Mastering multicloud costs with FinOps

In 2019, an open-source organization was established to promote best practices and education for cloud financial management. The FinOps Foundation is comprised of individuals and companies to share knowledge and experiences to promote best practices for cloud optimization, financial governance, and cloud cost management.

More companies are adopting the multicloud strategy to maximize efficiency by selecting the best services for each task, many face the challenge of managing costs across multiple cloud providers. Multicloud customers often encounter inconsistent billing structures, as different cloud providers have varying billing models, making cost reporting confusing and inaccurate. The lack of standardization in cost reporting hinders cross-cloud comparisons.  Additionally, complex discount structures offered by cloud providers, such as reserved instances and volume discounts further complicate cost analysis.
 

The benefits of the FOCUS  framework for multicloud costing report

Standardizing cost reporting across multicloud environments allows for consistent data analysis, which simplifies the process of managing costs by eliminating the need to manually normalize data from different vendors.  The FinOps Foundation developed a common schema across all cloud providers, known as FinOps Open Cost, with a specification called FOCUS. This open source standard defines a unified format or common schema across all cloud providers to clarify for cost analysis.

For example, Amazon Web Services (AWS) calls their compute resources ‘EC2’ instances, while Google Cloud Platform (GCP) calls them ‘Compute Engine instances.’  The following table illustrates the various names for compute from different cloud providers. Under FOCUS, they all share a standard name defined by the FinOps specification.  This ensures consistent billing data, formatting, organization, naming standards, and metrics across all cloud providers. 
 

OCI FinOps can significantly reduce the overhead with FOCUS
 

With the help of FOCUS, Oracle Cloud Infrastructure (OCI)’s financial operations (FinOps) offer the following features and benefits:

• Standardized format: FOCUS provides a standardized format for cost and usage data across different cloud providers, including OCI. OCI cost reports are already aligned with the FOCUS schema, eliminating the need for extensive data transformation and normalization.  
• Reduced data wrangling: By adhering to the FOCUS standard, OCI simplifies the process of gathering, standardizing, and analyzing cloud billing data. This simplification reduces the time and effort required for data ingestion and normalization, allowing FinOps teams to focus on higher-value activities like analysis and optimization.  
• Improved data consistency: FOCUS helps ensure consistency in data structures, terminology, and metrics across providers. So, you can more easily compare costs, identify trends, and make informed decisions based on accurate and reliable data.
• Prebuilt integrations: OCI FinOps offers prebuilt integrations with various tools and platforms, further streamlining the data normalization process.   
• Automated data ingestion: OCI provides automated data ingestion capabilities, making it easy to import and process cost and usage data from multiple sources, including OCI itself.
• Centralized data repository: OCI FinOps offers a centralized repository for storing and managing cost and usage data, making it easier to access and analyze information from different sources.

Inside the OCI Fabric:
Data Enrichment
This step involves enhancing raw cloud cost and usage data with more context and meaning. This context includes enhancements such as tagging and labeling cloud resources to categorize them based on business units, projects, or other criteria.

Data Store
You must also integrate with other data sources by combining cloud cost data with other relevant datasets like business metrics, project budgets and operational data. This integration helps to correlate cloud spending with business outcomes and identify cost-saving measures.

Autonomous Data Warehouse and Data Catalog are powerful tools that can significantly enhance the efficiency, accessibility, and value of your data store. The self-driving database automates many of the complex tasks associated with database management, freeing up valuable IT resources and minimizing human errors, it also uses advanced machine learning algorithms to optimize query performance.  Data Catalog provides a centralized repository for all your data assets, making it easy to find and understand the data you need.

Reporting & Analytics
The OCI Monitoring service and Oracle Analytics Cloud (OAC) are potent tools that can significantly enhance your FOCUS reporting efforts. By using these technologies, you can gain deeper insights into your cloud costs, optimize resource utilization, and make data-driven decisions to improve your financial performance.

The following architectural diagram depicts the FOCUS data extracts flowing from various sources, such as public cloud, data center, and software-as-a-service (SaaS) provider.

Figure 1 Oracle FinOps Hub

For more information about capabilities of FOCUS on OCI, see Announcing FOCUS support for OCI cost reports to make multicloud FinOps easier.

Conclusion

By embracing FinOps principles and using the FOCUS framework, you can analyze your multicloud Oracle environment to optimized costs and gain insightful reporting. The FinOps Foundation empowers you to overcome the complexities of managing expenses across diverse cloud providers. The FOCUS framework tackles the inconsistencies in billing structures and reporting formats, providing a standardized language for cost data. For example, you can effortlessly compare AWS EC2 instances, GCP Compute Engine instances, and OCI VMs, all presented under a unified umbrella and offering the following benefits:

• Simplified cost analysis: FOCUS eliminates the tedious task of manually normalizing data from different vendors, enabling seamless cost analysis across your entire multicloud landscape.
• Enhanced reporting: Effortless report generation simplifies cost visibility, allowing for informed decision-making.
• Streamlined cost allocation: FOCUS facilitates accurate cost allocation across departments and projects, fostering accountability and resource optimization.

Major cloud providers, including AWS, Google Cloud, Microsoft Azure, and OCI, recognize the value of FOCUS and offer native support or conversion tools. Within OCI, the FinOps Hub provides a comprehensive cost management experience. From the user-friendly interface, you can download standardized FOCUS cost reports, establish budgets, and utilize the FOCUS converter to transform historical data for in-depth analysis.

For more information about the FinOps Foundation and FOCUS on Oracle Cloud Infrastructure, see the following resources:

• The FinOps Foundation
• FinOps FOCUS
• Using OCI FinOps Hub
• Announcing FOCUS support for OCI cost reports to make multicloud FinOps easier