Page 9 of Umbrella Blog

In our first blog post, we introduced the concept of cloud unit economics—a system to measure cost and usage metrics. It helps maximize cloud value for better outcomes per dollar spent. We reviewed what cloud unit economics is, why it’s crucial to FinOps success, and how it enables organizations to unlock the full business value potential of cloud computing. To quickly recap, cloud unit economics provides an objective measure of cloud-based SaaS development (e.g., cost to produce) and delivery costs (e.g., cost to serve) on a per-unit basis, directly supporting every FinOps principle, and depends on key interactions across all other FinOps domains. Cloud practitioners seeking to balance cost optimization and value delivery must understand cloud economics and embrace this FinOps capability.  In this blog post, we will take a deep dive into the benefits of cloud unit economics, how to get started, and discuss the FinOps Foundation’s cloud unit economics maturity model. (Some of the information in this blog series has been adapted from Unit Economics Working Group by FinOps Foundation under the Attribution 4.0 International (CC BY 4.0) license.) What are the benefits of cloud unit economics? Unit economics and the measurement of unit costs are important elements of FinOps that enable enterprises to make informed, data-driven decisions about their cloud investments. Cloud unit economics is a method for maximizing value that allows you to: Focus on efficiency and value instead of total cost Communicate the cost and value of all your cloud activities Benchmark how well you're performing vs. your FinOps goals and the market Identify areas for improvement Establish efficiency targets Continuously optimize to maximize return on investment With cloud unit economics metrics, multiple stakeholders can engage in meaningful discussions about cloud investments, moving conversations from absolute spend to business value achieved per unit of cloud spend, enabling inter-departmental collaboration essential to FinOps success.  Additionally, cloud unit economics helps organizations quantify the impact of cloud spend on business performance, explain engineering contribution to gross margins, improve profitability analysis and forecasting, support data-driven pricing decisions, build cost optimization plans, and increase profit margins. Cloud unit economics is critical to understanding the connection between current business demand and cloud costs, how predicted changes in business demand will impact future cloud costs, and what future cloud costs should be if waste is minimized. Organizations that can successfully measure and integrate cloud unit economics into their FinOps practice can gain insights that will help them maximize the business advantage they obtain in the cloud. How to get started with cloud unit economics Cloud unit economics metrics don’t have to be about revenue—which may be challenging for many organizations due to their business type or maturity level. By measuring unit costs, organizations can quickly build a common language between stakeholders that helps ensure decisions are made quickly based on data-driven insights rather than guesswork or intuition.  You should start discussing cloud unit economics at the very beginning of the FinOps Journey—it is as important as it is complex to implement. To get started: Identify your first unit cost metric/s and build a unit cost prototype—cost per customer or tenant is a good metric to start with. Create a systematic way (e.g., automation) to collect and process the data from existing data sources including cloud bills, logs, data warehouses, and APM platforms. Share insights to build support and encourage unit cost integration in your FinOps activities. Make sure the FinOps team is responsible for maintaining a repository of cloud unit economics metrics and articulating their business value The FinOps Foundation's cloud unit economics maturity model can serve as a guide to planning your next steps, and achieving better adoption and use of cloud unit economics in your FinOps practice. Adapted Cloud Unit Economics maturity model by FinOps Foundation When initially adopting cloud unit economics, choose metrics that are supported by existing data sources and simplify unit cost models. Keep in mind, unit metrics should not be static, but should evolve to reflect business objectives and insights gained. In later stages, you may want to add new data sources, modify financial inputs, or add new unit metrics. The most important thing to do once you have your first metric/s is to incorporate unit costs into your FinOps activities: Make strategic decisions and plan optimization activities based on unit costs—rather than total costs Calculate unit forecasts and budgets based on unit costs Leverage unit metrics in usage and cost conversations with engineers Communicate value using unit metrics and build a culture of FinOps Cloud unit economics metrics link cloud spending to business value, allowing stakeholder groups to make informed decisions about how to use the cloud most effectively. Discussions about cloud unit economics should begin as soon as FinOps stakeholders are engaged. Delaying this activity usually results in higher cloud costs, decreased team motivation, and slower FinOps culture development. In the final part of this three-part series, we will discuss best practices for implementing cloud unit economics. Change the economics of your cloud with Umbrella With certified FinOps platforms like Umbrella, you can establish and mature FinOps capabilities faster. Umbrella is the only FinOps platform purpose-built to measure and drive success in cloud financial management, giving organizations complete visibility into KPIs and baselines, advanced reporting capabilities, and savings recommendations to help control cloud waste and improve cloud unit economics. Umbrella helps FinOps teams quantify the cloud’s role in financial performance, forecast profitability, and optimize their unit costs to maximize their profits. Learn more or contact us to start a conversation.

