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J.R. Storment & Mike Fuller
S
e
c
o
n
d
E
d
i
t
i
o
n
Cloud
FinOps
Collaborative, Real-Time Cloud
Value Decision Making
Compliments of
CLOUD COMPUTING
“Adoption of FinOps
requires both executive
and ground level support.
This edition of the definitive
guide to FinOps lays out
playbooks for how to
create a partnership with
engineering teams, how to
accurately forecast spend,
using data from other
frameworks to influence
decisions, and how
ultimately cultural changes
trump mandates.”
—BethMarki
Executive Director of Cloud Financial
Management at JPMorgan Chase
Cloud FinOps
US $79.99 CAN $99.99
ISBN: 978-1-492-09835-5
Twitter: @oreillymedia
linkedin.com/company/oreilly-media
youtube.com/oreillymedia
FinOps brings financial accountability to the variable spend
model of cloud. Used by the majority of global enterprises,
this management practice has grown from a fringe activity
to the de facto discipline managing cloud spend. In this book,
authors J.R. Storment and Mike Fuller outline the process of
building a culture of cloud FinOps by drawing on real-world
successes and failures of large-scale cloud spenders.
Engineering and finance teams, executives, and FinOps
practitioners alike will learn how to build an efficient and
effective FinOps machine for data-driven cloud value
decision-making. Complete with a road map to get you
started, this revised second edition includes new chapters
that cover forecasting, sustainability, and connectivity to
other frameworks.
You’ll learn:
• A road map to build a culture of FinOps with
executive support
• How to understand and forecast your cloud spending
• How to empower engineering and finance to partner
• Cost allocation strategies to create accountability
for cloud and container spend
• Strategies for rate discounts from cloud commitments
• When and how to implement automation of repetitive
cost tasks
• How to empower engineering team action on cost efficiency
• How to use unit economics to guide data-driven
decision-making
J.R. Storment is Executive Director
of the FinOps Foundation. He works
with the largest cloud consumers in the
world to advance their people through
community, education, and standards.
Mike Fuller is principal engineer
on the cloud FinOps team at
Atlassian in Australia, developing
FinOps practice and enabling
engineering teams to efficiently
remain in control of cloud spend.
ISBN: 978-1-098-13532-4
Cloud FinOps: Collaborative, Real-Time Cloud Value Decision Making, 2nd Edition J.R. Storment
Praise for CloudFinOps
Security is Job 0, FinOps is Job 0.5. Just as security is everyone’s job, so too is FinOps. The
second edition of the Cloud FinOps book provides a recipe for FinOps success.
—Marit Hughes, Deloitte
FinOps brings business, finance, and engineering together to drive a culture of
transparency and accountability for cloud spend management. Google Cloud and
the Finops Foundation are working together to pioneer open billing standards
for further transparency and acceleration of cloud business value. This book
synthesizes those collaborative efforts.
—Mich Razon, VP & GM, Head of
Commerce Platforms at Google Cloud
Optimizing cost is critical to the success of cloud migrations and the move to
consumptive models. Cloud optimization should be a key area of focus for companies.
The FinOps book lays out a road map for how to drive the cultural change
that is required across the technology, finance, and business organizations of an
enterprise running at scale in the cloud.
—Fred Delombaerde, VP Core Commerce at Microsoft
Today, public cloud cost management transcends any individual vendor. Large
organizations need to normalize and merge a variety of vendor costs and usage data
into a single view, to enable data-driven decisions by engineering, business, and finance.
It is essential that the FinOps Foundation continues to iterate on the FinOps framework
and facilitate the creation of an open standard that vendors can then use to consistently
present their cost and usage data, to enable the work of FinOps practitioners.
—Udam Dewaraja, Head of Cloud
Financial Management at Citi
Any company looking to optimize cloud costs should first turn to the Cloud FinOps
book and second to the materials and community of the FinOps Foundation. Together
these resources have helped to lay a successful foundation for Target Corporation’s
FinOps practice. We have leveraged the FinOps domains and capabilities to build
tools for leaders and engineers. With the seven new chapters included in the Cloud
FinOps second edition, including key concepts like putting “Data in the Path of the
Engineer” and leveraging the “UI of FinOps,” we will mature our FinOps practice and
adoption for our public and private cloud utilization.
—Kim Wier, Director of Engineering, Target Corporation
FinOps as a theory may be hard for some execs to grasp. Leadership is much more
likely to back an effort that has already shown demonstrated, quantified success. Prove
the value and you’ll get the backing you seek. The new chapters in the FinOps book,
such as the “UI of FinOps” and “Adopting FinOps,” give invaluable insights into how to
drive engineering action on cost efficiency and gain executive support.
—Jason Rhoades, Intuit
Adoption of FinOps requires both executive and ground level support. This edition of
the definitive guide to FinOps lays out playbooks for how to create a partnership with
engineering teams, how to accurately forecast spend, using data from other frameworks
to influence decisions, and how ultimately cultural changes trump mandates.
—Beth Marki, Executive Director of Cloud Financial
Management at JPMorgan Chase
FinOps has emerged as a new model to define the future of how finance and
technical teams partner together. The Cloud FinOps book has provided a road
map for those organizations looking to evolve the way they manage and optimize
cloud expenditures, without slowing technical teams and innovation. This is a must-
read for both finance and technical teams to help them understand their role
in the world of cloud financial management!
—Keith Jarrett, Cloud Financial Management Leader
J.R. Storment and Mike Fuller
Cloud FinOps
Collaborative, Real-Time
Cloud Value Decision Making
SECOND EDITION
Boston Farnham Sebastopol Tokyo
Beijing Boston Farnham Sebastopol Tokyo
Beijing
978-1-098-13532-4
[LSI]
Cloud FinOps, Second Edition
by J.R. Storment and Mike Fuller
Copyright © 2023 J.R. Storment and Mike Fuller. All rights reserved.
Printed in the United States of America.
Published by O’Reilly Media, Inc., 1005 Gravenstein Highway North, Sebastopol, CA 95472.
O’Reilly books may be purchased for educational, business, or sales promotional use. Online editions are
also available for most titles (http://oreilly.com). For more information, contact our corporate/institutional
sales department: 800-998-9938 or corporate@oreilly.com.
Acquisitions Editor: John Devins
Development Editor: Corbin Collins
Production Editor: Kate Galloway
Copyeditor: nSight, Inc.
Proofreader: Piper Editorial Consulting, LLC
Indexer: nSight, Inc.
Interior Designer: David Futato
Cover Designer: Karen Montgomery
Illustrator: Kate Dullea
December 2019: First Edition
January 2023: Second Edition
Revision History for the Second Edition
2023-01-18: First Release
See http://oreilly.com/catalog/errata.csp?isbn=9781492098355 for release details.
The O’Reilly logo is a registered trademark of O’Reilly Media, Inc. Cloud FinOps, the cover image, and
related trade dress are trademarks of O’Reilly Media, Inc.
The views expressed in this work are those of the authors, and do not represent the publisher’s views.
While the publisher and the authors have used good faith efforts to ensure that the information and
instructions contained in this work are accurate, the publisher and the authors disclaim all responsibility
for errors or omissions, including without limitation responsibility for damages resulting from the use
of or reliance on this work. Use of the information and instructions contained in this work is at your
own risk. If any code samples or other technology this work contains or describes is subject to open
source licenses or the intellectual property rights of others, it is your responsibility to ensure that your use
thereof complies with such licenses and/or rights.
This work is part of a collaboration between O’Reilly and VMware. See our statement of editorial
independence.
For Our Families
To Jessica and Oliver of the Triangle for being patient and supportive the second time
around too. And to Wiley, whose impact we feel daily.
—J.R.
Lesley, Harrison, and Claire, without your love and support this would have never been
possible.
—Mike
Cloud FinOps: Collaborative, Real-Time Cloud Value Decision Making, 2nd Edition J.R. Storment
Table of Contents
Preface. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxi
Part I. Introducing FinOps
1. What Is FinOps?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Defining the Term “FinOps” 1
The FinOps Hero’s Journey 2
Where Did FinOps Come From? 4
Data-Driven Decision Making 7
Real-Time Feedback (aka the “Prius Effect”) 8
Core Principles of FinOps 10
When Should You Start FinOps? 11
Starting with the End in Mind: Data-Driven Decision Making 14
Conclusion 15
2. Why FinOps?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Use Cloud for the Right Reasons 17
Cloud Spend Keeps Accelerating 19
The Impact of Not Adopting FinOps 21
Informed Ignoring: Why Start Now? 23
Conclusion 26
3. Cultural Shift and the FinOps Team. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Deming on Business Transformation 29
Who Does FinOps? 30
Why a Centralized Team? 32
ix
The FinOps Team Doesn’t Do FinOps 33
The Role of Each Team in FinOps 34
Executives and Leadership 34
Engineering and Developers 35
Finance 35
Procurement and Sourcing 35
Product or Business Teams 35
FinOps Practitioners 36
A New Way of Working Together 36
Where Does Your FinOps Team Report? 36
Understanding Motivations 38
Engineers 38
Finance People 39
Executives and Leadership 40
Procurement and Sourcing People 40
FinOps Throughout Your Organization 41
Hiring for FinOps 41
FinOps Culture in Action 43
Difficulty Motivating People Is Not New 44
Contributors to Action 46
Detractors from Action 46
Tipping the Scales in Your Favor 46
Conclusion 47
4. The Language of FinOps. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Defining a Common Lexicon 50
Defining the Basic Terms 51
Defining Finance Terms for Cloud Professionals 54
Abstraction Assists Understanding 56
Cloud Language Versus Business Language 58
Creating a Universal Translator Between Your DevOps and Finance Teams 59
The Need to Educate All the Disciplines 60
Benchmarking and Gamification 60
Conclusion 61
5. Anatomy of the Cloud Bill. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Types of Cloud Bill 63
Cloud Billing Complexity 64
Basic Format of Billing Data 65
Time, Why Do You Punish Me? 67
Sum of the Tiny Parts 68
x | Table of Contents
A Brief History of Cloud Billing Data 69
The Importance of Hourly Data 72
A Month Is Not a Month 72
A Dollar Is Not a Dollar 73
Two Levers to Affect Your Bill 73
Who Should Avoid Costs and Who Should Reduce Rates? 74
Centralizing Rate Reduction 75
Why You Should Decentralize Usage Reduction 76
Conclusion 77
6. Adopting FinOps. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
A Confession 80
Different Executive Pitches for Different Levels 81
Starting Pitch 82
Advancing Pitch 83
Sample Headcount Plan for Advancing a FinOps Team 85
Pitching the Executive Sponsor 86
Playing to Your Audience 87
Key Personas That the Driver Must Influence 88
CEO Persona 88
CTO/CIO Persona 89
CFO Persona 89
Engineering Lead Persona 89
Roadmap for Getting Adoption of FinOps 90
Stage 1: Planning for FinOps in an Organization 90
Stage 2: Socializing FinOps for Adoption in an Organization 92
Stage 3: Preparing the Organization for FinOps 94
Type of Alignment to the Organization 95
Full Time, Part Time, Borrowed Time: A Note on Resources 96
A Complex System Designed from Scratch Never Works 97
Conclusion 97
7. The FinOps Foundation Framework. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
An Operating Model for Your Practice 100
The Framework Model 100
Principles 101
Personas 101
Maturity 102
Phases 102
Domains and Capabilities 102
Structure of a Domain 103
Table of Contents | xi
Structure of Capabilities 104
Adapting the Framework to Fit Your Needs 106
Connection to Other Frameworks/Models 107
Conclusion 108
8. The UI of FinOps. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Build Versus Buy Versus Native 109
When to Use Native Tooling 110
When to Build 111
Why to Buy 112
Operationalized Reporting 114
Data Quality 114
Perfect Is the Enemy of Good 116
Report Tiering 116
Rolling Out Changes 118
The Universal Report 118
Accessibility 119
Color 120
Visual Hierarchy 120
Usability and Consistency 120
Language 121
Consistency of Color and Visual Representation 121
Recognition Versus Recall 121
Psychological Concepts 122
