AWS Re:cap 13: Amazon's finops: Cloud cost lessons from a global e-commerce giant (AMZ308)

Video: https://www.youtube.com/watch?v=-GuZhm4XGxM

Key Lessons from Amazon's Modernization Journey

● Building on AWS Billing and Cost Management Services

● Foundation for FinOps practices

● Amazon operates on AWS, necessitating comprehensive FinOps stance

● Started with custom financial reporting for monthly cloud costs

● Transitioning to AWS data exports, cost and usage reports (CUR), and other AWS billing services

● Moving from monthly/account grain to ARN and hourly grain visualization

● Democratizing cost data across teams (builders, leaders, finance, FinOps)

● Enabling Cost Explorer for self-service cost analysis and real-time decision making

● Deploying organization-wide tagging strategies for better cost controls

● Integrating with AWS features like Compute Optimizer and Cost Optimization Hub

● Shifting from centralized reporting to a distributed model of cost intelligence

● Leveraging AWS Organizations for consistent controls and aggregated tool set

Driving Efficiency Through Business-Aligned Mechanisms

● Challenge: widespread adoption of cost management practices

● Key insight: connect cloud costs to business outcomes at the team level

● Combining granular costs from AWS Cost & Usage Report (CUR) with business metrics teams care about

● Allows visibility into spending and value received per dollar spent

Scaling FinOps Practice Through Intelligent Automation

● Focus on automating processes to scale FinOps efficiently

● Details on specific automation strategies and tools used

● Emphasizing the importance of automation in maintaining and scaling FinOps practices

Integrating Business Context

Driving Adoption Through Cost-Business Outcome Connection

● Key to adoption: connecting costs to business outcomes for teams

● Included accounts and tag-based cost allocation to business context and investment tracking

● Automated return on investment analysis with AWS cost management services

● Simplifying Cost Visibility

● Used AWS Cloud Intelligence Dashboard (CID) for actionable insights and optimization opportunities

● Nested AWS service-specific budget data against actual usage to show budgetary variances

● Enabled finance and operational efficiency teams to address cost reduction initiatives and budget/forecast revisions

● Integrated contextualized business data alongside AWS infrastructure usage

● Created role-specific views for in-depth service analysis by teams

● Real-World Example

● Teams can identify cost spikes, origin accounts, services, and resources

● Visualize business impact alongside metrics like revenue or budget

● Tie cost spikes to individuals or initiatives for immediate action

● Evolving Approach to Efficiency

● Recognized efficiency is not one-size-fits-all

● Measured basic resource utilization metrics (CPU, memory, network throughput)

● Different workloads required different efficiency approaches

● Built central efficiency mechanisms

● Tracked business-specific efficiency

● Monitored resource utilization against centrally agreed-upon ideals

● Achieved significant gains in efficiency and cost reduction for applicable lines of business

Integrating Business Context (Continued)

Credit Score Metric

● Created a metric called the credit score to measure resource efficiency across various services

● Iterative approach to hone central baseline

● Evaluated alignment with central efficiency campaigns (e.g., capacity utilization, storage class optimization)

● Correlated with business data (revenue, budget) to measure FinOps maturity across lines of business

● Enabled teams to optimize and save significant amounts of money

● Weekly Efficiency Score

● Teams received a weekly efficiency score with cost recommendations

● Recommendations could be grouped by technology category (storage, compute, generative AI, database, network)

● Recommendations associated with accounts, teams, and owners

● All stakeholders (finance teams, leadership, technology owners, operational efficiency teams) could view data through their respective lenses

● Automation for Scaling FinOps Practices

● True cloud financial management is a continuous intelligent cycle

● Integrated AWS services with automated workflows to transform manual processes into self-improving systems

● Journey towards automating FinOps started with providing better visibility into cloud costs

● Continuous iteration to create systems with deeper insights into infrastructure spending patterns

● Each improvement feeds back into the learning cycle, enhancing capabilities towards intelligent cloud financial management

● Effective FinOps automation requires comprehensive usage of trends, budget variance, and capacity requirements

Scaling FinOps Practice Through Intelligent Automation

Notifications and Automated Responses

● Teams receive notifications of optimization opportunities through preferred channels

● For well-understood scenarios, teams can define policies and thresholds that trigger automated responses

● Balance between automation and oversight is crucial for building trust and driving adoption

● Building Trust Through Transparency

● Scaling FinOps requires consistent transparency

● Every action (automated or manual) must be logged and tracked in detail

● Teams need to see exactly what's happening with their infrastructure costs and why

● Transparency-first approach is crucial for adoption of automation and planning capabilities

● Combining Human Insight with Automated Analysis

● Particularly impactful in retail

● Start FinOps automation journey with AWS services as the foundation

● Focus first on gaining visibility into costs

● Gradually automate well-understood processes (e.g., financial planning, OP1 cycle, planning, capacity management)

● As trust is built through transparency and results, expand the scope and sophistication of automation

● Goal is not to remove humans, but to enhance their capabilities with automation

Building Your Own FinOps Roadmap

Solid Foundation

● Start with custom tools, mechanisms, and processes

● AWS billing and cost management services provide better visibility than custom solutions

● AWS Cost and Usage Report offers granular data for fine-grain cost control

● Cost Explorer provides analysis capabilities directly to teams

● AWS Organizations enables governance at massive scale

● Connecting Business Outcomes to Cloud Costs

● Real transformation occurs when business outcomes are connected to cloud costs

● Understanding cost attribution to revenue is more actionable than just knowing spend

● AWS Cost Intelligence Dashboards show team-level value and metrics aligned with goals

● Automation for Scale and Efficiency

● Move from monthly reviews to daily optimization actions

● Intelligent systems detect anomalies, recommend optimization, and implement improvements automatically

● Teams focus on strategic decisions while automation handles routine tasks

● Operating at scale with automation