The cloud’s elasticity—the ability to scale resources up and down in response to changes in demand—as well as variable cost structures offer significant advantages, enabling enterprises to move from rigid capex models to elastic opex models where they pay for what they provision, with engineers in control and focused on innovation, becoming true business accelerators. But this benefit is also the cloud’s Achilles heel, because when engineers focus on speed and innovation, cloud bills soar, becoming one of the most expensive cost centers for modern enterprises. This creates financial and operational challenges that require the creation of systems to measure the variable costs and usage metrics associated with dynamic infrastructure changes. In this blog post (the first of a three-part series on cloud unit economics) we’ll introduce the concept of cloud unit economics as a system to objectively measure dynamic cost and usage metrics, and continuously maximize cloud value to deliver more outcomes per each dollar spent. Understanding cloud economics and embracing this FinOps capability is essential for cloud practitioners aiming to balance cost optimization and value delivery. By monitoring key unit economics metrics and implementing unit-metric-driven cost optimization strategies, businesses can unlock the full potential of cloud services while maintaining financial efficiency. (Some of the information in this blog series has been adapted from the Unit Economics Working Group by FinOps Foundation under the Attribution 4.0 International (CC BY 4.0) license.)   What is cloud unit economics? Cloud unit economics and the measurement of unit costs is an important part of FinOps that enables enterprises to make informed decisions about their cloud investments. It’s the specific application of unit economics—direct revenues/costs measured on a per-unit basis—to cloud financial operations, which directly supports every FinOps principle and depends on key interactions across all other FinOps domains. It allows you to: Communicate the cost and value of everything your organization does in the cloud Benchmark how well you're performing versus your FinOps goals and peers Continuously optimize to deliver more value Unit economics metrics provide an objective measure of cloud-based SaaS development (e.g., cost to produce) and delivery costs (e.g., cost to serve). By understanding the economic principles underpinning cloud services, organizations can create cost-effective strategies that optimize their bottom line while at the same time leveraging cloud-based technologies to improve efficiencies and increase value for customers.   Cloud unit economics are crucial to FinOps success By using CUE metrics, multiple stakeholders can engage in meaningful discussions about cloud investments, quantify the impact of cloud spend on business performance, and make better product and pricing decisions. Cloud unit economics move conversations from absolute spend to business value achieved per unit of cloud spend, enabling inter-departmental collaboration essential to FinOps success.  Cloud economics is a powerful tool that can be used to maximize the value of cloud computing and optimize an organization’s use of the cloud. By measuring unit costs, organizations can maximize profitability and value delivery while remaining within their budget constraints. Here’s why you should start measuring unit costs as early as possible: With the cloud, you’re buying time, not things. It is therefore crucial that you consider how to maximize your cloud technology investments by making data-informed decisions. The cloud relies on a variable cost, elastic opex model where enterprises pay for what they provision—with engineers in control, not procurement. To maximize your cloud investment, you must understand the TCO of the cloud (beyond compute, storage, and db) including shared costs and secondary services. Cloud pricing models have a dramatic impact on cloud unit economics. RI/SP and other commitment-based discounts can completely alter your cloud economics. Forecasting and budget management require a thorough understanding of cloud unit economics, not only for expected costs, but also for supporting future demand. It’s better to make strategic decisions and optimize costs based on unit costs rather than total costs. Building FinOps culture and communicating cloud costs and value with engineers is best accomplished with unit metrics. It’s important to note that data analysis and cost allocation are fundamental FinOps capabilities for effective unit cost measurement. You must establish ‌granular cost/usage visibility and allocation before you can start measuring unit costs. Cloud unit economics unlocks the value of cloud computing Cloud economics is a powerful concept in FinOps that can help organizations unlock the full business potential of cloud computing.  By leveraging cloud unit economics metrics, businesses can realize:  Lower cloud costs Motivate cloud stakeholders Quantify engineering contribution to gross margins Improve profitability analysis and forecasting Build better cost optimization plans Increase profit margins Moreover, having a common language between stakeholders helps ensure decisions are made quickly based on data-driven insights rather than guesswork or intuition. This is especially beneficial when trying to manage costs while still maximizing profits from new sources of revenue within budget constraints. Cloud unit economics metrics can help you focus on efficiency and value, enabling you to establish efficiency targets and identify areas for improvement. Despite its benefits, CUE is elusive for many FinOps teams. According to our market research, 70% of companies want to measure unit economics metrics but are not there yet. Where does your organization stand? In our next blog post in the series, we will take a deep dive into why cloud unit economics matters, its benefits, and how to get started, as well as FinOps Foundation maturity models.   Improve your cloud unit economics with Umbrella Certified FinOps platforms, like Umbrella, can help you establish and mature key FinOps capabilities faster. Umbrella is the only FinOps platform purpose-built to measure and drive success in cloud financial management, giving organizations complete visibility into KPIs and baselines, advanced reporting capabilities, and savings recommendations to help control cloud waste and improve cloud unit economics. Umbrella helps FinOps teams quantify the cloud’s role in financial performance, forecast profitability, and optimize their unit costs to maximize their profits. Learn more or contact us to start a conversation.

