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Aliyun FinOps cost management construction to help enterprises to achieve financial optimization

2025-01-28 Update From: SLTechnology News&Howtos shulou NAV: SLTechnology News&Howtos > IT Information >

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In the past two years, domestic and foreign enterprises have paid more and more attention to the cost and consumption of cloud on the basis of how to achieve R & D efficiency based on the capability characteristics of cloud. In the past, when we talked about cloud native, we always focused on the areas of development concept, architecture, technology and products, but with the widespread use of cloud native technology, more and more enterprises began to pay attention to the governance issues under cloud native. This paper attempts to explore some of the changes brought about by cloud native from the perspective of cost management.

In the cloud native era, FinOps cost management becomes the top priority.

Cloud native architecture is a development concept that maximizes the use of cloud characteristics to design application architecture. In a broad sense, this affects not only the application architecture, but also the change of the financial process of the enterprise.

In 2023, Ni Haifeng, a senior technical expert from Aliyun, presented a group of enterprise cloud data investigated by relevant foreign organizations in a speech entitled "FinOps cost management landing combat" at the cloud conference site. At present, enterprises pay more attention to cost than security, and become the primary work in enterprise cloud.

In recent years, with the wide application of cloud technology, the advanced technology productivity brought by cloud native architecture and technology in conventional definition will help enterprises to reduce costs and increase efficiency. As a result, enterprises have come to the conclusion that the transformation of cloud native architecture will inevitably reduce the unit cost of application deployment for enterprises, but in practice, they will find new problems in the new environment. Most enterprises still fail to give full play to the technological advantages of cloud native architecture, but regard it as an alternative to the traditional model, so that they do not achieve the original intention of enterprise architecture transformation.

While the introduction of cloud native technology brings technology dividend, it may also bring new technology complexity. In the face of the impact brought by the introduction of cloud native architecture, the traditional IT cost management method lacks effective cost insight and cost control means, which is the root cause of IT cost soaring.

The changes brought about by the original era of the cloud are complex. It is also this era that gives practitioners new propositions and thinking.

Cloud Computing reshapes Enterprise Financial Management process

At present, the topic of public discussion on cloud computing is always focused on technology leadership and how to use out-of-the-box cloud products to quickly build application systems. however, few people discuss the great innovation of cloud computing cost in the business model of "use on demand, pay by quantity".

In the past, enterprises need to complete the examination and approval through a lengthy financial process, and then purchase heavy IT assets, but now it has become a delivery model in which enterprises can quickly formulate IT strategies based on market changes. In a sense, without the emergence of clouds, the word "agile" we often hear these days will become commonplace. However, it is precisely because the financial process has changed, resulting in the failure of the original enterprise cost management strategy, all kinds of unreasonable expenditure makes the enterprise cost out of control.

New financial problems brought about by cloud native architecture

With the tighter and tighter coupling between the enterprise IT architecture and the cloud platform, enterprises have moved from the initial Re-hosting to the cloud to the reconfiguration of the Re-platform platform. Based on their own organizational structure, enterprise managers have a growing demand for the distinction between people (users), rights (authority), property (cost) and material (resources), especially in the management complexity brought by a large number of PaaS-level products.

With the wide application of cloud native technology, enterprises have gradually focused on governance from cloud native technology, architecture, products and development concepts. And cost is an important part of governance.

Many domestic enterprises talk about FinOps always focus on how to optimize cloud costs, but the importance of cost amortization has always been ignored by enterprises, while the real cloud FinOps, cost amortization often comes first. In addition, as enterprises use a large number of cloud native PaaS products, the billing problem of these products also increases the difficulty of cost amortization.

While enterprises habitually believe that cloud native technology is bound to bring technology dividends, there may be more thorny technology debt hidden behind it. However, the cost management system based on public cloud IaaS resource management, which is finally established by traditional enterprises after going to the cloud, has once again fallen into a new dilemma in the face of cloud native architecture.

New dilemmas need new technological ideas

FinOps cost management is a field of sustainable development, and its trends and news trends reflect its growing importance. Google search trends show that the number of searches for the "FinOps" keyword on Google Trends increased 410-fold in the four years from 2019 to 2023. Abroad, more than 18000 people have listed their FinOps skills on their LinkedIn resumes.

In the Cloud Native 2023 trend Forecast report released by CNCF, 3 of the 10 hot trends are related to FinOps, namely FinOps, GreenOps and cost reduction. This shows that enterprises are becoming more aware of the management of cloud service expenditure, and are looking for effective tools and methods to control and optimize these expenditures. It is further emphasized that FinOps will occupy an important position in the future technological development.

At the same time, according to a survey released by FinOps, the more companies spend on cloud computing, the more they need to help manage those expenses. This discovery highlights the necessity of FinOps in helping enterprises manage cloud service expenditure effectively, and the concept of FinOps cost management arises at the historic moment.

FinOps cost concept

FinOps is a means of systematic governance put forward by enterprises to deal with the core requirements of cloud financial and resource management. It is a method of applying engineering thinking to financial operation, which emphasizes improving the efficiency and effectiveness of financial operation through automation, data-driven and continuous improvement. Under the cloud native architecture, the core of FinOps cost management is to minimize costs and maximize benefits through accurate measurement, analysis and optimization of cloud services.