Anchoring Bias 122
Confirmation Bias 123
The Von Restorff Effect 124
Hick’s Law 125
Perspectives on Reports 126
Personas 126
Maturity 126
Multicloud 127
Putting Data in the Path of Each Persona 127
Data in the Path of Finance 128
Data in the Path of Leadership 128
Data in the Path of Engineers 128
Connecting FinOps to the Rest of the Business 129
Seek First to Understand 129
Conclusion 131
xii | Table of Contents
Part II. Inform Phase
9. The FinOps Lifecycle. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
The Six Principles of FinOps 135
#1: Teams Need to Collaborate 136
#2: Decisions Are Driven by the Business Value of Cloud 136
#3: Everyone Takes Ownership of Their Cloud Usage 136
#4: FinOps Reports Should Be Accessible and Timely 136
#5: A Centralized Team Drives FinOps 137
#6: Take Advantage of the Variable Cost Model of the Cloud 137
The FinOps Lifecycle 138
Inform 139
Optimize 141
Operate 142
Considerations 144
Where Do You Start? 145
You Don’t Have to Find All the Answers 145
Conclusion 146
10. Inform Phase: Where Are You Right Now?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
Data Is Meaningless Without Context 147
Seek First to Understand 148
Organizational Work During This Phase 150
Transparency and the Feedback Loop 150
Benchmarking Team Performance 152
What Great Looks Like 153
Conclusion 154
11. Allocation: No Dollar Left Behind. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
Why Allocation Matters 155
Amortization: It’s Accrual World 156
Creating Goodwill and Auditability with Accounting 158
The “Spend Panic” Tipping Point 159
Spreading Out Shared Costs 160
Chargeback Versus Showback 162
A Combination of Models Fit for Purpose 163
Accounts, Tagging, Account Organization Hierarchies 164
The Showback Model in Action 165
Chargeback and Showback Considerations 166
Conclusion 166
Table of Contents | xiii
12. Tags, Labels, and Accounts, Oh My!. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169
Tag- and Hierarchy-Based Approaches 170
Getting Started with Your Strategy 172
Communicate Your Plan 172
Keep It Simple 172
Formulate Your Questions 173
Comparing the Allocation Options of the Big Three 173
Comparing Accounts and Folders Versus Tags and Labels 174
Organizing Accounts and Projects into Groups 175
Tags and Labels: The Most Flexible Allocation Option 176
Using Tags for Billing 177
Getting Started Early with Tagging 178
Deciding When to Set Your Tagging Standard 178
Picking the Right Number of Tags 179
Working Within Tag/Label Restrictions 180
Maintaining Tag Hygiene 181
Reporting on Tag Performance 182
Getting Teams to Implement Tags 182
Conclusion 183
13. Accurate Forecasting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185
The State of Cloud Forecasting 186
Forecasting Methodologies 187
Forecasting Models 189
Cloud Forecasting Challenges 189
Manual Versus Automated Forecasts 190
Inaccuracies 190
Granularity 190
Forecast Frequency 192
Communication 193
Future Projects 194
Cost Estimation 195
Impacts of Cost Optimization on Forecasts 196
Forecast and Budgeting 198
The Importance of Managing Teams to Budgets 199
Conclusion 202
xiv | Table of Contents
Part III. Optimize Phase
14. Optimize Phase: Adjusting to Hit Goals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205
Why Do You Set Goals? 205
The First Goal Is Good Cost Allocation 206
Is Savings the Goal? 206
The Iron Triangle: Good, Fast, Cheap 207
Hitting Goals with OKRs 208
OKR Focus Area #1: Credibility 209
OKR Focus Area #2: Maintainable 209
OKR Focus Area #3: Control 209
Goals as Target Lines 211
Budget Variances 213
Using Less Versus Paying Less 214
Conclusion 215
15. Using Less: Usage Optimization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217
The Cold Reality of Cloud Consumption 217
Where Does Waste Come From? 219
Usage Reduction by Removing/Moving 220
Usage Reduction by Resizing (Rightsizing) 221
Common Rightsizing Mistakes 223
Relying on Recommendations That Use Only Averages or Peaks 223
Failing to Rightsize Beyond Compute 225
Not Addressing Your Resource “Shape” 225
Not Simulating Performance Before Rightsizing 225
Hesitating Due to Reserved Instance Uncertainty 226
Going Beyond Compute: Tips to Control Cloud Costs 226
Block Storage 226
Object Storage 228
Networking 229
Usage Reduction by Redesigning 229
Scaling 229
Scheduled Operations 230
Effects on Reserved Instances 230
Benefit Versus Effort 231
Serverless Computing 232
Not All Waste Is Waste 233
Maturing Usage Optimization 235
Advanced Workflow: Automated Opt-Out Rightsizing 236
Table of Contents | xv
Tracking Savings 239
Conclusion 241
16. Paying Less: Rate Optimization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243
Compute Pricing 243
On-Demand/Pay-As-You-Go 244
Spot Resource Usage 244
Commitment-Based Discounts 245
Storage Pricing 245
Volume/Tiered Discounts 246
Usage-Based 246
Time-Based 247
Negotiated Rates 248
Custom Pricing 248
Seller Private Offers 249
BYOL Considerations 249
Conclusion 250
17. Understanding Commitment-Based Discounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251
Introduction to Commitment-Based Discounts 251
Commitment-Based Discount Basics 253
Compute Instance Size Flexibility 255
Conversions and Cancellations 257
Overview of Usage Commitments Offered by the Big Three 258
Amazon Web Services 258
What Does an RI Provide? 259
AWS Commitment Models 260
AWS Reserved Instance 260
Member Account Affinity 261
Standard Versus Convertible RIs 263
Instance Size Flexibility 264
AWS Savings Plans 267
Savings Bundles 268
Microsoft Azure 269
Azure Reservations 269
Instance Size Flexibility 271
Azure Savings Plans 272
Google Cloud 274
Google Committed Use Discounts 274
Paying for Cores, Not Hours, in Google 275
Google Billing and Sharing CUDs 275
xvi | Table of Contents
Google Billing Account and Ownership 276
Applying Google CUDs in a Project 277
Google Flexible Committed Use Discounts 277
Conclusion 278
18. Building a Commitment-Based Discount Strategy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281
Common Mistakes 282
Steps to Building a Commitment-Based Discount Strategy 282
Step 1: Learn the Fundamentals of Each Program 282
Step 2: Understand Your Level of Commitment to Your
Cloud Service Provider 286
Step 3: Build a Repeatable Commitment-Based Discount Process 286
Step 4: Purchase Regularly and Often 289
Step 5: Measure and Iterate 290
Step 6: Allocate Up-Front Commitment Costs Appropriately 291
How to Manage the Commitment Strategy 293
Purchasing Commitments Just-in-Time 293
When to Rightsize Versus Commit 295
The Zone Approach 296
Who Pays for Commitments? 298
Strategy Tips 300
Conclusion 302
19. Sustainability: FinOps Partnering with GreenOps. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303
What Are Cloud Carbon Emissions? 305
Scope 1, 2, and 3 Emissions 306
Are Cloud Providers Green? 307
Access 308
Completeness 308
Granularity 309
Partnering with Engineers on Sustainability 309
FinOps and GreenOps Better Together? 310
GreenOps Remediations 312
Avoid FinOps Working Against GreenOps 313
Conclusion 314
Part IV. Operate Phase
20. Operate: Aligning Teams to Business Goals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319
Achieving Goals 319
Table of Contents | xvii
Staffing and Augmenting Your FinOps Team 320
Processes 320
Onboarding 321
Responsibility 322
Visibility 322
Action 323
How Do Responsibilities Help Culture? 324
Carrot Versus Stick Approach 324
Handling Inaction 325
Putting Operate into Action 326
Conclusion 326
21. Automating Cost Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329
What Is the Outcome You Want to Achieve? 330
Automated Versus Manual Tasks 330
Automation Tools 332
Costs 332
Other Considerations 333
Tooling Deployment Options 333
Automation Working Together 335
Integration 335
Automation Conflict 335
Safety and Security 336
How to Start 337
What to Automate 338
Tag Governance 338
Scheduled Resource Start/Stop 338
Usage Reduction 338
Conclusion 339
22. Metric-Driven Cost Optimization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341
Core Principles 341
Automated Measurement 342
Targets 342
Achievable Goals 342
Data Driven 346
Metric-Driven Versus Cadence-Driven Processes 347
Setting Targets 349
Taking Action 349
Bring It All Together 350
Conclusion 352
xviii | Table of Contents
23. FinOps for the Container World. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 353
Containers 101 354
The Move to Container Orchestration 355
The Container FinOps Lifecycle 356
Container Inform Phase 357
Cost Allocation 357
Container Proportions 357
Tags, Labels, and Namespaces 361
Container Optimize Phase 362
Cluster Placement 362
Container Usage Optimization 362
Server Instance Rate Optimization 365
Container Operate Phase 365
Serverless Containers 366
Conclusion 366
24. Partnering with Engineers to Enable FinOps. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369
Integrating Us with Them 369
What’s on the Mind of the Engineer? 370
Constraints and the Solving of Hard Problems 372
Principles for Enabling Cost-Efficient Engineering 373
#1: Maximize Value Rather Than Reduce Cost 374
#2: Remember That We Are on the Same Team 375
#3: Prioritize Improving Communication 375
#4: Introduce Financial Constraints Early in the Product Development 376
#5: Enablement, Not Control 377
#6: Leadership Support Isn’t Helpful, It Is Essential 377
Data in the Path of the Engineer 379
Models for Partnering with Engineering Teams 380
Direct Contribution 380
Indirect Collaboration 380
Indirect Collaboration with Targeted Contribution 380
Conclusion 381
25. Connectivity to Other Frameworks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383
Total Cost of Ownership 385
Working with Other Methodologies and Frameworks 385
Find Out Who’s Out There 386
Make Friends and Share Goals 387
Share Influence, Terminology, and Processes 388
Share Infrastructure 389
Table of Contents | xix
Share Knowledge 389
Conclusion 389
26. FinOps Nirvana: Data-Driven Decision Making. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391
Unit Economics and Metrics 392
Unit Economics Don’t Have to Be About Revenue 393
Calculating Unit Economic Metrics 394
Spending Is Fine, Wasting Is Not 394
Activity-Based Costing 397
Coming Back to the Iron Triangle 399
What’s Missing from the Equation? 400
When Have You Won at FinOps? 401
Conclusion 403
27. You Are the Secret Ingredient. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405
Call to Action 406
Afterword on What to Prioritize (from J.R.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409
Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411
xx | Table of Contents
Preface
Dear Reader,
J.R. and Mike here, the coauthors of the book you are holding. We began this second
edition undertaking in early 2022. When we wrote the first edition of this book in
2019, the world was a different place. COVID had massively accelerated the move to
the cloud, shattering all previous estimates of cloud spend growth. After we started
writing this edition, a global economic downturn forced organizations—including
the major cloud service providers—to elevate the importance of cloud spend effi‐
ciency to board-level discussions. Amazon’s CFO has pledged to help customers trim
their cloud bills, and Microsoft’s CEO indicated that their top priority is to help their
customers do more with less.
The World Turned Upside Down
FinOps as a concept went from an obscure term to a business necessity. At confer‐
ences pre-2020 we frequently overheard: “What the heck is FinOps?” By 2023 it is
predicted that 80% of organizations using cloud services will establish a dedicated
FinOps function. The FinOps Foundation went from a twinkle in our eyes to a global
force with nearly 10,000 practitioners of the craft representing every major industry
and the majority of the Fortune 500, FTSE 100, and ASX 250. FinOps went from
being a fringe term to receiving 10 times the search traffic and analyst mentions that
the “cloud financial management” moniker pushed by large clouds like Amazon Web
Services did.
The pay-as-you-go model—also known as the variable spend model—allows engi‐
neers to gain rapid access to infrastructure so that they can innovate quickly. The
stories we hear remain: engineering teams still consume resources in the cloud with
not enough prioritization of cost efficiency. Finance teams struggle to understand and
keep up with what teams are spending and to properly allocate cloud investments.
Leadership still doesn’t know which levers to pull to implement a FinOps transforma‐
tion and drive more guidance of cloud spend investment.
xxi
The problem has only gotten more complex in the last three years. Cloud providers
have added hundreds of thousands of additional product stock-keeping units (SKUs)
driven by thousands of new features. In the months preceding publication of this
edition, Google Cloud and Azure offered completely new ways of making discount
commitments in the form of Azure Savings Plans and Google Flexible Committed
Use Discounts (Flexible CUDs), changing the game yet again.