Amazon RDS or Relational Database Service is a collection of managed services offered by Amazon Web Services that simplify the processing of setting up, operating, and scaling relational databases on the AWS cloud. It is a fully managed service that provides highly scalable, cost-effective, and efficient database deployment. Features of AWS RDS Some features of Amazon Relational Database Service are: Fully Managed: Amazon RDS automates all the database operational tasks such as database setup, resource provisioning, automated backups, etc. Thus freeing up time for your development team to focus on product development. High Availability: Amazon RDS provides options for multi-region deployments, failover support, fault tolerance and read replicas for better performance. Security: RDS supports the functionality of data encryption in transit and at rest. It runs your database instances in a Virtual Private Cloud (VPC) based on AWS’s state-of-the-art VPC service. Scalability: Amazon RDS supports both vertical and horizontal scaling. Vertical scaling is suitable if you can’t change your application and database connectivity configuration. Horizontal scaling increases performance by extending the database operations to additional nodes. You can choose this option if you need to scale beyond the capacity of a single DB instance. Supports Multiple Database Engines: AWS RDS supports various popular database engines — Amazon Aurora with MySQL compatibility, Amazon Aurora with PostgreSQL compatibility, MySQL, MariaDB, PostgreSQL, Oracle, and SQL Server — and deploy on-premises with Amazon RDS on AWS Outposts. Backup and Restoration: Amazon RDS provides automatic backup and restoration capabilities and supports emergency database rollback. Monitoring Capabilities: AWS RDS provides seamless integration with AWS Cloud Watch which provides state-of-the-art monitoring and analysis capabilities. Managed database (RDS) vs. database self-management: When to choose which approach? Deciding between using a managed database or managing a database yourself hinges on several considerations, including infrastructure needs, budget, time, and expertise of your development team. At first glance, it might seem that a self-managed database is the most cost-effective way to go, but in the majority of cases, it is not true. It takes a huge amount of time and manpower to manage a scalable database that is truly cost-effective and efficient. Therefore it is often wise to let professionals from companies like Umbrella do it for you. Umbrella provides managed RDS service which is highly scalable and cost-effective. Moreover, Umbrella's cost-saving recommendations cover RDS. Thus your development team can focus on product development rather than spending a massive amount of time managing the databases.     Both Managed and Self-managed databases have their pros and cons and the decision should be based on them: Pros of using Managed RDS Fully Managed: A managed RDS is a fully managed service that is very easy to operate and use. Monitoring and Analysis: Managed RDS comes with native built-in monitoring and analysis tools such as AWS Cloud Watch. These tools help derive useful insights from the system that can be used to improve the performance further. Scalability: A managed RDS instance provides vertical and horizontal scaling capabilities that can be invoked automatically or manually as per our requirements. High Availability: Managed RDS provide Multi-Availability Zones (multi-AZ) deployments across regions where the database instance are replicated across availability zones. This provides better fault tolerance and performance.  Native Integrations: A managed RDS instance provides native integrations with other useful tools and services provided by AWS. Backup and Storage: Automated data backups, storage, and restoration facilities are provided. Cons of using Managed RDS Configuration Restrictions: A fully managed RDS is not completely customizable and has many restrictions. Cost: A managed RDS is often more expensive than a self-hosted database, especially when the database size and number of instances grows. That’s why often it is a good idea to let domain experts specializing in native tools from companies like Andot handle the database management for you. Vendor Lock-In: Managed RDS has vendor lock-in i.e. migrating from such a database to another database is often very complicated and costly, as you are charged based on the usage. Pros of using Self-Managed Databases No Configuration Restrictions: A self-managed database provides you full control of your database configurations. Setup and Version Control: Self-managed databases provide setup and version control flexibility. Cost-efficiency: Self-managed databases are often much more cost-effective than a managed RDS. No Vendor Lock-In: Self-managed databases have no vendor lock-in so it’s easier to migrate across databases and hosting providers. Cons of using Self-Managed Databases Scalability: In a self-managed database you have to handle all scalability operations such as sharding and replication on your own. Operational Overhead: Setting up data backups, firewalls, and security rules has to be done and managed by your dev team. Data Security: Each and every aspect of database security i.e. securing the database instances, setting up access control, and encryptions at different stages have to be set up and managed by you. Monitoring and Analytics: In a self-managed database you have to set up your own monitoring and analytics tools. Cost Overhead: If your database becomes too big and your development team doesn’t have enough experience managing such a vast amount of data you might need to spend a large amount of money on hiring more senior engineers. This increase in human capital expenses might end up costing you a large amount of money. To summarize, managed RDS should be used in the following scenarios: When you lack in-house expertise to manage a highly scalable database. When you want to reduce the operational overhead of your development team. When you need a database with good performance and high availability without doing too much manual intervention. When you want to avoid setting up custom monitoring and analytics tools and prefer the integrated tooling a managed database system comes with. Whereas, you should manage your database yourself in the following scenarios: When you have in-house expertise to manage databases at scale. When you want to reduce your database costs. When you need some custom database configurations that are not provided by a managed database provider. When you are willing to assign dedicated resources to set up, update, and maintain your database infrastructure.

