Cloud Cost and Efficiency

Tech companies emphasize optimizing cloud spend to increase profitability. Efficiency teams and FinOps practitioners must allocate cloud costs to internal teams to increase accountability and analyze margins to keep spending aligned with the business goals. This requires collecting, metering, and analyzing usage data of infrastructure components in the context of cost and business.

Companies are increasingly adopting a business-centric approach to cloud cost management where finance and engineering teams are highly aligned and speak the same language. This requires good quality usage data which can be attributed to engineering teams and customers. Cost allocation and analysis are particularly challenging with shared resources when multiple teams use the same cloud resource (Kubernetes, AWS, network, etc.). In this case, we must distribute the underlying cloud cost between these consumer teams based on usage and rate cards. For example, when multiple teams utilize the same database, tracking the number of queries (with complexity) and their storage usage allows us to attribute the underlying compute and storage cost to the consumer.

Similarly, we can track network transfer, API calls, and compute usage for cost allocation. Collecting usage is also necessary to calculate Cloud Unit Economics.

Analyzing cloud cost from a usage perspective and expressing it as cost-per-transaction and rate cards bridge the gap between non-technical teams and engineering, placing cloud costs in the perspective of customers, revenue, and growth. This paradigm shift alters how products are priced, features are evaluated, and future architectural decisions are made.

OpenMeter simplifies the collection and attribution of usage data for FinOps and cost allocation use cases so businesses can make informed decisions based on real-time usage data, ultimately driving profitability and maximizing cost efficiency.

OpenMeter is also member of the FinOps FOCUS cost and usage data standardization working group.

Last edited on December 5, 2023