During the last decade of our respective careers, we heard a consistent theme from
practitioners and executives alike: there’s a lack of cloud value education and knowl‐
edge available. Mike heard it while running cloud cost optimization for Atlassian’s
massive cloud deployments. J.R. heard it while coaching the world’s largest cloud
spenders as cofounder of Cloudability’s cloud spend management platform (acquired
by Apptio in 2019) from 2011 to 2020 and later as the executive director of the
FinOps Foundation, as an employee of the Linux Foundation.
From this demand for a resource from which we can all learn, along with a need for
someone to formally define FinOps, we joined forces in early 2019 with 26 expert
practitioners from the industry to create the FinOps Foundation.
The community of now nearly 10,000 practitioners from the FinOps Foundation
have provided most of the best practices we’ll cover in this book. The examples
herein come from their hard-earned experience and war stories shared in the various
community forums. We’ve also woven in quotes from them to help connect the
content with real-life thoughts and opinions on FinOps.
Who Should Read This Book
Anyone working in engineering, finance, procurement, product ownership, or leader‐
ship in a company running—or aspiring to run—in the public cloud will benefit from
this book. As an organization understands the personas in FinOps, it can map them
to relevant teams across the business.
Engineers are most likely not used to thinking about costs as a day-to-day concern.
In the precloud days, they were mainly worried about performance in relation to
hardware. Constrained by procurement and unable to get more servers whenever
they needed them, they had to plan far in advance. They have to think about the
cost of their infrastructure choices and its impact on the business. At first, this can
feel foreign and at odds with their primary focus of shipping product and feature
enhancements. Over time they add cost as another efficiency metric that they can
tune to positively impact the business.
A lot of engineers will just throw hardware at a problem. FinOps requires engineers to
consider the cost and margins.
—John Stuart, VP, DevOps, Security & IT at Jobvite
xxii | Preface
Finance traditionally focused on retroactive reporting on a monthly or quarterly
granularity, based on set budgets that quickly became out of date. The job has evolved
now to help enable the business to continually move forward, and to proactively
partner with tech and engineering teams to forecast spend, based on the actions
of engineers (who aren’t used to thinking about that cost). In other words, they’re
shifting from opaque and fixed capital expenditure (CapEx) reporting to transparent
and fluid operational expenditure (OpEx) forecasting. As part of that role, finance
teams become engineering team partners who understand what the drivers of cloud
spend are amid thousands of SKUs. They help to fundamentally reinvent how to
perform the finance function, while also rethinking how to report technology spend
to executives and investors.
Procurement teams are used to tightly controlled spending, careful rate negotiations,
and wielding the power of the purchase order before vendors get paid. Now procure‐
ment teams become strategic sourcing. They pull all rogue spending together into an
enterprise agreement with their cloud service provider to get the best rates for what
engineers are already using to deliver value.
We don’t win by shaving cents from the cloud provider. We win by delivering features to our
customers.
—Alex Landis, Autodesk
Product owners, responsible for the pricing and margins of their products, struggled
in the precloud world to understand all the costs that went into servicing a customer
or operating a commercial offering. Cloud lets them understand more, or all, of
the cost of delivering digital value, understand the cost impact of new features, and
see how customer use cases create variability in the cost of an application. This
allows product teams to collaborate much more effectively with engineering teams
developing the products, to forecast revenue and margin more effectively, and to
target customer demand much more efficiently.
Leadership, C-level executives, VPs, directors, or technology leaders managing budg‐
ets for a team have often lost direct control of cloud spending decisions and now
rely on their teams to operate within reasonable budgets. Tech executives no longer
plan large purchase decisions far in advance. Instead, they think more about how to
forecast and manage spending that’s already happening. The conversation has shifted
from ensuring services have the capacity to ensuring that they’re spending the right
amount of money for the job. They want more control over how much is spent and
more ability to strategically influence where it is spent.
This book seeks to break down barriers between these personas by laying out a
common lexicon and set of best practices to follow.
Preface | xxiii
About This Book
In the coming chapters, we’ll formally define FinOps. The definition we’ve created
was formulated by the most experienced cloud financial management teams on earth,
who manage hundreds of millions of dollars (or billions in some cases) per year
in cloud spend. We’ve collected their common practices for achieving cloud success
along with some pitfalls they’ve identified and solved. We’ll show what effective
FinOps looks like and how to start the FinOps transformation in your organization.
Previously, the only way to gain access to this knowledge would be to attend public
events where these experts would present their ideas. This book and the FinOps
Foundation changes that with a vibrant community, in-depth training resources, and
standardized best practices.
After you’ve read this book, we encourage you to get involved with the FinOps Foun‐
dation’s various programs as a pathway to continue honing your skills and career. The
mission of the foundation is to advance every individual who manages the value of
the cloud. The community is there for you. We hope that the real-world strategies,
processes, and stories in this book will inspire everyone to better take control of cloud
spend. And in the process, we can make our organizations, and our own careers,
more competitive.
What You Need to Know Before Reading On
At the time of writing, we assume readers will have a base level of knowledge
of at least one of the three main public cloud providers (Amazon Web Services
[AWS], Azure, and Google Cloud Platform [GCP]). Readers should understand how
the cloud works and charges for resources. They should also be familiar with the
major resource types like compute and storage, and higher-level service offerings like
managed databases, queues, and object storage.
A good starting place for the level of AWS knowledge needed is the AWS Business
Professional training, or better, the AWS Cloud Practitioner certification. Both cover
the basics of operating in AWS. For Google, check out the GCP Cloud Digital Leader
course. For Azure, try the Azure Fundamentals learning path. These can usually be
completed in a single-day workshop or through online training.
Readers should also understand the fundamentals of how cloud computing works;
know the key services on their cloud provider, including their common use cases;
and have a basic understanding of how billing and pricing work in the pay-as-you-go
consumption model.
For example: as an AWS user, you should already know the difference between EC2
(Elastic Compute Cloud) and RDS (Relational Database Service). You should under‐
stand that there are different ways to pay for those resources, such as On-Demand,
xxiv | Preface
Reserved Instances (RIs), Savings Plans (SPs), and Spot. It’s OK if you don’t know
how RIs or SPs work in detail or how to plan a strategy for purchasing them—we’re
going to cover that—but you should already understand that they can be used to save
money on compute resources.
FinOps Is Evolving
Over the past few years, so much has evolved into what we call FinOps today—and it
will continue to evolve. As the cloud service providers offer more and more services
and continue to offer different ways to optimize their platforms, FinOps will keep
adapting. We recommend always confirming the details of the cloud service provider
offerings we explore throughout this book. If there are corrections, alternative opin‐
ions, or criticisms of anything in this book, we encourage readers to contact us. After
all, it has taken brave folks challenging the way things are done to help formulate the
successful FinOps practices we have today.
Conventions Used in This Book
The following typographical conventions are used in this book:
Italic
Indicates new terms, URLs, email addresses, filenames, and file extensions.
This element signifies a tip or suggestion.
This element signifies a general note.
This element indicates a warning or caution.
Preface | xxv
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xxvi | Preface
Acknowledgments
First, to our families (Lesley, Jessica, Harrison, Oliver, and Claire), who sacrificed so
many nights and weekends in allowing us to write this book originally and then again
for the second edition, and who suffered through us talking about nothing else but
FinOps: thank you.
To the team at O’Reilly (Corbin Collins, John Devins, Kate Galloway, Kristen Brown,
and Sara Hunter): without your efforts this never would have happened.
Rob Martin, who has reread, commented, and proposed more thoughtful (and often
verbose!) changes than we could even consider.
Thanks to the teams at Amazon Web Services, Google Cloud, and Microsoft Azure
for your ongoing feedback and reviews.
Tech reviewers: Jason Rhoades and Joshua Bauman, who stepped in quickly to power
through a hornet’s nest of comments, revisions, and suggestions on our nearly final
draft.
We would like to thank all of the members of the FinOps Foundation. Since starting
the FinOps Foundation, we’ve been humbled by the number of companies and practi‐
tioners signing up and by the willingness of charter members to assist in formalizing
what FinOps is.
To the FinOps Foundation staff: Andrew Nhem, Ashley Hromatko, Ben de Mora, Joe
Daly, Kevin Emamy, Kyle McLaughlin, Natalie Bergman, Rob Martin, Ruben Vander
Stockt, Samantha White, Stacy Case, Steven Melton, Steven Trask, Suha Shim, Tho‐
mas Sharpe, and Vasilio Markanastasakis. Your efforts to help build the foundation
are greatly appreciated.
Mike would like to thank his FinOps team at Atlassian. Daniel Farrugia, Diana
Mileva, Florence Timso, Letian Wang, Sara Gadallah, Teresa Meade, and Tom Cutajar.
Throughout the years we’ve worked with many people who have shared their compa‐
nies’ stories around their cloud challenges and the methods they have implemented to
solve them. There are too many to mention, but to all of you: thanks.
Finally, thank you to all the people who helped along the way; without your efforts
this book would not be what it is today: Aaron Edell, Abuna Demoz, Adam Heher,
Alex Hullah, Alex Kadavil, Alex Landis, Alex Sung, Alexander Price, Alison McIntyre,
Alison Pumma, Ally Anderson, Amelia Blevins, Anders Hagman, Andrew Midg‐
ley, Andrew Thornberry, Anthony Tambasco, Antoine Lagier, Ben Kwan, Benjamin
Coles, Bhupendra Hirani, Bindu Sharma, Bob Nemeth, Brad Payne, Casey Doran,
Dana Martin, Darek Gajewski, David Andrews, David Angot, David Arnold, David
Shurtliff, David Sterz, David Vale, Dean Layton-James, Dieter Matzion, Elliot Borst,
Elliott Spira, Ephraim Baron, Erik Onnen, Gavin Cahill, Geoffrey Anderson, Ilja
Preface | xxvii
Summala, James Jackson, Jason Fuller, Jerome Hess, Jess Belliveau, John McLoughlin,
John Merritt, John Stuart, Jon Collins, Justin Kean, Keith Jarrett, Ken Boynton, Lind‐
bergh Matillano, Manish Dalwadi, Mark Butcher, Mark Richter, Marsha Shoemaker,
Martin Bleakley, Mat Ellis, Matt Finlayson, Matt Leonard, Michael Flanakin, Michele
Allesandrini, Nabil Zakaria, Naveen Chand, Pedro Silva, Phillip Coletti, Renaud
Brosse, Rich Hoyer, Rick Ochs, Sarah Grey, Sascha Curth, Shane Anderson, Stephanie
Gooch, Stephen Elliot, Tom Cross, Tom March, Tom Marrs, Tony Curry, Umang
Sehgal, Virginia Wilson, Webb Brown, Wendy Smith, and William Bryant.
Cheers to everyone who allowed us to quote them throughout the book.
xxviii | Preface
PART I
Introducing FinOps
In the first part of this book, we cover a lot of the fundamentals, such as what FinOps
is, how teams operate, the language of FinOps, how cloud services are billed, and
a roadmap to start your own FinOps journey guided by the FinOps Foundation
Framework.
Cloud FinOps: Collaborative, Real-Time Cloud Value Decision Making, 2nd Edition J.R. Storment
CHAPTER 1
What Is FinOps?
In the simplest terms, FinOps brings financial accountability to the variable spend
model of cloud. But that description merely hints at the outcome. The cultural
change of running in the cloud moves ownership of technology and financial deci‐
sion making out to the edges of the organization, from procurement to engineering,
architecture, and product teams. It empowers technology, finance, and business pro‐
fessionals to work together in more efficient ways.
Organizations around the world are moving aggressively to cloud, whether they are
ready or not. Like the transition from mainframes to client/server, to the web, or
to mobile, the shift to cloud (and from projects to products) brings with it massive
changes to the way traditional business functions need to account for, request, and
manage technology costs.
FinOps demands you acknowledge that the old ways of managing infrastructure
aren’t just ineffective; they create situations where runaway cloud costs can threaten
the business. While traditional infrastructure management methodologies will still
be needed for owned infrastructure in the future, no level of adherence to these meth‐
odologies—which don’t handle the variable consumption model of cloud well—will
allow organizations to manage cloud effectively without the introduction of FinOps.
Defining the Term “FinOps”
As of early 2023, the FinOps Foundation defines it as such:
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.