Transform your approach to cloud cost management with thisAI-driven tool that delivers instant, actionable insights, simplifying complex pricing and identifying hidden expenses for more effective resource allocation.

Managing cloud costs has become a must for FinOps-focused businesses. Gotta keep a close eye on those expenses! So, what is the best way to do it? Find a platform that can help you get cost visibility and catch any cloud costs anomalies before they turn into a money waste! With tons of FinOps tools, how do you figure out which one suits your needs? And what exactly should you be looking at? We get it! There’s much to consider when picking the best platform to get those cloud cost insights. Alright, let's dive into what makes Umbrella stand out and check out the pros and cons of other FinOps tools. What makes Umbrella the best FinOps tool?  First off, we’re a leading company specializing in real-time analytics and automated anomaly detection. Our AI platform detects and resolves issues preemptively, empowering businesses to optimize performance and make data-driven decisions. What makes us unique?  Focus: We've got you covered with support for AWS, Azure, and GCP. One tool to handle all your FinOps needs. Data: Data gets updated once the billing invoice is refreshed, and we keep at least 12 months of historical data stored. K8s: Visualize costs at different levels: namespace, cluster, node, pod stack, and by object labels. What makes our features similar to our competitors better? Visibility: Top-notch (according to up-to-date info), with multi-cloud capabilities and shared costs. Recommendations: Over 40 types of cost-reducing recommendations (over 60 types for AWS!) with remediation instructions through CLI and AWS Console.  API: Easy to use and operationalize (many customers consume our data through API). MSP Compatibility: Our MSP-ready solution has multitenancy, customer invoicing, and discount management rules.  That's what sets us apart! But hey, who else is out there in this space? Let's find out! FinOps Tool Alternatives CloudZero:  Background: A cloud platform offering solutions like cloud cost monitoring, optimization, and insight reporting for businesses. Headquarters: Boston, Massachusetts  Est. Employees: 100-250 Funding: $45M Data by Owler NetApp Spot CloudCheckr CMx:  Background: CloudCheckr is a cloud management platform offering cost optimization, activity monitoring, and compliance solutions for businesses. Headquarters: Rochester, New York Est. Employees: 100-250 Funding: $67.4M Data by Owler VMware CloudHealth:  Background: A cloud platform that offers solutions such as financial management and compliance for businesses. Headquarters: Boston, Massachusetts Est. Employees: 250-500 Funding: $85.8M Data by Owler What are the pros and cons of these FinOps tools?  CloudZero Pros Automation: CloudZero automates cost tracking across AWS, Azure, and Google Cloud. Cross-account support: Can analyze costs for individual accounts or across all accounts in one view Cons Limited feature set: CloudZero doesn't offer as many features as the other services, such as forecasting and budgeting capabilities. Area of specialization: Exclusively AWS, K8s, and Snowflake Looking for a tool that also specializes in MSP support?   NetApp Spot CloudCheckr CMx Pros Spot, a highly regarded and unique solution, is becoming increasingly integrated.  Can control cloud costs in tandem with usage and performance. Cons Customers may be frustrated with the pre-NetApp version of the solution Limited scope: It is focused mainly on cost optimization rather than broader cloud management activities. VMware CloudHealth Pros Best offering for VMware-based public clouds and organizations transitioning to cloud from on-prem VMware. Provides a comprehensive view of the “cloud economic model” that allows users to understand their cloud resources and optimize costs. Cons The API presents multiple, fragmented, and restricted aspects. Customer success and services often come with additional, undisclosed costs. Final Thoughts on Our FinOps Tools Competitive Analysis So, what did we learn? The cloud costs management platform battlefield has some serious competition going on! These six platforms help their customers get some visibility and understand their cloud costs in a way that wouldn't be possible without them. BUT  Umbrella cost-effectively does all of this, with user-friendly APIs and support on multiple cloud computing platforms. We're the game-changer that elevates your cloud cost monitoring to a new level. So even though the battlefield is fierce, there’s only one victor, and that’s us! Learn more.

