Implement governance protocols to sustain the benefits.

Cloud Economics In a Nutshell

Cloud Economics isn’t just an IT concern; it’s a business imperative. Whether you’re part of a startup or a multinational enterprise, understanding the economic implications of your cloud usage is key to making smarter business decisions. So stay tuned for our next blog post, where we’ll delve into the specific benefits your organisation can reap by mastering Cloud Economics. 

Our aim is to deliver concise, actionable insights, perfect for busy people like you – cheers to smarter spending and smarter business!

Contact us to learn more about our Cloud Economics Service and what benefits you can gain for your organisation. Need help with your cloud journey or managing it? We can help there too.