The intersections between FinOps, Sustainable IT, and Observability.

In this piece, we would cover some new practices and interesting trends that are going to change and augment IT infrastructure.

A common question asked in the developer community is why should I use observability? and yes the most frequent reply is to monitor the infrastructure of your system that way your team can see the visibility and stay ahead of changes that occur. Why these responses are correct understanding how your business goals correlate with your cloud infrastructure is a crucial reason to observe your system, especially for the Saas and e-commerce industry.

A closer look at FinOps and Sustainable highlights the value in investing in observability as an intersection between these three trends allows for the organisation to stay ahead of the trend whilst meeting the demands of both a sustainable world and meeting customer demand.

 

 

According to Gartner’s Top 10 Strategic trends, highlighted in the image above.  The growth of digital transformation and the surge for new IT innovation has led to IT companies’ migration to the cloud. Whilst this brings about the desired results. Moving from on-premises infrastructure to cloud computing offers significant energy savings. While organizations worldwide are adopting cloud computing, few are aware of its environmental impact.  A study carried out by sustainable IT found that only 19% measure the cloud’s environmental impact.  We see three major factors that accelerate these changes in an organisation.

 The Performance and quality requirements

 

 

 

No one wants to wait more than 200msec.

More than ever the end-user experience requires an ever-increasing performance and availability, no one wants to wait more than 200 seconds to open an application or to finish a transaction.

In the Netflix series “The Playlist” which highlighted the Spotify story, Daniel Ek’s was given a requirement to have the music start instantly, he did accept nothing less than the required which led to an availability of  0.001 sec insufficient.

The demand for availability is the same, 10 minutes with an unavailable application can lose millions of dollars, so, 99.999% uptime is the ‘minimum’ requirement.

The usage of new technologies and cloud-native applications is growing a lot because it can support developers to reach new requirements, but on the other hand, the complexity to manage a distributed microservice application across a hybrid, multi-cloud, and heterogeneous infrastructure also grows significantly.

Leading to a scenario where the Finance teams prioritize the business values, reducing costs, growing the business, and satisfying the regulations (including sustainability). The application teams prioritize new functions, innovations, fast delivery, and high-quality servers, and the SRE should support the innovation but also aim to avoid negative impacts on performance, availability, and user experience.

Costs requirements

 

Mainly after the COVID pandemic, Cloud costs grew exponentially which directly impacted the Co2 waste. As soon as the companies move their workloads to Cloud, they transformed the cost model used from CapEx to OpEx model, which in theory is good, but another factor started to emerge, is really easy to create new components in the Cloud, is pretty quick and easy to request a new server, and because of that, the companies started to lose the control of these costs.

According to Forbes, 30% of cloud spending is waste, but the problem is to define where are these wastes because enterprises want to continue increasing the usage of new cloud services to allow them to grow the business.

Accelerating FinOps and Sustainable IT article says that electricity represents about 70% of the Data Center operating costs

Capgemini Sustainable IT Report has detailed information about the costs and wastes.

Sustainable Requirements

It has already been established that sustainability is not something new, we are seeing discussions everywhere, ONU is always discussing it on different forums, creating Kyoto Protocol, and Paris Agreement aiming to reduce the carbon footprint. Some other actions are happening such as the creation of governmental regulations in a lot of counties, where the companies should meet.

Very soon, the expectation is that the technology could be responsible for consuming 20% of the total electricity in the world.

IT companies should also contribute to all those actions once they are responsible for s significant percentage of the carbon footprint generated every day. Nowadays just 18% of companies have a comprehensive sustainable IT strategy.

Sustainable IT can be explained as all initiatives used to reduce the environmental impacts caused by IT resources. But why companies are interested in it? Basically to generate benefits for the organization, be in compliance with government regulations, improve the company’s reputation, and also to reduce costs.

Gartner also put Sustainable IT as one of the Top 10 Strategic Technologies trends for 2023 exactly because of the reasons I mentioned before.