AWS DynamoDB is a fully managed NoSQL database provided by Amazon Web Services. It is a fast and flexible database service which has been built for scale. What are the features of DynamoDB? Some features of DynamoDB are: Flexible Schema: DynamoDB is a NoSQL database. It provides a flexible schema which supports both document and key-value data models. Therefore each row can have any number of columns at any point in time. Scalability: Amazon DynamoDB is highly scalable. It has impeccable horizontal scaling capabilities that can handle more than 10 trillion requests per day. Performance: DynamoDB provides high throughput and low latency performance, which results in a millisecond response time for database operations and can manage up to 20 million requests per second. Security: DynamoDB encrypts the data at rest and supports encryption in transit. Its encryption capabilities along with the IAM capabilities of AWS provide state-of-the-art security. Availability: AWS DynamoDB provides guaranteed reliability and industry-standard availability with a Service Level Agreement of 99.999% availability. Backup and Restoration: DynamoDB provides automatic backup and restoration capabilities and supports emergency database rollback. Cost Optimization: Amazon DynamoDB is a fully managed database that scales up and down automatically depending on your requirements. Integration with AWS Ecosystem: AWS DynamoDB provides seamless integration with other AWS services that can be used for data analytics, extracting insights and monitoring the system.  DynamoDB — Best Practices to maximize scale and performance Provisioned Capacity: Increase the floor of your autoscaling provision capacity beforehand to what you expect your peak traffic would be in scenarios where you are expecting a huge surge of traffic such as during the Black Friday Sale, Prime Day or Super Bowl. You can drop it down to the normal provision capacity when the high-traffic event is over. This ensures that the burst bucket capacity and adaptive scaling kick in and everything runs smoothly even with a massive surge in traffic.  Availability: If you want 5 nines availability (99.999%) in DynamoDB then enable Global Tables in your DynamoDB service which provides you with multi-region data replication. Providing 5 nines availability in this scenario is an SLA guarantee from AWS. A single region DynamoDB setup only provides 4 nines availability. Handling Aggregation Queries: Aggregation queries are complicated to deal with in a NoSQL scenario. DynamoDB streams can be used in sync with Lambda functions to compute this data in advance and write to an item in a table. This preserves valuable resources and the user is able to retrieve data instantly. This method can be used for all types of data change events like writes, updates, deletes etc. The data change event hits a DynamoDB stream which in turn triggers a Lambda function that computes the result. Serverless Computing Lambda Execution Timing: DynamoDB works along with AWS’s native Lambda functions to provide a serverless infrastructure. However, we need to keep in mind that the iterator age in a Lambda function is relatively low and manageable. If it is increasing, it should be in bursts and not via a steady increasing activity, if the Lambda function is too heavy and the work being done inside it is very time-consuming, it will result in your Lambda function falling behind your DynamoDB streams. This will cause the database to run out of stream buffer which eventually results in data loss at the edge of the streams. Policy Management: DynamoDB works in sync with AWS Identity and Access Management IAM functionality that provides you with fine-grained control over your access management. Typically the Principleof Least Privilege should be used — which states that a user or entity should only have access to the specific data, resources and applications that are needed to complete the required task. Fine-grained data scan policies can also be set in DynamoDB that control the database querying capabilities of an individual, thus creating a scenario where a user who should not have access to some data would not be able to extract it from the database. Global Secondary Indexes: GSIs can be used for cost optimization in scenarios where an application needs to perform many queries using a variety of different attributes as query criteria. Queries can be issued against these secondary indexes instead of running a full table scan. This approach results in drastic cost reduction. Provisioned throughput considerations for GSIs: In order to avoid potential throttling, the provisioned write capacity for a GSI should be equal to or greater than the write capacity of the base table. This is due to the fact that updates in the database would need to be written in both the base table and the Global Secondary Index. Provisioned Capacity with Auto Scaling: Generally, you should use provisioned when you have the bandwidth to understand your traffic patterns and are comfortable changing the capacity via the API. Auto Scaling should only be used in the following scenarios: When the traffic is predictable and steady When you can slowly ramp up batch/bulk loading jobs When pre-defined jobs can be scheduled where capacity can be pre-owned. Using DynamoDB Accelerator (DAX): Amazon DAX is a fully managed, high-availability cache for Amazon DynamoDB which provides 10x performance improvement. DAX should be used in scenarios where you need low-latency reads. For instance, DAX can provide performance improvement from milliseconds to microseconds even in a system that is processing millions of requests per second. Increasing Throughput: Implement read and write sharding for situations where you need to increase your throughput. The process of sharding involves splitting your data into multiple partitions and distributing the workload across them. Sharding is a very common and highly effective DBMS functionality. Batching: In scenarios where it is possible to read or write multiple items at once consider using batch operations as it significantly reduces the number of requests made to the database thus optimizing the cost and performance. DynamoDB provides BatchWriteItem and BatchGetItem operations for implementing this strategy. Monitoring and Optimization: It is a good practice to monitor and