Emerging information technologies, such as cloud computing, big data, and artificial intelligence, are leading the third revolution in the financial field. The application of these technologies has promoted the development of financial management to the direction of intelligence. For example, as a new theory and concept of financial management, intelligent finance can provide a new intelligent management model with full process, omni-directional and full function.

FinOps pays attention to differences at home and abroad

In terms of financial sharing, the management methods of domestic and foreign enterprises are also quite different. The pan-Internet industry will give priority to using a simpler way to manage accounts, such as production / non-production differentiation and deploying applications to the corresponding accounts. then allocate resources according to different resource groups, labels and other dimensions to achieve financial allocation. The division of dimensions based on environment is obviously too extensive in many cases. The industry standard solution for such scenarios is to design the account system based on the best practices of "Landing Zone". It is generally recommended to split the corresponding accounts according to the granularity of account sharing, such as cost center, system and other dimensions.

When the platform architecture is relatively weak and there is no overall planning for the infrastructure, the authority will be given to the R & D team, and the R & D team needs to build their own end-to-end networking, security and DevOps. It is also easy to lead to a lot of waste of resources.

Best practices and Architecture of FinOps

The construction of FinOps system is a huge project, which will involve everything from product billing, usage to usage, as well as all aspects of cloud platform IT governance. Under the narrative setting of the cloud, it puts forward new requirements and challenges to the financial team.

They need to understand when the business needs to purchase long-cycle resources in order to obtain lower transaction prices and what rules should be followed for the bill. a series of issues such as reasonable allocation to different cost centers and how to audit the rationality of the current use of resources by the technical team.

Aliyun Excellence Architecture is a service created by Aliyun Open platform Technology Solutions team together with a number of enterprise cloud management and governance experts. The main purpose of this architecture is to help enterprises achieve more efficient and superior cloud service operations.

It is not only a solution in a scenario, but also a best practice for using the cloud. Based on the analysis of security compliance, stability, operation, cost and high performance, Aliyun WA architecture provides a complete set of tools and services to support the construction and implementation of FinOps cost management system, help enterprises achieve more efficient and refined cloud cost management, and improve their competitiveness and profitability.

Ni Haifeng introduced at the speech that Aliyun's advantage is in building a FinOps system, and its coverage should be the most comprehensive in the industry. Based on the cooperation of multiple teams in Aliyun, from platform tools, cloud product development, cost management and delivery service teams to maintain close cooperation, jointly enrich the solutions and best practices precipitated by the enterprise value scenario.

FinOps cost management system covers all product capacity building areas on the cloud, such as cost allocation, budget management, anomaly detection, cost analysis, cost optimization and other common capability areas. In addition, it also supports in-depth cost management of many vertical cloud products, such as elastic computing, network, cloud native container service, and so on.

Based on the concept, tools and processes of Ariyun FinOps cost butler service that helps enterprises to manage costs on the cloud, enterprises can digitally realize enterprise IT cost management and optimization in the process of cloud biochemistry evolution, and become the practitioner and leader of fine management of resources on the cloud.

Financial management: is the basis of FinOps, designed to ensure that corporate spending on the cloud is properly allocated and used. The key to financial management is to ensure that every penny of the business knows where to spend and that every expenditure can bring value to the enterprise.

Cost optimization: this is the core goal of FinOps. By analyzing and evaluating the cost structure on the cloud, organizations can find opportunities for optimization to reduce costs and improve return on investment. For example, through cost management and optimization across multiple clouds, organizations can allocate resources more effectively and avoid repeated purchases and unnecessary expenses.

Platform building: to support effective FinOps practices, organizations need to establish a full-featured platform to collect, analyze, and report financial data on the cloud. This platform not only provides real-time cost and expense data, but also helps teams set budgets, set warning thresholds, and continuously monitor and optimize.

FinOps trend evolution

"Sustainability" is mentioned in the Top Ten Strategic Technology Trends of 2023 released by Garnter at the end of 2022. Sustainability will run through all strategic technology trends in 2023. To this end, organizations need a new sustainable technology framework to improve the energy and material efficiency of IT services, achieve sustainable development through technologies such as traceability, analysis, renewable energy and artificial intelligence (AI), and deploy IT solutions that help customers achieve their sustainability goals.

GreenOps aims to provide high-quality "green" services to achieve maximum satisfaction at minimum environmental cost. And adopt green technology and services to meet the service needs of enterprises, and finally achieve the sustainable development of enterprises. In the future, GreenOps can be seen as a conceptual extension of FinOps.

According to PricewaterhouseCoopers, 60 per cent of Fortune 1000 companies are using or planning to use the cloud to enhance ESG reporting. This shows that for many enterprises, how to achieve business goals while ensuring the sustainability and environmental protection of their cloud services has become an important issue.

GreenOps may be more closely integrated with FinOps in the future. With the increasing attention of enterprises to environmental protection and sustainability issues, the importance of GreenOps will become increasingly prominent. At the same time, by combining GreenOps and FinOps, enterprises can not only effectively control costs, but also achieve more environmentally friendly operations.

FinOps cost management provides a new perspective of financial management for enterprises to help enterprises cope with market changes and achieve sustainable development by improving financial efficiency, reducing operating costs, enhancing inter-departmental cooperation and enhancing enterprise value. Under the background of digital transformation, Aliyun FinOps cost management will become an important trend of enterprise financial management, which is worthy of enterprise attention and practice. And enterprises need to see where every penny is spent, which also puts forward higher demands for cloud manufacturers.

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