AzureScan
What is FinOps?
FinOps, a blend of finance and DevOps, is the way of working where IT, finance and management decide on cloud costs together. The goal isn't to spend as little as possible, but to get as much value as possible from every euro that goes to the cloud. The framework is maintained by the FinOps Foundation, part of the Linux Foundation.
The difference with classic IT budgeting: in the cloud, anyone with the right permissions can create costs in a few clicks, and the bill only arrives afterwards. FinOps makes sure those costs are visible, someone owns them, and they are steered on regularly.
The three phases of FinOps
FinOps isn't a one-off project but a cycle of three phases that you go through again and again:
| Phase | The question | In Azure |
|---|---|---|
| Inform | Where does the money go, and why does it change? | Cost analysis by resource, subscription and tag; allocating costs to projects or customers |
| Optimize | Where are we paying for something we don't need (this much of)? | Rightsizing VMs, cleaning up unused resources, reservations, savings plans and Azure Hybrid Benefit |
| Operate | How do we keep it that way? | Budgets and alerts, agreements on tags, a fixed moment to review costs |
Why Azure FinOps matters for SMBs too
In a small or mid-sized business, there is rarely anyone looking at cloud costs full-time. The IT lead or IT partner builds the environment, and the bill goes to accounting. In between, nobody notices that a test VM has been running for a year, or that disks were left behind after a migration. So the bill rises in small steps, each too small to notice on its own. This article covers the eight causes we see most often.
That's exactly why FinOps is worthwhile for smaller organisations: the savings are often found quickly, and a little structure is enough to keep them.
Azure FinOps with the built-in tools
Azure already has quite a lot on board:
- Cost Management → Cost analysis shows your costs by resource, resource group, service or tag, and how they evolve.
- Budgets send an e-mail when costs approach a limit, and anomaly alerts flag an unexpected spike.
- Azure Advisor gives cost recommendations, such as oversized or underused VMs.
- Tags let you allocate costs to a project, department or customer.
- Reservations, savings plans and Azure Hybrid Benefit lower the price of what you do need. Read which discount fits you.
- The Microsoft FinOps toolkit offers reports and templates for larger environments.
Where it goes wrong in practice
The tools are there, but they take time and expertise that SMBs rarely have to spare. Advisor says a VM is too large, but not what the risk of resizing is, who should decide, or whether the saving actually showed up on the bill afterwards. Cost analysis shows that costs rose, but not which change caused it. Without a clear owner and a fixed rhythm, recommendations are left lying.
Azure FinOps in five steps
- Make costs visible. In Cost analysis, look at the top ten resources and the trend over the last three months.
- Appoint an owner. One person, in-house or at your IT partner, who reviews the costs every month.
- Clean up the easy things. Unused disks, snapshots and IP addresses, and VMs running 24/7 when they don't need to. How to find them.
- Lower the price of what remains. Reservations or a savings plan for stable workloads, and Azure Hybrid Benefit for licences you already own.
- Set a budget and a rhythm. A budget alert by e-mail, and a short review between IT and finance every quarter.
FinOps for MSPs
If you manage Azure for several customers, FinOps becomes a service you can offer: each customer gets insight into their own costs, you work out the savings, and the customer decides. Read more about AzureScan for MSPs.