analyze your DynamoDB metrics. By doing this you can understand the performance of the system better and identify performance bottlenecks and optimize them. AWS DynamoDB provides seamless integration with AWS Cloud Watch, which is a monitoring and management system for AWS resources. Using this approach you can periodically optimize your queries by leveraging efficient access patterns. Monitoring the cost of DynamoDB is very important as it can directly impact your organization’s cloud budget. This is essential in order to esure that you are staying within the budget constraints and all the cost spikes are kept in check. Umbrella’s Cloud Cost Management capabilities can help you to effectively monitor the cost of your DynamoDB instances. Umbrella provides you full visibility into your cloud environment which helps in visualization, optimization and monitoring your DynamoDB usage. The tools provided by Umbrella help in ensuring that the DynamoDB instances are not idle and both your allocation and usage are in sync. Periodic Schema Optimization: Periodically the database schema should be reviewed and optimized. The required access patterns for an application change over time and to maintain the efficiency of the system you should optimize your schema and access patterns, this includes — restructuring database tables, modifying indexes etc. System diagram of DynamoDB being used in a serverless setup with AWS Lambda, Amplify and Cognito.

It's never been a better time to be a Managed Service Provider (MSP). Why? Small and medium businesses (SMBs) use cloud-based services for their operations. Eighty-eight percent say they currently use an MSP or are considering one. But many obstacles remain even if SMBs are in high demand for MSPs. They need to keep their profits and revenue growing, focusing on cloud unit economics, customer pricing strategies, and efficient operations. To be the go-to choice for cloud services for SMBs, MSPs must meet customer needs in cloud migrations and financial management. Let's check out how FinOps contribute to successful cloud management and how MSPs can help with this goal.    Why FinOps so important for modern organizations FinOps is a practice that combines data, organization, and culture to help companies manage and optimize their cloud spend. Furthermore, it brings a holistic approach to cloud financial management and helps organizations maximize their ROI in cloud technologies and services by enabling teams to collaborate on data-driven spending decisions. The relationship between MSPs and FinOps As cloud finance and operations experts, MSPs can help customers optimize cloud costs, standardize operations, and make informed business decisions during their cloud journey. What does that mean? MSPs must be ready to offer FinOps services to customers who wanna level up their cloud financial management game. In a super competitive cloud services market, managed FinOps allows MSPs to stand out and build customer trust. What you need to know for FinOps success for you and your customers Picking the right partner solution is key to nailing your FinOps game, no doubt about it.  Since FinOps is a new approach to cloud management, limited solutions are aligned with its phases and capabilities, despite a tooling landscape with over 100 vendors. Key tool categories to look for when selecting a cloud finance solution When evaluating FinOps platforms, ensure they are designed specifically to deliver managed services. Make sure the FinOps platforms you're considering check all the boxes on this list: Connect to major cloud service providers (AWS, Azure, and Google Cloud) to monitor and manage spend in complex multi-cloud environments. Integration to combine all cloud spending into a single platform is crucial for providing complete multi-cloud visibility and optimizing resources. A FinOps platform to help you successfully implement a robust tagging strategy for every customer and accurately allocate 100% of their costs across all accounts and environments. Automated monitoring for cost anomalies. Cloud cost anomalies are unexpected variations in cloud spending that exceed historical patterns. Assess how effectively the platform enables waste reduction. It should automatically identify and tailor waste reduction recommendations for each customer, including idle resources, rightsizing, and commitment utilization. FYI, Umbrella checks all these boxes and then some! Meeting these requirements is integral to FinOps and accelerates cloud-based business value. Understanding where costs are incurred, who generates them, and how they contribute value is key to achieving this goal. Improving margins and customer experiences To make the most of your margins, MSPs must accurately and efficiently invoice customers using a clear pricing strategy. For many MSPs, rebilling can be a real-time suck and eat into already low margins. It gets even trickier with the mixed and unmixed rates from cloud providers, which leads to monthly invoice explanations to clients. Flexible billing solutions for MSPs to embrace Allocate usage and costs to customers. Block out margins and bill customers with adjusted rates Easily add any billing rule and/or credit type Add charges for support and value-added professional services Control usage of high-volume discounts, reallocate SP/RI, and manage credits The importance of real-time visibility into cloud costs Additionally, Managed Service Providers (MSPs) need complete visibility into their usage, costs, and margins. Gain a comprehensive view of customer costs, margins, and usage across the portfolio. Access a detailed billing history with a breakdown of each customer's margin to the Service Provider (SP) and Reserved Instance (RI) level. Justify invoices by analyzing bills from both the partner and customer perspectives. Easily switch between cost views with and without margins. MSPs go further with FinOps practices MSPs who prioritize FinOps make systems more appealing to customers. Why? It demonstrates your commitment as a partner who helps them save money and time in cloud management. Plus, it helps you become a fierce competitor among other MSPs. Remember to find a vendor to help optimize cloud spending while aligning FinOps, DevOps, and finance teams—without adding operational complexity or burdening management. (Hey, that's us!)

