The FinOps Handbook v. 2023

This is a major update to my FinOps Handbook, initially published here in 2019.

Note: This is still a (very) short version of a (very) large article/Sway with details, best practices and scenarios and you will find a few highlights below.

Is FinOps only for Large customers?

Another rhetorical question, but FinOps is, of course, for all customers who are using a Cloud environment.

The potential is obviously bigger for a customer with 1000s of servers etc., but also very complex due to their typical "legacy".

FinOps might even be more suitable for smaller or medium customers without too much "legacy".

As small/medium customers typically lack Cloud/FinOps skills, they will be very dependent on a partner with FinOps skills.

So I hope many of Microsoft's Azure partners read this article!

Challenge: Prove to me that YOUR on-premise DC is "better" than Azure

If you do prove that to me, I will commit to writing a story on this on LinkedIn - or where you want it published.

I know it is easy for me to say when I use a fluffy word like "better", but trust me, I will be openminded and I expect that you are too.

I am confident that Cloud - and Azure - are competitive if you look at the full picture.

And do I have to mention AI?

Is FinOps dead?

I published my first FinOps article almost 6 years ago, January 2, 2018 and 6 years is a very long time in a Cloud world.

However, reading through the "old stuff", I was surprised by how much still made sense today.

Yes, many things have changed since and had to be added to my FinOps Handbook like ...

• Many (!) new Azure regions, adding new options and complexity to pricing
• Lots of new Azure Services, including many new faster and cheaper VM types
• App Service plans (Pv3 and Isolated v2) that you can reserve
• Dedicated host where you can "overcommit" - if you should want that
• Introduction of Azure Savings Plan (ASP) as a supplement to Reserved Instance (RI)

My main argument six years ago was that FinOps is neither a "technical" nor a "cost" thing, but it is both and it is a major change management role to "Make COST Everyone's problem".

To answer my own rhetorical question: NO, FinOps is NOT dead!

It is evident that the FinOps role is NOT perceived as "SEXY", but I will argue that saving money is!

Furthermore, FinOps is perceived as both

• "Complex" with a lot of numbers that are different to find, especially as you need them close to "real-time"
• "Old-fashioned" as you even need to understand licenses for Windows Server, SQL etc. and consider compliance from a license perspective
• "Too technical" for many (finance) people
• "Too little technical" for many (Cloud) people, including most architects

In fact, many are still waiting for a TOOL to "fix" this, but remember, "A fool with a tool is still a fool"!

The challenge is that, while we keep ignoring FinOps, other people will continue to see "Cloud" as expensive.

This is even more critical as the same people are starting to realize that they need to deliver on business requirements for new "AI" capabilities, which they know they likely only can get in a "Cloud".

I (re)publish my FinOps Handbook now with the hope that I can inspire some of my readers to start on the FinOps journey in their own Cloud.

Maybe I just Naive - but let us (re)start the FinOps journey and go save some money!

Start Simple, but Start now!

I recommend to start with the below four simple steps. It may give you 80% of the savings for 20% of the time - or maybe even 90-10.

• All (non-B) VMs with 8+ cores running 24/7 for 1+ year:- Always use AHB (10-50% saving)

• All VMs running 24/7 for 1+ year:- Always use RI (30-70% saving)
• All App Service plans running 24/7 for 1+ year:- Migrate to Pv3 and use RI (30-40% saving)- (Hint: If you are using .NET, consider migrating to .NET Core)
• Estimate minimum yearly Compute (*) usage (across all regions):- Always use ASP (10-50% savings)

You will get all details in the FinOps Handbook but the acronyms are

• AHB = Azure Hybrid Benefit
• RI - Reserved Instance
• ASP = Azure Savings Plans

(*) Compute usage is: Azure VMs, App Service Pv3/Isolated v2 plans, Function Premium Plans, Container instances and Dedicated host

But the Devil is in the Details, and trust me: You get all the details in the FinOps Handbook including the "AHB, RI, ASP Funnel"

Want to hear more, have feedback/suggestions or need help?

As always, I am very interested on your feedback. Please feel free to add a comment to this article, reach out to me ([email protected]).

Last, but not least: If you want to challenge me and prove that your on-premise datacenter is "better" than Azure, please reach out to me ([email protected]).