1
At its core, FinOps is a cultural practice. It’s the way for teams to manage their
cloud costs, where everyone takes ownership of their cloud usage supported by a
central best-practices group. Cross-functional teams in engineering, finance, product,
procurement, etc. work together to enable faster product delivery, while at the same
time gaining more financial control and predictability.
FinOps is a portmanteau of the words “Finance” and “DevOps,”
stressing the communications and collaboration of business and
engineering teams. Cloud FinOps is sometimes incorrectly referred
to as “Cloud Financial Operations,” but that term is falling out
of favor due to its ambiguity with the more traditional “Financial
Operations” role that exists in finance. Other synonyms for the
practice include “Cloud Financial Management,” “Cloud Financial
Engineering,” “Cloud Cost Management,” or “Cloud Optimization.”
Whatever you call it, FinOps is the practice of getting the most
business value out of your cloud spend.
This chapter discusses the core principles of FinOps, how the associated cultural
transformations began, and why every organization needs to embrace the discipline
for cloud success.
But first, let’s set the stage for defining FinOps with a typical story of an individual
practitioner’s journey.
The FinOps Hero’s Journey
Today’s FinOps leader often comes out of a world of managing, planning, and
accounting for traditional IT and virtualized servers. Here’s a typical story that is
an amalgamation of those we’ve heard over the years. It’s likely you are about to
embark on a similar journey, are currently on it, or have completed parts of it already.
The hero in this story is called Finn.
Things were pretty straightforward for Finn: backward-looking financial reports were
done quarterly, and capacity planning meant extrapolating usage trends to guess the
production needs of the organization for the next few quarters to meet changing
demands for its products. There weren’t a lot of surprises in spending.
Then Finn noticed an increasing number of AWS or Google Cloud payables coming in
without purchase orders attached. One of his cloud-savvy colleagues, Ana, explained
the highly variable nature of cloud and how it’s just, well, different than on-premises
data centers—and that there’s an entirely new way of managing it, as well as a new
professional discipline emerging to do so.
Finn carefully considered Ana’s words. It did sound interesting, and appealing. But then
Finn remembered how well the processes he had in place for the organization’s 8,000
2 | Chapter 1: What Is FinOps?
on-premises servers work. Cloud couldn’t be that different. Surely if he just applied his
existing processes more diligently, cloud costs could be managed as well.
The next quarter, cloud spending doubled unexpectedly, and Finn went back to Ana with
his tail between his legs. He committed to trying a new set of processes that look more
frequently at spend and increasing his interface time with the engineering teams creating
the spend.
All of a sudden the finance leader, who previously never cared about cloud spending,
began pushing Finn to go back to quarterly reporting, saying the real-time approach
he was taking didn’t fit with the company’s other processes. The technology leader was
pushing back, saying she couldn’t consider cost and also make her product delivery
deadlines. Finn’s executive team encouraged a top-down control methodology. Finn
again went back to Ana for help, and she led him to fellow journeyers at the FinOps
Foundation. Learning from their mistakes and wins, Finn began to lay out a plan for
how to reset the company’s processes and, more ambitiously, effect cultural change.
It was go time. Finn rolled out a new cloud spend allocation strategy, tagging guidelines,
criteria for rightsizing (i.e., resizing cloud resources to better match workload require‐
ments), and an initial rate optimization commitment to his cloud provider. There was
finally a path forward that seemed to allow him to account for the spend and the teams
to get the tech they needed without friction. Cloud migration began to soar.
Right when things seemed to be going well, a new CFO came in and said the cloud was
too expensive at scale, advocating for a widespread return to the data center. It was
time for Finn’s biggest test: working with his cloud-savvy colleagues to show that cloud is
more than a cost center. They had to show how cloud can enable innovation and velocity
in ways that on-premises data centers cannot, driving competitive advantage for the
company. The CEO saw the bigger picture and agreed, paving the way for a cloud-first
strategy.
Newly confident, Finn forged ahead, breaking down silos between teams and helping to
drive real change in the organization. But he faced one last battle: cloud spend was now
hitting material levels, affecting the bottom line. The CFO stepped in to stop the upward
trend by any means necessary to ensure the organization’s margins were not affected.
Finn moved beyond the one-dimensional view of looking only at cloud spend and shifted
to a unit economics model that tied the spend back to business value, giving him the
context to clearly demonstrate that cloud spend was on the right path.
In the end, Finn realized that this journey is just the beginning. Cloud is constantly
evolving, and FinOps with it. Finn and Ana will have the most influence in this new
field by helping to define its best practices, something they see as a key way to give back
to the community that helped them on their own journeys.
The FinOps Hero’s Journey | 3
Some aspects of this journey may resonate with you, and others may be part of your
journey ahead. Now that you’ve heard a typical story, let’s look at where FinOps
emerged.
Where Did FinOps Come From?
Trailblazers like Adobe and Intuit, early scalers in public cloud, provided the first
glimpse to the coauthors of what would become FinOps as far back as 2012 in the
Bay Area. In the mid-2010s, they interacted with larger companies like GE and Nike
as they began their own early FinOps journey tied to their rapid expansion of cloud
usage. A couple of years later, Mike saw forward-looking enterprises in Australia, like
his own Atlassian as well as others like Qantas and Tabcorp, begin similar practices.
Finally, during J.R.’s two-year tour of duty in London from 2017 to 2019, he was a
firsthand witness to enterprises like BP, HSBC, and Sainsbury’s as they developed
this new approach across their company cultures. FinOps came into being slowly
and simultaneously, all over the world, as the financial and accountability challenges
of cloud presented themselves at scale everywhere, as various industries and regions
began to adopt material amounts of cloud. Figure 1-1 traces the increasing prevalence
of the term.
Figure 1-1. Search requests for the term “FinOps” between 2018 and 2022 (source:
speakeasystrategies.com)
“FinOps” is a term that has come late to the party. In the early days, companies
simply called the practice “cloud cost management.” Later, “cloud cost optimization”
began to take hold, although it didn’t speak to the allocation challenges of cloud. AWS
and other cloud providers began using the phrase “cloud financial management,” a
4 | Chapter 1: What Is FinOps?
catch-all title that is increasingly being replaced by “FinOps” based on search and
analyst mentions referenced in the figures. Others, like the retailer Target, call their
internal practice “Engineering Efficiency.” Figure 1-2 shows increasing growth in
“FinOps” mentions by industry analysts.
Figure 1-2. Analyst articles mentions of different names for FinOps (source: speakeasy‐
strategies.com)
In Figure 1-2, you can see the recent increase in cloud analyst articles using the
term “FinOps” to describe this field of practice, as older terms like “cloud financial
management” reduce in mindshare. Choosing this compound term, which purposely
echoes DevOps, brings the vital cross-functional and agile aspect of the movement to
the forefront.
And now FinOps is becoming a standalone profession worldwide. Figure 1-3 shows
the growth in FinOps being a skill listed by members of the LinkedIn platform. The
2022 State of FinOps data showed that nearly every major industry, from Financial
Services to Retail to Manufacturing and beyond, is now running a FinOps practice.
Where Did FinOps Come From? | 5
Figure 1-3. Count of people on LinkedIn listing FinOps as a skill set
State of FinOps data in 2021 indicated that 95% of those working in
the field saw it as their likely career path.
Public job listings for FinOps practitioners at Fortune 500 enterprises ranging from
Apple to Disney to CVS Health to Nike are popping up frequently on LinkedIn and
the FinOps Foundation site.
The challenge today is less of finding a job in FinOps and more of companies finding
enough skilled candidates to fill the roles they have, driving an explosion of those
seeking FinOps certification and related skills.
6 | Chapter 1: What Is FinOps?
1 Emil Lerch and J.R. Storment, “Leveraging Cloud Transformation to Build a DevOps Culture,” AWS Public
Sector Summit, June 20, 2016, https://oreil.ly/DCqfg.
Stories from the Cloud—J.R.
I first spoke about the concept of FinOps in a DevSecOps talk1
with Emil Lerch from
AWS at the AWS Public Sector Summit in Washington, DC, back in 2016. We started
with the definition of DevOps from the venerable Gene Kim, author of The Phoenix
Project:
The term “DevOps” typically refers to the emerging professional movement that
advocates a collaborative working relationship between development and IT opera‐
tions, resulting in the fast flow of planned work (i.e., high deploy rates) while simul‐
taneously increasing the reliability, stability, resilience, and security of the production
environment.
Then, with a bit of hubris, or as an homage, I crafted a definition of FinOps based on
Kim’s:
The term “FinOps” typically refers to the emerging professional movement that
advocates a collaborative working relationship between DevOps and finance, resulting
in an iterative, data-driven management of infrastructure spending (i.e., lowering the
unit economics of cloud) while simultaneously increasing the cost efficiency and, ulti‐
mately, the profitability of the cloud environment.
Since then, the definition of FinOps has evolved and broadened, but it has retained
the all-important principles of driving a collaborative working relationship between
teams, making iterative changes using data-driven insights, and improving unit
economics.
Data-Driven Decision Making
With FinOps, each operational team (workload, service, product owner) can access
the near-real-time data they need to influence their spend and help them make
data-driven decisions that result in efficient cloud costs balanced against the speed/
performance and quality/availability of services.
If you can’t out-experiment and beat your competitors in time to market and agility, you are
sunk.... So the faster you can get those features to market and test them, the better off you’ll
be. Incidentally, you also pay back the business faster for the use of capital, which means the
business starts making money faster, too.
—Gene Kim, The Phoenix Project: A Novel About IT, DevOps, and Helping Your
Business Win (IT Revolution Press, 2013)
Data-Driven Decision Making | 7
If it seems like FinOps is about saving money, then think again. FinOps is about
making money. Cloud spend can drive more revenue, signal customer base growth,
enable more product and feature release velocity, or even help shut down a data
center.
FinOps is all about removing blockers; empowering engineering teams to deliver bet‐
ter features, apps, and migrations faster; and enabling a cross-functional conversation
about where to invest and when. Sometimes a business will decide to tighten the belt;
sometimes it’ll decide to invest more. But now teams know why they’re making those
decisions.
Real-Time Feedback (aka the “Prius Effect”)
There are three parts to a successful FinOps practice:
Real−time reporting + just−in−time processes + teams working together = FinOps
We’ll get into the second two later in the book. Right now, let’s look at the first part.
The feedback loop of real-time reporting is a powerful influence on human behavior.
In our experience, you should provide engineers with feedback on the impacts of
their actions as close as possible to the time those actions occur. This tends to create
automatic behavioral changes for the better.
Anyone who’s driven an electric car has probably experienced the Prius Effect. When
you put your foot down heavily on the pedal, an electric car’s display shows energy
flowing out of the battery into the engine. When you lift your foot up, energy flows
back into the battery. The feedback loop is obvious and instantaneous. You can see
how the choice you’re making in the moment—one that in the past may have been
unconscious—is impacting the amount of energy you’re using.
Without explicit recommendations or guidance to do so, the real-
time feedback loop instantly influences driving behavior.
These visual cues typically create an immediate effect. You start to drive a bit more
sensibly and step down a little less hard on the accelerator. You begin to realize you
don’t need to accelerate quite so fast to get where you’re going. Or, if you’re running
late, you decide that hitting the gas harder is worth the extra energy consumption. In
either case, you can now make an informed decision to use the appropriate amount
of energy to get where you need to go based on the environment in which you’re
operating.
8 | Chapter 1: What Is FinOps?
2 Ron Cuirle and Rachel Shinn, “Better Insight: Measuring the Cost of an Application on GCP,” Google Cloud
Next ’19, April 9, 2019, YouTube video, 43:55, https://oreil.ly/FJ1SP.
Ask yourself: how can we provide information that teams need to make a better decision?
—Ron Cuirle, Senior Engineering Manager at Target2
This real-time data-driven decision enablement is what FinOps is all about. In the
data center world, engineers take individual actions that can’t easily be traced to
their financial impact on the company due to long-term hardware purchases and
associated depreciation schedules.
Stories from the Cloud—J.R.
During a previous visit to one of the world’s largest cloud spenders, I learned that,
despite nine figures a year of annual cloud spend, no one was sharing those costs
with the engineers who were incurring them. When they did finally reveal those costs
to the engineering team, it was typically 30–60 days later, during an aggregate cost
center review. They had the raw data available, but because they hadn’t adopted a
culture of FinOps, they hadn’t implemented a feedback loop directly to those making
decisions about how much cloud to use.