But who is responsible for sustainability when a company runs its applications on the Cloud? This is a shared responsibility where the cloud providers are responsible for the cloud infrastructure, using modern IT resources with less electricity consumption (cooling systems, supply chain, water consumption reduction) and the Cloud customers are responsible for the best way to use Cloud resources evaluating the workload in a holistic way covering the full stack.

The full stack evaluation is the better strategy to allow the organizations to have elastic and sustainable operations running together

To address the three major factors discussed,  Your team can focus on Implementing the emerging practices, such as observability, FinOps and SRE Methodology.

You can align your FinOps and sustainable IT to address the three major factors. I’ll discuss this in detail here.

FinOps

FinOps is an evolving cloud financial management discipline and cultural practice that enables organizations to get maximum business value by helping engineering, finance, technology, and business teams to collaborate on data-driven spending decisions. — FinOps Org

In other words, FinOps adds finance and cost control to the operations, not just to reduce the costs, but to use the budget efficiently to promote innovation and improve quality, speed and why not, and sustainability (GreenOps).

As you can see in the image, all the Personas should be involved in the entire process, financial data should be available for everybody in real time, and everybody should drive decisions based on the business objectives.

Scenarios you can use FinOps for better decisions:

  • Scenario 1 –  your entire platform is slow and your Observability tool suggests that some applications should be improved to solve the latency problems. Simultaneously your team workload is high due to new capabilities and you’ve committed to onboarding more customers.  Now’s a good time to employ the finOps. The FinOps team can decide if is better to use the budget to increase the Cloud resources to fix the latency problem and deliver the new functions or is better to redirect the team efforts to fix the application latency problems, change the code and postpone the new capabilities.
  • Scenario 2- you have a workload to run on the Cloud once a week, you know the workload behaviour and you have more than one Cloud provider, one Cloud provider charges by GB / Month, and the other Cloud Provider charge by egress traffic. Based on your Finance reports and the workload behaviour you can decide where to send the specific workload to reduce the costs.

FinOps mutually support Sustainable IT and vice-versa, both of them can bring together cost optimization and carbon footprint reduction. For sure we can have scenarios where we can reduce the costs, but not exactly reduce the carbon footprint (For example using a different Cloud Provider for a specific workload), but in general, the cost reduction will reduce the waste, and reducing the waste, will reduce the Carbon Footprint.

Conclusion

 

The image above shows us some important requirements, such as Increase Demand, High User Expectations, Quick Innovation, Easy getting more IT Resources, and reliability requirements.

All of them together bring us some important problems we want to address, such as the increase in Cloud wastes, the increase in the costs, and the Increase in carbon footprint generated by IT.

Observability will bring the visibility we need related to application performance and metrics, a correlation between components, identification of code issues that are consuming resources, and so on.

SRE Practices will support the teams on what to do with the data generated by Observability, fixing the application problems permanently, and making decisions balancing innovation and reliability.

FinOps will bring finance information into the game, allowing the team to make decisions not only with technical data but also with business goals, and costs.

Sustainable IT will also bring sustainability data to the whole team, allowing them to make the decisions also think about the impacts generated by the solutions, and satisfy sustainability regulations.

Hope this article could help you to understand a little bit about those concepts and also use all of them together to support company targets.

You can also learn more about Instana  and AWS cost optimizer

If you are not already using Instana to observe your EC2 instances, sign up for a free 14-day trial today!

 

 

 

 

 

 

 

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Instana, an IBM company, provides an Enterprise Observability Platform with automated application monitoring capabilities to businesses operating complex, modern, cloud-native applications no matter where they reside – on-premises or in public and private clouds, including mobile devices or IBM Z.

Control hybrid modern applications with Instana’s AI-powered discovery of deep contextual dependencies inside hybrid applications. Instana also gives visibility into development pipelines to help enable closed-loop DevOps automation.

This provides actionable feedback needed for clients as they to optimize application performance, enable innovation and mitigate risk, helping Dev+Ops add value and efficiency to software delivery pipelines while meeting their service and business level objectives.

For further information, please visit instana.com.