Environment Rate-cards For Effective FinOps

Apr 24, 20244 min read

Updated: May 30, 2024

Any business, no matter how big or small they are, always run on some set operational budget. Nobody has an unlimited credit card. To make the most out of their infrastructure budget, they need to

Build financial visibility.
Optimise resource utilisation.
Formalise accountability for operational expenses on Cloud.

Doing effective FinOps can be overwhelming, especially when you are spoiled for so many options on cloud. However, it's not an impossible task, just needs to follow certain structure and due diligence in planning.

One of the most important factor in FinOps is infra/cloud budgeting for infrastructure, a not so popular but mandatory activity that major every organisation has to process every financial year be it monthly, or quarterly or annual. In-fact , you cannot even start development without having a rough estimate of your infra budget, not to mention its even compulsory when comes to funding, investing etc.

And trust me when I say this, Cloud providers does not make this any easier. If anything, the so called cost calculators makes this even more complicated with the n number of options for each service category. If you are a business running on cloud, you must have encountered this tool at some point of time in your journey.

Some call it Cost Calculator or Pricing Calculator, a web-based tool provided by many cloud providers for calculating the cost of infrastructure resources they provide. For instance, you want to know how much a large compute instance with 60 GB storage will cost, the cloud cost calculators will do that. If you have not used one before here are some links for reference:

Cost or Pricing calculators are undoubtedly powerful tools when it comes to budget estimation in FinOps. However, what I find overwhelming is the wide range of pricing options. AWS EC2 service itself has 14 instance family, each family comprises around 10 instance types, so if I have to calculate price of a compute server I will have to choose from 140 options. It's like a kid in a candy store, spoilt for options. And not to mention such estimation is too technical to be handled by FinOps teams who purely wants to record the budget to be spent by a particular project team.

So we had this situation in one of the previous clients where there were multiple teams with their own set of environments on demand, that they had to get budget approval for from the Finance team. Since it was a startup which was scaling its business , every week there would be new teams onboarding who would need to get approval for every new environment they would spin up. And the infra teams would not be able to make the environments ready unless there was an approval from FinOps. The reason it was necessary was to establish accountability for the opex and avoid any kind of over spending or underutilisation of resources.

So thats when one of the business leads asked me "can you create a rate card for the environments" so that it would be easier to just standardise the rates across board. Initially I was not sure how to address this as there were so many teams with so many environments.

However upon analysing the environments, it was clearer that they were pretty much the same on terms of their specs. So, for instance we can standardise how much compute, storage, db etc resources would be needed lets say for a dev v/s qa v/s prod environments. Once that data was clear creating the rate card was much easier.

To address this challenge, I created a Rate Card which will contain some selected instance types that will be used a the base infra types.

For instance, let's say you have a memory intensive application, so the rate card will offer only memory optimised instance family with T - shirt sized instance types. Same can include network and other services as well. One of my sample rate card looks something like this.

Such rate cards can be easily used by FinOps teams, need not be cloud experts.

Once you create rate cards, budget estimation becomes very efficient and accurate. In-fact you can then have a continuous review of your expense estimation based on exact requirement instead of speculation. This will avoid over or under estimation in FinOps for modern infrastructure.

Here's how my finops budgeting ratecard for one of the cloud providers looks like:

You can access the rate card shown above here.

One common myth about FinOps is that it's a management task, something that can be only done manually in documents. That's not true, most of the factors that impact FinOps greatly such as billing methods(prepaid or postpaid), optimisation, and service types (managed or self managed) can be automated as a part of infrastructure creation so that these practices become default configurations during infrastructure provisioning. FinOps is a continuous process of operation, information and optimisation.

Effective FinOps for modern infrastructure:

Always review your usage and rework the budget.

Utilize support points.

Inform, optimise and operate.

Don’t be alarmed with initial expenses as most subscriptions deduct money few days before the month ends. You can get refunds from the time you stopped the service.

You can access my sample rate card shown above here. (It's a private link, please do send an access request.)

If you like this article, I am sure you will find 10-Factor Infrastructure even more useful. It compiles all these tried and tested methodologies, design patterns & best practices into a complete framework for building secure, scalable and resilient modern infrastructure.