Once they did, the results were immediate and dramatic. One of the first teams
provided with this visibility discovered that they had been spending over $200,000
per month running development environments that they really didn’t need. With only
three hours of engineering effort, they shut down those unnecessary resources and
saved enough money to hire an additional team of engineers.
The accountability provided by this new visibility revealed something quite interest‐
ing. No one gave a specific instruction or recommendation to make a change. Once
the engineering manager was able to see the cost of individual environments, she
made an informed decision that the team could do without the extra dev environ‐
ments. She hadn’t previously taken action because she didn’t have enough informa‐
tion to understand just how large the business impact of leaving the environment
running ultimately was. This early FinOps process turned cost into another efficiency
metric that engineering teams began to consider alongside other performance and
reliability metrics. Engineers tend to be averse to inefficiency and once given the right
data (and the leadership support discussed in Chapter 24) tend to optimize cost in the
same ways they do other critical metrics.
FinOps is about helping the business make better decisions while moving more
quickly. The source of this increased velocity is the frictionless conversations it
encourages between teams.
Real-Time Feedback (aka the “Prius Effect”) | 9
What made those teams great is that everyone trusted one another. It can be a powerful
thing when that magic dynamic exists.
—Gene Kim, The Phoenix Project
Teams that previously spoke different languages and kept each other at arm’s length
(e.g., engineering and finance) now build more collaborative relationships focused
on what’s best for the business. This is FinOps in action. By setting best practices
and defining a common lexicon on cloud spending as we’ll discuss in Chapter 4,
businesses enable productive trade-off conversations to happen.
Core Principles of FinOps
As we have spoken with practitioners who are successfully introducing FinOps
culture in their organizations, a common set of values or principles has emerged.
Defining FinOps values and ensuring all the process, tooling, and people align to
FinOps core principles will help lead you to success. FinOps teams that embrace these
principles will be able to establish a self-governing, cost-conscious culture within
their organizations that promotes both cost accountability and business agility to
better manage and optimize costs while maintaining the velocity and innovation
benefits of cloud. These FinOps values are:
• Teams need to collaborate.
•
— Finance and technology teams work together in near real time as the cloud
—
operates on a per-resource, per-second basis.
— Teams work together to continuously improve for efficiency and innovation.
—
• Decisions are driven by the business value of cloud.
•
— Unit economic and value-based metrics demonstrate business impact better
—
than aggregate spend.
— Make conscious trade-off decisions among cost, quality, and speed.
—
— Think of cloud as a driver of innovation.
—
• Everyone takes ownership of their cloud usage.
•
— Accountability of usage and cost is pushed to the edge, with engineers taking
—
ownership of costs from architecture design to ongoing operations.
— Individual feature and product teams are empowered to manage their own
—
usage of cloud against their budget.
— Decentralize the decision making around cost-effective architecture, resource
—
usage, and optimization.
— Technical teams must begin to consider cost as a new efficiency metric from
—
the beginning of the software development lifecycle.
10 | Chapter 1: What Is FinOps?
• FinOps reports should be accessible and timely.
•
— Process and share cost data as soon as it becomes available.
—
— Real-time visibility autonomously drives better cloud utilization.
—
— Fast feedback loops result in more efficient behavior.
—
— Consistent visibility into cloud spend is provided to all levels of the
—
organization.
— Create, monitor, and improve real-time financial forecasting and planning.
—
— Trending and variance analysis helps explain why costs increased.
—
— Internal team benchmarking drives best practices and celebrates wins.
—
— Industry peer-level benchmarking assesses your company’s performance.
—
• A centralized team drives FinOps.
•
— The central team encourages, evangelizes, and enables best practices in a
—
shared accountability model, much like security, which has a central team yet
everyone remains responsible for their portion.
— Executive buy-in for FinOps and its practices and processes is required.
—
— Rate, commitment, and discount optimization are centralized to take advan‐
—
tage of economies of scale.
— Remove the need for engineers and operations teams to think about rate
—
negotiations, allowing them to stay focused on usage optimization of their
own environments.
• Take advantage of the variable cost model of the cloud.
•
— The variable cost model of the cloud should be viewed as an opportunity to
—
deliver more value, not as a risk.
— Embrace just-in-time prediction, planning, and purchasing of capacity.
—
— Agile iterative planning is preferred over static long-term plans.
—
— Embrace proactive system design with continuous adjustments in cloud opti‐
—
mization over infrequent reactive cleanups.
When Should You Start FinOps?
Determining when to start FinOps has changed considerably since the first edition
of this book. A few years ago, the practice typically began once a company had a
spend panic moment where they inadvertently spent considerably more than they had
budgeted. Adoption of the practice has now shifted considerably earlier in the cloud
maturity lifecycle. It’s now common to see companies at the earliest stages of cloud
adoption beginning the practice. This is driven partly by a better understanding of
the challenges that cloud billing presents and also a large push by the big three cloud
When Should You Start FinOps? | 11
providers themselves to encourage their customers to get ahead of any cost problems
early on. All three have also aggressively matured the cost tools and data provided to
allow engineers and architects to consider cost as early as possible when engineering
cloud-based solutions.
Unfortunately, many still think FinOps is about saving money or reducing consump‐
tion exclusively; therefore, those people tend to believe that the right time to imple‐
ment FinOps should be measured by the amount of their cloud spend. To be fair, this
does make sense on some level. For example, a massive cloud spender could immedi‐
ately find a lot of potential savings. However, creating accountability for cloud spend
and the ability to fully allocate costs are critical components of a high-functioning
FinOps practice, which often don’t get implemented if you think about it from a
retroactive money-saving perspective.
Further, the cultural and skill set changes that FinOps requires from both engineering
teams and finance teams can take years to implement. The larger the organization
and the more complex their environments, the more they will enjoy compounded
benefits from starting the practice earlier.
A successful FinOps practice doesn’t require sizable cloud deployments or a
multimillion-dollar cloud bill. Starting FinOps early will make it much easier for
an organization to make informed decisions about cloud spend, even as its operations
are just starting to scale. Therefore, it is essential to understand FinOps maturity; the
correct approach to creating a FinOps practice is for organizations to start small and
grow in scale, scope, and complexity as business value warrants maturing an activity.
As you’ll learn in Chapter 6, it’s not possible to install a fully formed FinOps practice
from scratch, regardless of your past expertise. It takes time to transform the way
engineers work and educate finance people about how cloud operates and to get
executives onboard with the right reasons to use cloud. It’s a cultural change in ways
of working, and the muscle of data-driven accountability and decision making must
be built over time.
No one team does FinOps; the central FinOps team works to enable the many various
teams around the organization that must work together to manage the business value
of cloud. Further, teams across a large organization may be at very different places in
their FinOps journey for a long time as each reaches tipping points where individual
adoption makes sense.
Although this book can guide an organization to successful practices while helping
teams avoid common pitfalls, no organization can proceed directly from zero FinOps
to efficient FinOps. Every organization and team must implement FinOps processes
incrementally, taking the time to learn from each other as they go.
12 | Chapter 1: What Is FinOps?
Like DevOps before it, FinOps is a cultural shift, and the earlier it
starts, the sooner an organization will benefit.
Our experience has taught us that you do FinOps from day one, but you engage
more of the processes as you scale up. Over the years we have seen companies start
adopting FinOps at one of two typical times:
• Formerly, the most common approach was to implement when things went off
•
the rails. In this scenario, spending hits a point where an executive forces a hard
stop on cloud growth and demands that a new managing model be implemented.
Despite it being a common driver, this is not the ideal way to approach FinOps
adoption. Innovation and migrations slow down—or even stop temporarily—
during this executive fire drill.
• The wiser approach is taken by executives who have seen the cloud journey play
•
out and align to the FinOps maturity model on FinOps.org. The FinOps practice
needs to develop at a pace that matches the company’s position in the FinOps
maturity cycle and the company’s maturing use of cloud overall. Initially, a single
person might be assigned to manage commitments to cloud providers. They set
out to implement an initial account, label, and tagging hierarchy. From there, as
the practice gets larger, each part of the process can be scaled up. We now see
most new practitioners joining the FinOps Foundation with this adoption story.
But no matter how a company arrives at the decision to implement FinOps, the first
critical step is to begin providing visibility of cloud spend to relevant teams in a
timely manner, so everyone can begin to understand what’s happening and determine
how to address cost overruns before they become too large. In a mature practice,
cost overruns are prevented via thoughtful architecture design before they even
begin. While that level of visibility is achieved, the FinOps team starts educating the
larger business stakeholders. As cross-functional teams work together, finance people
will learn more of the language of cloud, while engineers begin to grasp relevant
financial concepts, and businesspeople can make better decisions about where to
invest resources.
The value of starting as early as possible on this cultural shift cannot be overstated,
and the benefits of a FinOps practice can be felt and measured almost immediately.
When Should You Start FinOps? | 13
Starting with the End in Mind: Data-Driven
Decision Making
One of the most important concepts in FinOps is using unit economic metrics to
enable data-driven decision making by engineering teams. The idea is to measure cloud
spend against business output or value metrics and then take action based on the
insights they provide. This is the real-time feedback loop, discussed earlier as the
Prius Effect, in action.
Choosing the right business metrics to use for each part of the infrastructure is a
complex process that’s covered in Chapter 26. For now, the main thing to remember
is that providing unit economic metrics to enable data-driven decision making relies
on almost every aspect of FinOps, including tagging, cost allocation, cost optimiza‐
tion, connectivity to other finance frameworks, and FinOps operations.
The business metric is important, because it allows you to change the conversation
from one that is just about dollars spent to one about efficiency and the value of cloud
spend. Being able to say, “It costs $X to serve customers who bring in $Y in revenue”
brings a context that helps you make the decision whether $X and $Y are reasonable
investments for the organization. Then, as products evolve or change entirely with
new features, companies are able to measure the impact of these changes via these
business metrics.
The result is being able to determine the difference between good cloud spend and
bad—and trend those decisions over time. You should keep business value metrics in
mind throughout the book and as you implement FinOps inside an organization.
The nirvana state we are building toward is for your organization to continuously
make data-driven business decisions about the value you are getting from your cloud
spend.
Stories from the Cloud—Jason Fuller
Jason Fuller, who runs Cloud at HERE Technologies, a multinational organization
providing global mapping services, shared a story at a FinOps Foundation meeting
that illustrates the point well:
We had a team way over budget using 9 billion lambda functions a month. I can’t
influence that directly. But what I can do is sit with the team and understand the
quality of the algorithm that you’re writing in lambda and determine if it can be
tighter.
Do we need that millisecond accuracy you’re providing? Yes. OK. The business now
understands it’s that valuable.
14 | Chapter 1: What Is FinOps?
Another Random Scribd Document
with Unrelated Content
Fr. Do all rooks live in rookeries?
Mr. St. It is the general nature of them to associate together, and
build in numbers on the same or adjoining trees. But this is often in
the midst of woods or natural groves. However, they have no
objections to the neighbourhood of man, but readily take to a
plantation of tall trees, though it be close to a house; and this is
commonly called a rookery. They will even fix their habitations on
trees in the midst of towns; and I have seen a rookery in a
churchyard in one of the closest parts of London.
Fr. I think a rookery is a sort of town itself.
Mr. St. It is: a village in the air, peopled with numerous inhabitants;
and nothing can be more amusing than to view them all in motion,
flying to and fro, and busied in their several occupations. The spring
is their busiest time. Early in the year they begin to repair their nests
or build new ones.
Fr. Do they all work together or every one for itself?
Mr. St. Each pair, after they have coupled, build their own nest; and
instead of helping, they are very apt to steal the materials from one
another. If both birds go out at once in search of sticks, they often
find at their return, the work all destroyed, and the materials carried
off; so that one of them generally stays at home to keep watch.
However, I have met with a story which shows that they are not
without some sense of the criminality of thieving. There was in a
rookery a lazy pair of rooks, who never went out to get sticks for
themselves, but made a practice of watching when their neighbours
were abroad, and helped themselves from their nests. They had
served most of the community in this manner and by these means
had just finished their own nest; when all the other rooks in a rage,
fell upon them at once, pulled their nest in pieces, beat them
soundly, and drove them from their society.
Fr. That was very right—I should have liked to have seen it. But why
do they live together if they do not help one another?
