Preemptible VM Instances are short-lived, cost-effective virtual machines offered by cloud providers that can be terminated at any time with limited notice. These instances play an important role in cloud computing by providing significant cost savings for suitable workloads while contributing to efficient resource utilization. In FinOps, preemptible instances are essential for optimizing cloud spending…
Consumption-based pricing is a model in cloud computing and FinOps where customers pay for the exact amount of resources they use. This approach contrasts with traditional pricing models, offering a more flexible and cost-effective solution for modern IT infrastructure. As organizations increasingly adopt cloud services, understanding and managing consumption-based pricing has become crucial for optimizing…
Capacity Reservation is a service offered by major cloud providers that enables users to reserve compute capacity in specific availability zones for a specified duration. This feature is particularly important in FinOps as it allows organizations to balance resource availability with cost-effectiveness, ensuring that critical workloads have access to necessary resources while optimizing overall cloud…
Cloud pricing models define how cloud services are billed and consumed, directly impacting an organization’s cloud costs and financial management strategies. In FinOps, understanding these models is essential for effective cost optimization and resource allocation. Common cloud pricing models include pay-as-you-go, reserved instances, savings plans, spot instances, and consumption-based pricing. Pay-as-You-Go Model The pay-as-you-go model,…
Cloud sprawl is the uncontrolled proliferation of cloud resources, services, and instances within an organization’s cloud infrastructure. This phenomenon often occurs when cloud adoption outpaces governance and management practices, leading to inefficiencies, increased costs, and potential security risks. It occurs when there is a lack of centralized control over cloud resource provisioning, resulting in: Common…
Resource scheduling in cloud computing refers to the process of allocating and managing computing resources such as CPU, memory, storage, and network bandwidth to various tasks, applications, or workloads. It is a fundamental component of cloud infrastructure management that directly impacts both operational performance and cost optimization. In FinOps, resource scheduling is particularly important as…
Shadow IT refers to the use of information technology systems, devices, software, applications, and services without explicit IT department approval. In FinOps, Shadow IT encompasses unauthorized cloud services and resources that employees or departments utilize outside of official IT channels, potentially impacting cloud cost management and organizational efficiency. The Rise of Shadow IT in Cloud…
Savings Plans represent a significant evolution in cloud cost optimization strategies. Introduced by Amazon Web Services in 2019, these plans offer a more flexible alternative to the traditional Reserved Instances model. They allow organizations to commit to a consistent amount of compute usage (measured in dollars per hour) in exchange for lower prices than On-Demand…
Azure Policy is a governance tool within Microsoft Azure that enables organizations to enforce rules and maintain compliance across their cloud resources. It plays an important role in cloud governance and is particularly important in FinOps practices for managing and optimizing cloud costs. Key Components of Azure Policy Azure Policy consists of several key components…
AWS Service Control Policies (SCPs) are a component of AWS Organizations that enable centralized control over permissions and resource usage across multiple AWS accounts. In the context of FinOps, SCPs play a vital role in managing costs and enforcing financial governance within cloud environments. Key Features and Functionality Policy Structure and Syntax SCPs use JSON…
The Shared Responsibility Model is a framework in cloud computing that delineates the security and operational responsibilities between cloud service providers and their customers. This model is crucial for effective cloud cost management and FinOps practices, ensuring clear accountability and efficient resource utilization. In the context of cloud computing, the Shared Responsibility Model outlines which…
Open Policy Agent (OPA) is an open-source, general-purpose policy engine that enables unified, context-aware policy enforcement across the entire stack. Developed by Styra in 2016, OPA has gained significant traction in the cloud-native ecosystem. In the context of FinOps and cloud cost management, OPA plays a crucial role in enforcing cost policies, automating compliance checks,…