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FinOps Common Language

Contents

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Course Introduction
1
Introduction
PREVIEW1m 24s
The FinOps LifeCycle
Course Summary
12
Summary
1m 41s

The course is part of this learning path

Optimizing Cloud Costs
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Overview
Difficulty
Intermediate
Duration
1h 6m
Students
91
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Description

As spending on the public cloud is increasing globally, companies are looking for ways to reduce cost and increase efficiency. Financial Operations, or FinOps, is similar to DevOps, which enables companies to accelerate technology delivery. FinOps is a new operating model that maximizes the value of an organization's cloud investment.

In this course, you are going to learn about FinOps Principles and how to build FinOps Teams, as well as the three phases of the FinOps Lifecycle. Specifically, you will learn how to apply FinOps processes and practices to reduce rates and avoid unnecessary cloud costs.

If you have any feedback on this course, please get in touch with us at support@cloudacademy.com.

Learning Objectives

  • Understand what makes the cloud so powerful and why it is changing how businesses operate
  • Understand what makes cloud challenging from a technology, management, and financial perspective
  • Learn about the six FinOps Principles and how to build successful FinOps Teams
  • Learn about FinOps capabilities and how to build a common language within your organization
  • Learn about the anatomy of a cloud bill and how to take advantage of the Basic Cloud Equation
  • Learn about the three phases of the FinOps Lifecycle and how to build successful processes and practices to reduce rates and avoid cost

Intended Audience

This course is for engineers, operations, and Finance people looking to understand how to improve efficiency and reduce cost in the cloud.

Prerequisites

to get the most out of this course,  you should have a foundational understanding of cloud concepts, specifically how compute and storage are provisioned and billed in the cloud. Some familiarity with rate reduction and cost avoidance methods in the cloud would also be helpful but are not essential.

 

Transcript

Everyone the FinOps team interacts with has a different set of motivations, language, and point of view. Even within the FinOps team, each member will have a slightly different set of motivations, language, and views. One of the main responsibilities of the FinOps team is to integrate these and share what is important with everyone to drive collaboration.

When we look across the organization we see different vocabularies being used. There are so-called discipline vocabularies, these are specific to a subject area. For example, Finance will use terms like Weighted Average Cost of Capital or the abbreviation WACC and also Cost of Goods Sold or COGS. Engineering will use phrases like DevOps which stands for Development Operations and lift-and-shift which usually means an as-is migration to a new environment like the cloud. And the business will use acronyms like MVP which means Minimum Viable Product or SaaS which stands for Software as a Service, a subscription-based software license.

FinOps comes with its own vocabulary with more commonly known terms like Usage, Rate, Blended Cost, Reservations, Upfront Charges, but also less known terms like Metrics-Driven Cost Optimization or MDCO for short, and OKRs, which stands for Objectives and Key Results, a goal-setting framework for defining and tracking objectives and outcomes.

And of course, the cloud comes with its own vocabulary as well, which will be vendor-specific. So for example what is a Reserved Instance on Amazon Web Services is called a Committed Use Discount on Google Cloud and simply a Reservation on Azure, which is Microsoft's cloud.

The FinOps team will need to build a lexicon of commonly used terms and educate key stakeholders to eliminate language barriers across the organization. Using a common language enables meaningful communication when the FinOps team is not present as a translator. The key drivers will be a consistent usage of terms in reporting and a unified set of metrics being used across all business areas.

To summarize the FinOps Common Language: People will make assumptions when not familiar with a term which can produce non-optimal results. The FinOps team needs to enable meaningful outcomes by socializing a common vocabulary. And the FinOps team needs to apply their own standard consistently in their reports and metrics.

About the Author
Avatar
Dieter Matzion
Systems Analyst
Students
1722
Courses
2

Dieter Matzion is a member of Intuit’s Technology Finance team supporting the AWS cost optimization program.

Most recently, Dieter was part of Netflix’s AWS capacity team, where he helped develop Netflix’s rhythm and active management of AWS including cluster management and moving workloads to different instance families.

Prior to Netflix, Dieter spent two years at Google working on the Google Cloud offering focused on capacity planning and resource provisioning. At Google he developed demand-planning models and automation tools for capacity management.

Prior to that, Dieter spent seven years at PayPal in different roles ranging from managing databases, network operations, and batch operations, supporting all systems and processes for the corporate functions at a daily volume of $1.2B.

A native of Germany, Dieter has an M.S. in computer science. When not at work, he prioritizes spending time with family and enjoying the outdoors: hiking, camping, horseback riding, and cave exploration.