Mr. St. They probably receive pleasure from the company of their
own kind, as men and various other creatures do. Then, though they
do not assist one another in building, they are mutually serviceable
in many ways. If a large bird of prey hovers about a rookery for the
purpose of carrying off any of the young ones, they all unite to drive
him away. When they are feeding in a flock, several are placed as
sentinels upon the trees all round, who give the alarm if any danger
approaches. They often go a long way from home to feed; but every
evening the whole flock returns, making a loud cawing as they fly, as
if to direct and call in the stragglers. The older rooks take the lead:
you may distinguish them by the whiteness of their bills, occasioned
by their frequent digging in the ground, by which the black feathers
at the root of the bill are worn off.
Fr. Do rooks always keep to the same trees?
Mr. St. Yes; they are much attached to them, and when the trees
happen to be cut down, they seem greatly distressed, and keep
hovering about them as they are falling, and will scarcely desert
them when they lie on the ground.
Fr. Poor things! I suppose they feel as we should if our town was
burnt down or overthrown by an earthquake.
Mr. St. No doubt. The societies of animals greatly resemble those of
men; and that of rooks is like those of men in a savage state, such
as the communities of the North American Indians. It is a sort of
league for mutual aid and defence, but in which every one is left to
do as he pleases, without any obligation to employ himself for the
whole body. Others unite in a manner resembling more civilized
societies of men. This is the case with the beavers. They perform
great public works by the united efforts of the whole community,
such as damming up streams, and constructing mounds for their
habitations. As these are works of great art and labour, some of
them must probably act under the direction of others, and be
compelled to work whether they will or not. Many curious stories are
told to this purpose by those who have observed them in their
remotest haunts, where they exercise their full sagacity.
Fr. But are they all true?
Mr. St. That is more than I can answer for; yet what we certainly
know of the economy of bees may justify us in believing
extraordinary things of the sagacity of animals. The society of bees
goes farther than that of beavers, and, in some respects, beyond
most among men themselves. They not only inhabit a common
dwelling, and perform great works in common, but they lay up a
store of provision, which is the property of the whole community,
and is not used except at certain seasons, and under certain
regulations. A beehive is a true image of a commonwealth, where no
member acts for himself alone, but for the whole body.
Fr. But there are drones among them who do not work at all.
Mr. St. Yes; and at the approach of winter they are driven out of the
hive, and left to perish with cold and hunger. But I have not leisure
at present to tell you more about bees. You shall one day see them
at work in a glass hive. In the meantime, remember one thing,
which applies to all the societies of animals; and I wish it did as well
to all those of men likewise.
Fr. What is that?
Mr. St. The principle upon which they all associate, is to obtain some
benefit for the whole body, not to give particular advantages to a
few.
THE SHIP.
Charles Osborn, when at home in the holydays, had a visit from a
schoolfellow who was just entered as a midshipman on board of a
man-of-war. Tom Hardy (that was his name) was a free-hearted,
spirited lad, and a favourite among his companions; but he never
liked his book, and had left school ignorant of almost everything he
came there to learn. What was worse, he had got a contempt for
learning of all kinds, and was fond of showing it. “What does your
father mean,” says he, to Charles, “to keep you moping and studying
over things of no use in the world but to plague folks?—Why can’t
you go into his majesty’s service like me, and be made a gentleman
of? You are old enough, and I know you are a lad of spirit.” This kind
of talk made some impression upon young Osborn. He became less
attentive to the lessons his father set him, and less willing to enter
into instructive conversation. This change gave his father much
concern; but as he knew the cause, he thought it best, instead of
employing direct authority, to attempt to give a new impression to
his son’s mind, which might counteract the effect of his companion’s
suggestions.
Being acquainted with an East India captain, who was on the point
of sailing, he went with his son to pay him a farewell visit on board
his ship. They were shown all about the vessel, and viewed all the
preparations for so long a voyage. They saw her weigh anchor and
unfurl her sails; and they took leave of their friend amid the shouts
of the seamen and all the bustle of departure.
Charles was highly delighted with this scene, and as they were
returning could think and talk of nothing else. It was easy, therefore,
for his father to lead him into the following train of discourse:—
After Charles had been warmly expressing his admiration of the
grand sight of a large ship completely fitted out and getting under
sail, “I do not wonder,” said his father, “that you are so much struck
with it; it is, in reality, one of the finest spectacles created by human
skill, and the noblest triumph of art over untaught nature. Near two
thousand years ago, when Julius Cesar came over to this island, he
found the natives in possession of no other kind of vessel than a sort
of canoe, formed of wickerwork covered with hides, no bigger than a
man or two could carry. But the largest ship in Cesar’s fleet was not
more superior to these, than the Indiaman you have been seeing is
to what that was. Our savage ancestors ventured only to paddle
along the rivers and coasts, or cross small arms of the sea in calm
weather; and Cesar himself would have been alarmed to be a few
days out of sight of land. But the ship we have just left is going by
itself to the opposite side of the globe, prepared to encounter the
tempestuous winds and mountainous waves of the vast Southern
ocean, and to find its way to its destined port, though many weeks
must pass with nothing in view but sea and sky. Now what do you
think can be the cause of this prodigious difference in the powers of
man at one period and another?”
Charles was silent.
Fa. Is it not that there is a great deal more knowledge in one than in
the other?
Ch. To be sure it is.
Fa. Would it not, think you, be as impossible for any number of men
untaught, by their utmost efforts, to build and navigate such a ship
as we have seen, as to fly through the air?
Ch. I suppose it would.
Fa. That we may be the more sensible of this, let us consider how
many arts and professions are necessary for this purpose. Come—
you shall begin to name them, and if you forget any, I will put you in
mind. What is the first?
Ch. The ship-carpenter, I think.
Fa. True—what does he do?
Ch. He builds the ship.
Fa. How is that done?
Ch. By fastening the planks and beams together.
Fa. But do you suppose he can do this as a common carpenter
makes a box or set of shelves?
Ch. I do not know.
Fa. Do you not think that such a vast bulk requires a good deal of
contrivance to bring it into shape, and fit it for all its purposes?
Ch. Yes.
Fa. Some ships, you have heard, sail quicker than others—some bear
storms better—some carry more lading—some draw less water—and
so on. You do not suppose all these things are left to chance?
Ch. No.
Fa. In order to produce these effects with certainty, it is necessary to
study proportions very exactly, and to lay down an accurate scale by
mathematical lines and figures after which to build the ship. Much
has been written upon this subject, and nice calculations have been
made of the resistance a ship meets with in making way through the
water, and the best means of overcoming it; also of the action of the
wind on the sails, and their action in pushing on the ship by means
of the masts. All these must be understood by a perfect master of
ship-building.
Ch. But I think I know ship-builders who have never had an
education to fit them for understanding these things.
Fa. Very likely; but they have followed by rote the rules laid down by
others; and as they work merely by imitation, they cannot alter or
improve as occasion may require. Then, though common merchant-
ships are trusted to such builders, yet, in constructing men-of-war
and Indiamen persons of science are always employed. The French,
however, attend to this matter more than we do, and, in
consequence, their ships generally sail better than ours.
Ch. But need a captain of a ship know all these things?
Fa. It may not be absolutely necessary; yet occasions may frequently
arise in which it would be of great advantage for him to be able to
judge and give direction in these matters. But suppose the ship built
—what comes next?
Ch. I think she must be rigged.
Fa. Well—who are employed for this purpose?
Ch. Mast-makers, ropemakers, sailmakers, and I know not how
many other people.
Fa. These are all mechanical trades; and though in carrying them on
much ingenuity has been applied in the invention of machines and
tools, yet we will not stop to consider them. Suppose her, then,
rigged—what next?
Ch. She must take in her guns and powder.
Fa. Stop there and reflect how many arts you have now set to work.
Gunpowder is one of the greatest inventions of modern times, and
what has given such a superiority to civilized nations over the
barbarous? An English frigate, surrounded by the canoes of all the
savages in the world, would easily beat them off by means of her
guns; and if Cesar were to come again to England with his fleet, a
battery of cannon would sink all his ships, and set his legions a
swimming in the sea. But the making of gunpowder, and the casting
of cannon, are arts that require an exact knowledge of the science
of Chymistry.
Ch. What is that?
Fa. It comprehends the knowledge of all the properties of metals
and minerals, salts, sulphur, oils, and gums, and of the action of fire,
and water, and air upon all substances, and the effects of mixing
different things together. Gunpowder is a mixture of three things
only; saltpetre or nitre, sulphur or brimstone, and charcoal. But who
could have thought such a wonderful effect would have been
produced by it?
Ch. Was it not first discovered by accident?
Fa. Yes; but it was by one who was making chymical experiments,
and many more experiments have been employed to bring it to
perfection.
Ch. But need a captain know how to make gunpowder and cannon?
Fa. It is not necessary, though it may often be useful to him.
However, it is quite necessary that he should know how to employ
them. Now the sciences of gunnery and fortification depend entirely
upon mathematical principles; for by these are calculated the
direction of a ball through the air, the distance it would reach to, and
the force with which it will strike any thing. All engineers, therefore,
must be good mathematicians.
Ch. But I think have heard of gunners being little better than
common men.
Fa. True—there is a way of doing that business, as well as many
others, by mere practice: and an uneducated man may acquire skill
in pointing a cannon, as well as in shooting with a common gun. But
this is only in ordinary cases, and an abler head is required to direct.
Well—now suppose your ship completely fitted out for sea, and the
wind blowing fair; how will you navigate her?
Ch. I would spread the sails, and steer by the rudder.
Fa. Very well—but how would you find your way to the port you are
bound for?
Ch. That I cannot tell.
Fa. Nor, perhaps, can I make you exactly comprehend it; but I can
show you enough to convince you that it is an affair that requires
much knowledge and early study. In former times, when a vessel left
the sight of land, it was steered by observation of the sun by day,
and the moon and stars by night. The sun, you know, rises in the
east, and sets in the west; and at noon, in these parts of the world,
it is exactly south of us. These points, therefore, may be found out
when the sun shines. The moon and stars vary: however, their place
in the sky may be known by exact observation. Then, there is one
star that always points to the north pole, and is therefore called the
pole-star. This was of great use in navigation, and the word pole-star
is often used by the poets to signify a sure guide. Do you recollect
the description in Homer’s Odyssey, when Ulysses sails away by
himself from the island of Calypso—how he steers by the stars?
Ch. I think I remember the lines in Pope’s translation.
Fa. Repeat them, then.
Ch.
“Placed at the helm he sat, and mark’d the skies,
Nor closed in sleep his ever-watchful eyes;
There view’d the Pleiades, and the Northern Team,
And great Orion’s more effulgent beam,
To which, around the axle of the sky,
The Bear revolving points his golden eye:
Who shines exalted on th’ ethereal plain,
Nor bathes his blazing forehead in the main.”
Fa. Very well; they are fine lines, indeed! You see, then, how long
ago sailors thought it necessary to study astronomy. But as it
frequently happens, especially in stormy weather, that the stars are
not to be seen, this method was subject to great uncertainty, which
rendered it dangerous to undertake distant voyages. At length, near
500 years since, a property was discovered in a mineral, called the
magnet or loadstone, which removed the difficulty. This was, its
polarity, or quality of always pointing to the poles of the earth, that
is, due north and south. This it can communicate to any piece of
iron; so that a needle well rubbed in a particular manner by a
loadstone, and then balanced upon its centre so as to turn round
freely, will always point to the north. With an instrument called a
mariner’s compass, made of one of these needles, and a card
marked with all the points—north, south, east, west, and the
divisions between these, a ship may be steered to any part of the
globe.
Ch. It is a very easy matter, then.
Fa. Not quite so easy, neither. In a long voyage, cross or contrary
winds blow a ship out of her direct course, so that without nice
calculations both of the straight track she has gone, and all the
deviations from it, the sailors would not know where they were, nor
to what point to steer. It is also frequently necessary to take
observations, as they call it; that is, to observe with an instrument
where the sun’s place in the sky is at noon, by which they can
determine the latitude they are in. Other observations are necessary
to determine their longitude. What these mean, I can show you
upon the globe. It is enough now to say that, by means of both
together, they can tell the exact spot they are on at any time; and
then, by consulting their map, and setting their compass, they can
steer right to the place they want. But all this requires a very exact
knowledge of astronomy, the use of the globes, mathematics, and
arithmetic, which you may suppose is not to be acquired without
much study. A great number of curious instruments have been
invented to assist in these operations; so that there is scarcely any
matter in which so much art and science have been employed as in
navigation; and none but a very learned and civilized nation can
excel in it.