The public cloud market is expected to grow significantly in 2023, and it's no surprise. Gartner forecasts that end-user spending on public cloud services will rise by 21.7% to a total of $597.3 billion in 2023, up from $491 billion in 2022!  That's why in June 2023, we launched our Umbrella 2023 State of Cloud Cost survey to explore the impact of mature FinOps platforms on cloud spend control, time to detect cost anomalies, realized cost savings, easiest-to-use optimizations, and their influence on overall cost savings. In this recap, we'll give you a quick snapshot of what to expect in our report. But we really encourage you to check out our in-depth report or a detailed review for a deeper dive. Top challenges in cloud Making smart decisions on cloud usage and costs relies solely on the ability to extract detailed data. So what are the biggest obstacles the market is currently facing when it comes to getting this crucial information? Let's take a look at the top three!   True Visibility: Our reporting found that having clear visibility into cloud usage becomes a leading issue for our customers. This includes tracking resource utilization, monitoring costs, and optimizing cloud services.  Complex cloud pricing: Dealing with complex, proprietary billing data and different pricing models from providers can make it even trickier to normalize data and reconcile costs.  Complex multi-cloud environments: Take the two big challenges of true visibility and complex cloud pricing, mash them up, and what do you get? Complex multi-cloud environments. Basically, the word "complexity" shows up way too often when we're talking about cloud cost! Cloud waste stats: In our survey, 67% said less than a third of their cloud spending is wasted, up from 56% last year, showing improved FinOps adoption and growing awareness of cloud waste which is good news! The bad news? 20% of respondents remain unfamiliar with the cloud waste they possess. This highlights the need for efforts to address this issue! Learn more on cloud waste costs. Cloud costs are on the rise, but less so for Umbrella customers Organizations aspire to effectively manage cloud expenditure, yet struggle to achieve this goal. That's why FinOps is such a life-saver when it comes to cloud costs, companies maximize cloud investments, achieving more with fewer resources. Almost half of Umbrella's customers increased cloud spending by over 10% in the past year. But the best part? Over 45% reduced cloud spending through cost optimization, scaling adoption at the same or lower cost with Umbrella! And the savings keep coming: Over 60% of customers saved more than 5% of the annual cloud spend through cost optimizations in the last 12 months with us. Additionally, over 40% saved more than 10%, and over 20% saved more than 20%. See more of our cloud saving stats in our report! 💰   Final thoughts:  And that's your preview of our 2023 State of Cloud Cost Survey Report. We covered multiple aspects of cloud spending by using our general market survey and our own data findings.  Notable standouts include: The rise of third-party solutions  The increasing challenge of true visibility into cloud costs Cloud spending and savings are more frequent with Umbrella customers.  

