Cloud Hero's Journey - Where are you now?
There are 3 types of cloud journeys:
Blue line (Cloud Excellence)
Red Line: Tactical cost reduction efforts have no long-term impact
Represents an organization where cloud costs grow exponentially, exceeding financial forecasts. The CloudOps team is then given a cost reduction target that feels reasonable to the financial team.
The target prompts the team to perform housekeeping activities like renegotiating supplier contracts, purchasing reserved instances (RIs), removing unused instances, and rightsizing.
In the short term, these activities can deliver cost reductions of ~20%.
However, housekeeping activities also remove resources from growth activities and fail to address the root causes of the exponential growth in cloud cost. And once finance teams stop focusing on cloud spend, costs begin to creep up again.
Green line: Executive sponsorship delivers better results – but costs still rise
Represents an organisation with a more formal cost optimisation program, typically with executive sponsorship. Check out this article on where cloud costs sit on your board agenda.
The executive leadership is more serious about tracking the drivers of cloud cost and has established a FinOps function.
Typically, this is a high-growth organisation that wants to address the technical debt preventing it from scaling. Such organisations recognise that there are constraints beyond capacity, such as architectural and code issues. Savings in this scenario can equate to a further 20%. However, as with the red line, these organisations are also prone to cloud cost creep.
Blue line: A ‘cloud excellence’ approach creates maximum value
Represents an organisation with a well-defined cloud strategy, enjoying optimal performance at predictable cost and the flexibility to scale rapidly.
Such organisations have an end-to-end view of their cloud ecosystems with a clear understanding of efficiency. This holistic approach to cloud management is what we at call ‘Cloud Excellence’.