Ch. But how is Tom Hardy to do? for I am pretty sure he does not
understand any of these things.
Fa. He must learn them, if he means to come to anything in his
profession. He may, indeed, head a pressgang, or command a boat’s
crew without them; but he will never be fit to take charge of a man-
of-war, or even a merchant-ship.
Ch. However, he need not learn Latin and Greek.
Fa. I cannot say, indeed, that a sailor has occasion for those
languages; but a knowledge of Latin makes it much easier to acquire
all modern languages; and I hope you do not think them
unnecessary to him.
Ch. I did not know they were of much importance.
Fa. No! Do you think that one who may probably visit most countries
in Europe, and their foreign settlements, should be able to converse
in no other language than his own? If the knowledge of languages is
not useful to him, I know not to whom it is so. He can hardly do at
all without knowing some; and the more the better.
Ch. Poor Tom! then I doubt he has not chosen so well as he thinks.
Fa. I doubt so, too.
Here ended the conversation. They soon after reached home, and
Charles did not forget to desire his father to show him on the globe
what longitude and latitude meant.
THINGS BY THEIR RIGHT NAMES.
Charles. Papa, you grow very lazy. Last winter you used to tell us
stories, and now you never tell us any; and we are all got round the
fire quite ready to hear you. Pray, dear papa, let us have a very
pretty one.
Father. With all my heart—What shall it be?
Ch. A bloody murder, papa!
Fa. A bloody murder! Well then—once upon a time some men
dressed all alike....
Ch. With black crapes over their faces?
Fa. No; they had steel caps on.—having crossed a dark heath,
wound cautiously along the skirts of a deep forest....
Ch. They were ill-looking fellows, I dare say?
Fa. I cannot say so; on the contrary, they were as tall, personable
men as most one shall see: leaving on their right hand an old ruined
tower on the hill....
Ch. At midnight, just as the clock struck twelve; was it not, papa?
Fa. No, really; it was on a fine balmy summer’s morning;—they
moved forward, one behind another....
Ch. As still as death, creeping along under the hedges?
Fa. On the contrary—they walked remarkably upright; and so far
from endeavouring to be hushed and still, they made a loud noise as
they came along, with several sorts of instruments.
Ch. But, papa, they would be found out immediately.
Fa. They did not seem to wish to conceal themselves: on the
contrary, they gloried in what they were about. They moved forward,
I say, to a large plain, where stood a neat pretty village which they
set on fire.
Ch. Set a village on fire, wicked wretches!
Fa. And while it was burning they murdered—twenty thousand men.
Ch. O fie! papa! You don’t intend I should believe this; I thought all
along you were making up a tale, as you often do; but you shall not
catch me this time. What! they lay still, I suppose, and let these
fellows cut their throats?
Fa. No, truly, they resisted as long as they could.
Ch. How should these men kill twenty thousand people, pray?
Fa. Why not? the murderers were thirty thousand.
Ch. O, now I have found you out! you mean a BATTLE.
Fa. Indeed I do. I do not know any murders half so bloody.
EVENING IX.
THE TRANSMIGRATIONS OF INDUR.
At the time when fairies and genii possessed the powers which they
have now lost, there lived in the country of the Bramins, a man
named Indur, who was distinguished, not only for that gentleness of
disposition and humanity towards all living creatures, which are so
much cultivated among those people, but for an insatiable curiosity
respecting the nature and way of life of all animals. In pursuit of
knowledge of this kind he would frequently spend the night among
lonely rocks, or in the midst of thick forests; and there under shelter
of a hanging cliff, or mounted upon a high tree, he would watch the
motions and actions of all the animals that seek their prey in the
night; and remaining in the same spot till the break of day, he would
observe this tribe of creatures retiring to their dens, and all others
coming forth to enjoy the beams of the rising sun. On these
occasions, if he saw any opportunity of exercising his benevolence
toward animals in distress, he never failed to make use of it; and
many times rescued the small bird from the pitiless hawk, and the
lamb or kid from the gripe of the wolf and lynx. One day as he was
sitting on a tree in the forest, a little frolicsome monkey, in taking a
great leap from one bough to another, chanced to miss its hold, and
fell from a great height to the ground. As it lay there unable to
move, Indur espied a large venomous serpent advancing to make
the poor defenceless creature his prey. He immediately descended
from his post, and taking the little monkey in his arms, ran with it to
the tree, and gently placed it upon a bough. In the meantime, the
enraged serpent pursuing him, overtook him before he could mount
the tree, and bit him in the leg. Presently, the limb began to swell,
and the effects of the venom became visible over Indur’s whole
frame. He grew faint, sick, and pale; and sinking on the ground was
sensible that his last moments were fast approaching. As thus he lay,
he was surprised to hear a human voice from the tree; and looking
up, he beheld, on the bow where he had placed the monkey, a
beautiful woman, who thus addressed him:—“Indur, I am truly
grieved that thy kindness to me should have been the cause of thy
destruction. Know that, in the form of the poor monkey, it was the
potent fairy Perizinda to whom thou gavest succour. Obliged to pass
a certain number of days every year under the shape of an animal, I
have chosen this form; and though not mortal, I should have
suffered extreme agonies from the bite of the serpent, hadst thou
not so humanely assisted me. It is not in my power to prevent the
fatal effect of the poison; but I am able to grant thee any wish thou
shalt form respecting the future state of existence to which thou art
now hastening. Speak then, before it be too late, and let me show
my gratitude.”—“Great Perizinda!” replied Indur, “since you deign so
bounteously to return my service, this is the request that I make; in
all my transmigrations may I retain a rational soul, with the memory
of the adventures I have gone through; and when death sets me
free from one body, may I instantly animate another in the prime of
its powers and faculties, without passing through the helpless state
of infancy.”—“It is granted,” answered the fairy; and immediately,
breaking a small branch from the tree, and breathing on it, she
threw it down to Indur, and bid him hold it fast in his hand. He did
so, and presently expired.
Instantly, he found himself in a green valley, by the side of a clear
stream, grazing amid a herd of antelopes. He admired his elegant
shape, sleek, spotted skin, and polished spiral horns; and drank with
delight of the cool rivulet, cropped the juicy herb, and sported with
his companions. Soon an alarm was given of the approach of an
enemy; and they all set off with the swiftness of the wind, to the
neighbouring immense plains, where they were presently out of the
reach of injury. Indur was highly delighted with the ease and rapidity
of his motions; and snuffing the keen air of the desert, bounded
away, scarcely deigning to touch the ground with his feet. This way
of life went on very pleasantly for some time, till at length the herd
was one morning alarmed with noises of trumpets, drums, and loud
shouts on every side. They started, and ran first to the right, then to
the left, but were continually driven back by the surrounding crowd,
which now appeared to be a whole army of hunters, with the king of
the country, and all his nobles, assembled at a solemn chase, after
the manner of the Eastern people. And now the circle began to
close, and numbers of affrighted animals of various kinds thronged
together in the centre, keeping as far as possible from the dangers
that approached them from all quarters. The huntsmen were now
come near enough to reach their game with their arrows; and the
prince and his lords shot at them as they passed and repassed,
killing and wounding great numbers. Indur and his surviving
companions, seeing no other means of escape, resolved to make a
bold push toward that part of the ring which was the most weakly
guarded; and though many perished in the attempt, yet a few,
leaping over the heads of the people, got clear away: Indur was
among the number. But while he was scouring over the plain,
rejoicing in his good fortune and conduct, an enemy swifter than
himself overtook him. This was a falcon, who, let loose by one of the
huntsmen, dashed like lightning after the fugitives; and alighting
upon the head of Indur, began to tear his eyes with his beak, and
flap his wings over his face. Indur, terrified and blinded, knew not
which way he went; and instead of proceeding straight-forward,
turned round and came again toward the hunters. One of these,
riding full speed with a javelin in his hand, came up to him, and ran
the weapon into his side. He fell down, and with repeated wounds
was soon despatched.
When the struggle of death was over, Indur was equally surprised
and pleased on finding himself soaring high in the air, as one of a
flight of wild geese, in their annual migration to breed in the arctic
regions. With vast delight he sprung forward on easy wing through
the immense fields of air, and surveyed beneath him extensive tracts
of earth perpetually varying with plains, mountains, rivers, lakes,
and woods. At the approach of night the flock lighted on the ground,
and fed on the green corn or grass; and at daybreak they were
again on the wing, arranged in regular wedge-like body, with an
experienced leader at their head. Thus for many days they continued
their journey, passing over countries inhabited by various nations, till
at length they arrived in the remotest part of Lapland, and settled in
a wide marshy lake, filled with numerous reedy islands, and
surrounded on all sides with dark forests of pine and birch. Here, in
perfect security from man and hurtful animals, they followed the
great business of breeding and providing for their young, living
plentifully upon the insects and aquatic reptiles that abounded in this
sheltered spot. Indur with great pleasure exercised his various
powers of swimming, diving, and flying; sailing round the islands,
penetrating into every creek and bay, and visiting the deepest
recesses of the woods. He surveyed with astonishment the sun,
instead of rising and setting, making a complete circle in the
heavens, and cheering the earth with a perpetual day. Here he met
with innumerable tribes of kindred birds varying in size, plumage,
and voice, but all passing their time in a similar manner, and
furnished with the same powers for providing food and a safe retreat
for themselves and their young. The whole lake was covered with
parties fishing or sporting, and resounded with their loud cries; while
the islands were filled with their nests, and new broods of young
were continually coming forth and launching upon the surface of the
waters. One day, Indur’s curiosity having led him at a distance from
his companions to the woody border of the lake, he was near paying
dear for his heedlessness; for a fox, that lay in wait among the
bushes, sprung upon him, and it was with the utmost difficulty that
by a strong exertion he broke from his hold, not without the loss of
some feathers.
Summer now drawing to an end, the vast congregation of water-fowl
begun to break up; and large bodies of them daily took their way
southward, to pass the winter in climates where the waters are
never so frozen as to become uninhabitable by the feathered race.
The wild geese, to whom Indur belonged, proceeded with their
young ones, by long daily journeys across Sweden, the Baltic sea,
Poland and Turkey, to Lesser Asia, and finished their journey at the
celebrated plains on the banks of the Cayster, a noted resort for their
species ever since the age of Homer, who in some very beautiful
verses has described the manners and actions of the various tribes
of aquatic birds in that favourite spot.[1]
Here they soon recruited
from the fatigue of their march, and enjoyed themselves in the
delicious climate till winter. This season, though here extremely mild,
yet making the means of sustenance somewhat scarce, they were
obliged to make foraging excursions to the cultivated lands in the
neighbourhood. Having committed great depredations upon a fine
field of young wheat, the owner spread a net on the ground, in
which Indur, with several of his companions, had the misfortune to
be caught. No mercy was shown them, but as they were taken out
one by one, their necks were all broken.
1.
Not less their number than th’ embodied cranes,
Or milk-white swans on Asia’s wat’ry plains,
That o’er the windings of Cayster’s springs
Stretch their long necks, and clap their rustling wings
Now tower aloft, and course in airy rounds;
Now light with noise; with noise the field resounds.—Pope’s Homer.
Indur was not immediately sensible of the next change he
underwent, which was into a dormouse, fast asleep into a hole at
the foot of a bush. As it was in a country where the winter was
pretty severe, he did not awake for some weeks; when a thaw
having taken place, and the sun beginning to warm the earth, he
unrolled himself one day, stretched, opened his eyes, and not being
able to make out where he was, he roused a female companion
whom he found by his side. When she was sufficiently awakened,
and they both began to feel hungry, she led the way to a magazine
of nuts and acorns, where they made a comfortable meal, and soon
fell asleep again. This nap having lasted a few days, they awaked a
second time, and having eaten, they ventured to crawl to the mouth
of their hole, where, pulling away some withered grass and leaves,
they peeped out into the open air. After taking a turn or two in the
sun, they grew chill, and went down again, stopping up the entrance
after them. The cold weather returning, they took another long nap,
till, at length, spring being fairly set in, they roused in earnest, and
began to make daily excursions abroad. Their winter-stock of
provisions being now exhausted, they were for some time reduced
to great straits, and obliged to dig for roots and pig-nuts. Their fare
was mended as the season advanced, and they made a nest near
the bottom of a tree, where they brought up a young family. They
never ranged far from home, nor ascended the higher branches of
the tree, and passed great part of their time in sleep, even during
the midst of summer. When autumn came, they were busily
employed in collecting the nuts, acorns, and other dry fruits that fell
from the trees, and laying them up in their storehouses
underground. One day, as Indur was thus closely engaged at some
distance from his dwelling, he was seized by a wildcat, who, after
tormenting him for a time, gave him a gripe, and put him out of his
pain.