The public cloud market is expected to grow significantly in 2023, and it's no surprise. Gartner forecasts that end-user spending on public cloud services will rise by 21.7% to a total of $597.3 billion in 2023, up from $491 billion in 2022!  That's why in June 2023, we launched our Umbrella 2023 State of Cloud Cost survey to explore the impact of mature FinOps platforms on cloud spend control, time to detect cost anomalies, realized cost savings, easiest-to-use optimizations, and their influence on overall cost savings. In this recap, we'll give you a quick snapshot of what to expect in our report. But we really encourage you to check out our in-depth report for a deeper dive. Trust me, you'll get loads more insights on cloud costs than this blog could ever give you! Top challenges in cloud Making smart decisions on cloud usage and costs relies solely on the ability to extract detailed data. So what are the biggest obstacles the market is currently facing when it comes to getting this crucial information? Let's take a look at the top three! True Visibility: Our reporting found that having clear visibility into cloud usage becomes a leading issue for our customers. This includes tracking resource utilization, monitoring costs, and optimizing cloud services.  Complex cloud pricing: Dealing with complex, proprietary billing data and different pricing models from providers can make it even trickier to normalize data and reconcile costs.  Complex multi-cloud environments: Take the two big challenges of true visibility and complex cloud pricing, mash them up, and what do you get? Complex multi-cloud environments. Basically, the word "complexity" shows up way too often when we're talking about cloud cost! Cloud waste stats: In our survey, 67% said less than a third of their cloud spending is wasted, up from 56% last year, showing improved FinOps adoption and growing awareness of cloud waste which is good news! The bad news? 20% of respondents remain unfamiliar with the cloud waste they possess. This highlights the need for efforts to address this issue! Learn more on cloud waste costs. Most organizations want to measure unit costs Unit economics metrics are a MUST for engineering teams. Why? It allows them to gauge the business value associated with cloud expenditures quantitatively. With these metrics, teams can make informed, data-driven decisions in the realm of Financial Operations (FinOps), ensuring optimal allocation of resources and maximizing returns. The market definitely expressed interest in measuring unit costs; about 70% of respondents said they wanted to measure unit economics metrics but were not there yet. What about the other 30%? For those who do measure unit costs, 65% do so automatically with a tool they built in-house (45%) or a 3rd party solution (25%) like us! The remaining 35% rely on manual processes that use a combination of tools or spreadsheets to calculate their unit economics metrics, which blows our minds that some operations are still being done manually! Three is not a crowd: Over half of the respondents reported using third-party solutions to allocate direct and shared costs to business units, up from 38% last year, indicating that FinOps platforms are becoming increasingly popular with organizations. Find out more on how third-party tools are transforming cloud costs.💡 Cloud costs are on the rise, but less so for Umbrella customers Organizations aspire to effectively manage cloud expenditure, yet struggle to achieve this goal. According to Flexera's 2023 State of the Cloud Report, a whopping 82% of companies say controlling cloud spend is their biggest challenge, surpassing security for the first time.  That's why FinOps is such a life-saver when it comes to cloud costs, companies maximize cloud investments, achieving more with fewer resources. When comparing our customer data to Flexera's, most half of Umbrella's customers increased cloud spending by over 10% in the past year. But the best part? Over 45% reduced cloud spending through cost optimization, scaling adoption at the same or lower cost with Umbrella! And the savings keep coming: Over 60% of customers saved more than 5% of the annual cloud spend through cost optimizations in the last 12 months with us. Additionally, over 40% saved more than 10%, and over 20% saved more than 20%. See more of our cloud saving stats in our report! 💰   The easier the better The concept of FinOps makes the spend smarter in all aspects. When it comes to innovation, don't cut corners for the possibility of a few savings. FinOps can handle commitment-based discounts while engineering teams can take care of limiting costly resources. Our data shows the popular use of commitment-based discounts for easiest-to-implement optimizations. Commitment-based discounts were implemented 47% of the time, accounting for 43% of savings. Terminations of idle resources were implemented 33% of the time, accounting for 42% of the savings. Most 3rd party tools claim to reduce costs through rightsizing, our data indicate limited impact and implementation difficulties. Don't let the word "commitment" scare you! These plans save you significant amounts of money on cloud costs! Third-party tools are spot on with cloud anomalies: According to our market survey, 32% relied on third-party tools while 16% used in-house solutions. Unfortunately, a whopping 20% could only spot a cost anomaly after receiving the bill. Don't miss out on our report for more of these findings! 😉 Umbrella customers are beating anomalies at their own game Detecting anomalies before they have a chance to do any real damage is the best way to avoid costly bills. So, how fast can these anomalies be found? Based on FinOps Foundation’s 2023 report, respondents' ability to detect cloud cost anomalies within hours remained similar to that of 2022. Here's what separates Umbrella from others: 84% of our customers were able to spot anomalies in mere moments or within a few short hours, saving time and money simultaneously! Umbrella keeps FinOps in practice:  A remarkable 80% of surveyed Umbrella customers described their cost optimization endeavors as proactive. Final thoughts:  And that's your preview of our 2023 State of Cloud Cost Survey Report. We covered multiple aspects of cloud spending by using our general market survey and our own data findings.  Notable standouts include: The rise of third-party solutions  The increasing challenge of true visibility into cloud costs Cloud spending and savings are more frequent with Umbrella customers.   Related Guides: Top 13 Cloud Cost Optimization: Best Practices for 2025 Understanding FinOps: Principles, Tools, and Measuring Success Related Products: Umbrella: Cost Management Tools