From one of the smallest and most defenceless of animals, Indur
found himself instantly changed into a majestic elephant, in a lofty
forest in the isle of Ceylon. Elated with this wonderful advancement
in the scale of creation, he stalked along with conscious dignity, and
surveyed with pleasing wonder his own form and that of his
companions, together with the rich scenery of the ever-verdant
woods, which perfumed the air with their spicy odour, and lifted their
tall heads to the clouds. Here, fearing no injury, and not desirous to
do any, the gigantic herd roamed at large, feeding on the green
branches which they tore down with their trunks, and bathing in
deep rivers during the heat of the day; and, reposing in the depths
of the forests, reclined against the massy trunks of trees by night. It
was long before Indur met with any adventure that could lead him
to doubt his security. But, one day, having penetrated into a close
entangled thicket, he espied, lurking under the thick covert, a grim
tiger, whose eyes flashed rage and fury. Though the tiger was one of
the largest of his species, yet his bulk was trifling compared with
that of an elephant, a single foot of which seemed sufficient to crush
him; yet the fierceness and cruelty of his looks, his angry growl, and
grinning teeth, struck some terror into Indur. There was little time,
however, for reflection: for when Indur had advanced a single step,
the tiger, setting up a roar, sprung to meet him, attempting to seize
his lifted trunk. Indur was dexterous enough to receive him upon
one of his tusks, and exerting all his strength, threw the tiger to a
great distance. He was somewhat stunned by the fall, but
recovering, renewed the assault with redoubled fury. Indur again,
and a third time, threw him off; after which the tiger, turning about,
bounded away into the midst of the thicket. Indur drew back, and
rejoined his companions, with some abatement in the confidence he
had placed in his size and strength, which had not prevented him
from undergoing so dangerous an attack.
Soon after, he joined the rest of the herd, in an expedition beyond
the bounds of the forest, to make depredations on some fields of
maize. They committed great havoc, devouring part, but tearing up
and trampling down much more; when the inhabitants taking the
alarm, assembled in great numbers, and with fierce shouts and
flaming brands drove them back to the woods. Not contented with
this, they were resolved to make them pay for the mischief they had
done, by taking some prisoners. For this purpose they enclosed a
large space among the trees with strong posts and stakes, bringing
it to a narrower and narrower compass, and ending at last in a
passage only capable of admitting one elephant at a time. This was
divided into several apartments, by strong cross-bars, which would
lift up and down. They then sent out some tame female elephants
bred to the business, who approaching the herd of wild ones,
inveigled the males to follow them toward the enclosures. Indur was
among the first who was decoyed by their artifices; and with some
others following heedlessly, he got into the narrowest part of the
enclosure, opposite to the passage. Here they stood awhile,
doubting whether they should go farther. But the females leading
the way, and uttering their cry of invitation, they ventured at length
to follow. When a sufficient number was in the passage, the bars
were let down by men placed for that purpose, and the elephants
were fairly caught in a trap. As soon as they were sensible of their
situation, they fell into a fit of rage, and with all their efforts
endeavoured to break through. But the hunters throwing nooses
over them, bound them fast with strong ropes and chains to the post
on each side, and thus kept them without food or sleep for three
days; when being exhausted with hunger and fatigue, they gave
signs of sufficient tameness. They were now let out one by one, and
bound each of them to two large tame elephants with riders on their
backs, and thus without resistance were led away close prisoners.
They were then put into separate stables, and by proper discipline,
were presently rendered quite tame and gentle.
Not long after, Indur, with five more, was sent over from Ceylon to
the continent of India, and sold to one of the princes of the country.
He was now trained to all the services elephants are there employed
in; which were, to carry people on his back in a kind of sedan, or
litter, to draw cannon, ships, and other great weights, to kneel and
rise at command, make obeisance to his lord, and perform all the
motions and attitudes he was ordered. Thus he lived a long time
well fed and caressed, clothed in costly trappings on days of
ceremony, and contributing to the pomp of Eastern royalty. At
length, a war broke out, and Indur came to be employed in a
different scene. After proper training he was marched with a number
of his fellows, into the field, bearing on his back a small wooden
tower, in which were placed some soldiers with a small field-piece.
They soon came in sight of the enemy, and both sides were drawn
up for battle. Indur and the rest were urged forward by their leaders
wondering at the same time at the scene in which they were
engaged, so contrary to their nature and manners. Presently, all was
involved in smoke and fire. The elephants advancing, soon put to
flight those who were drawn up before them; but their career was
stopped by a battery of cannon, which played furiously against
them. Their vast bodies offered a fair mark to the balls, which
presently struck down some, and wounded others. Indur received a
shot on one of his tusks, which broke it, and put him to such pain
and affright, that, turning about, he ran with all speed over the
plain; and falling in with a body of their own infantry, he burst
through, trampling down whole ranks, and filling them with terror
and confusion. His leader having now lost all command over him,
and finding him hurtful to his own party, applied the sharp
instrument he carried to the nape of his neck, and driving it in with
all his force, pierced his spinal marrow, so that he fell lifeless to the
ground.
In the next stage of his existence, Indur, to his great surprise, found
even the vast bulk of the elephant prodigiously exceeded; for he was
now a whale of the largest species, rolling in the midst of the arctic
seas. As he darted along, the lash of his tail made whirlpools in the
mighty deep. When he opened his immense jaws he drew in a flood
of brine, which, on rising to the surface, he spouted out again in a
rushing fountain, that rose high in the air with the noise of a mighty
cataract. All the other inhabitants of the ocean seemed as nothing to
him. He swallowed, almost without knowing it, whole shoals of the
smaller kinds; and the larger swiftly turned aside at his approach.
“Now,” he cried to himself, “whatever other evils await me, I am
certainly secure from the molestation of other animals; for what is
the creature that can dare to cope with me, or measure his strength
with mine?” Having said this, he saw swimming near him a fish not a
quarter of his length, armed with a dreadful row of teeth. This was a
grampus, which directly flying upon Indur, fastened on him, and
made his great teeth meet in his flesh. Indur roared with pain, and
lashed the sea, till it was all in a foam, but could neither reach nor
shake off his cruel foe. He rolled over and over, rose and sunk, and
exerted all his boasted strength; but to no purpose. At length, the
grampus quitted his hold, and left him not a little mortified with the
adventure. This was, however, forgotten, and Indur received
pleasure from his new situation, as he roamed through the
boundless fields of ocean, now diving to its very bottom, now
shooting swiftly to its surface, and sporting with his companions in
unwieldly gambols. Having chosen a mate, he took his course with
her southward, and, in due time, brought up two young ones, of

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Cloud FinOps: Collaborative, Real-Time Cloud Value Decision Making, 2nd Edition J.R. Storment

  • 1. Cloud FinOps: Collaborative, Real-Time Cloud Value Decision Making, 2nd Edition J.R. Storment install download https://ebookmeta.com/product/cloud-finops-collaborative-real- time-cloud-value-decision-making-2nd-edition-j-r-storment-2/ Download more ebook from https://ebookmeta.com
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  • 5. J.R. Storment & Mike Fuller S e c o n d E d i t i o n Cloud FinOps Collaborative, Real-Time Cloud Value Decision Making Compliments of
  • 6. CLOUD COMPUTING “Adoption of FinOps requires both executive and ground level support. This edition of the definitive guide to FinOps lays out playbooks for how to create a partnership with engineering teams, how to accurately forecast spend, using data from other frameworks to influence decisions, and how ultimately cultural changes trump mandates.” —BethMarki Executive Director of Cloud Financial Management at JPMorgan Chase Cloud FinOps US $79.99 CAN $99.99 ISBN: 978-1-492-09835-5 Twitter: @oreillymedia linkedin.com/company/oreilly-media youtube.com/oreillymedia FinOps brings financial accountability to the variable spend model of cloud. Used by the majority of global enterprises, this management practice has grown from a fringe activity to the de facto discipline managing cloud spend. In this book, authors J.R. Storment and Mike Fuller outline the process of building a culture of cloud FinOps by drawing on real-world successes and failures of large-scale cloud spenders. Engineering and finance teams, executives, and FinOps practitioners alike will learn how to build an efficient and effective FinOps machine for data-driven cloud value decision-making. Complete with a road map to get you started, this revised second edition includes new chapters that cover forecasting, sustainability, and connectivity to other frameworks. You’ll learn: • A road map to build a culture of FinOps with executive support • How to understand and forecast your cloud spending • How to empower engineering and finance to partner • Cost allocation strategies to create accountability for cloud and container spend • Strategies for rate discounts from cloud commitments • When and how to implement automation of repetitive cost tasks • How to empower engineering team action on cost efficiency • How to use unit economics to guide data-driven decision-making J.R. Storment is Executive Director of the FinOps Foundation. He works with the largest cloud consumers in the world to advance their people through community, education, and standards. Mike Fuller is principal engineer on the cloud FinOps team at Atlassian in Australia, developing FinOps practice and enabling engineering teams to efficiently remain in control of cloud spend. ISBN: 978-1-098-13532-4
  • 8. Praise for CloudFinOps Security is Job 0, FinOps is Job 0.5. Just as security is everyone’s job, so too is FinOps. The second edition of the Cloud FinOps book provides a recipe for FinOps success. —Marit Hughes, Deloitte FinOps brings business, finance, and engineering together to drive a culture of transparency and accountability for cloud spend management. Google Cloud and the Finops Foundation are working together to pioneer open billing standards for further transparency and acceleration of cloud business value. This book synthesizes those collaborative efforts. —Mich Razon, VP & GM, Head of Commerce Platforms at Google Cloud Optimizing cost is critical to the success of cloud migrations and the move to consumptive models. Cloud optimization should be a key area of focus for companies. The FinOps book lays out a road map for how to drive the cultural change that is required across the technology, finance, and business organizations of an enterprise running at scale in the cloud. —Fred Delombaerde, VP Core Commerce at Microsoft Today, public cloud cost management transcends any individual vendor. Large organizations need to normalize and merge a variety of vendor costs and usage data into a single view, to enable data-driven decisions by engineering, business, and finance. It is essential that the FinOps Foundation continues to iterate on the FinOps framework and facilitate the creation of an open standard that vendors can then use to consistently present their cost and usage data, to enable the work of FinOps practitioners. —Udam Dewaraja, Head of Cloud Financial Management at Citi
  • 9. Any company looking to optimize cloud costs should first turn to the Cloud FinOps book and second to the materials and community of the FinOps Foundation. Together these resources have helped to lay a successful foundation for Target Corporation’s FinOps practice. We have leveraged the FinOps domains and capabilities to build tools for leaders and engineers. With the seven new chapters included in the Cloud FinOps second edition, including key concepts like putting “Data in the Path of the Engineer” and leveraging the “UI of FinOps,” we will mature our FinOps practice and adoption for our public and private cloud utilization. —Kim Wier, Director of Engineering, Target Corporation FinOps as a theory may be hard for some execs to grasp. Leadership is much more likely to back an effort that has already shown demonstrated, quantified success. Prove the value and you’ll get the backing you seek. The new chapters in the FinOps book, such as the “UI of FinOps” and “Adopting FinOps,” give invaluable insights into how to drive engineering action on cost efficiency and gain executive support. —Jason Rhoades, Intuit Adoption of FinOps requires both executive and ground level support. This edition of the definitive guide to FinOps lays out playbooks for how to create a partnership with engineering teams, how to accurately forecast spend, using data from other frameworks to influence decisions, and how ultimately cultural changes trump mandates. —Beth Marki, Executive Director of Cloud Financial Management at JPMorgan Chase FinOps has emerged as a new model to define the future of how finance and technical teams partner together. The Cloud FinOps book has provided a road map for those organizations looking to evolve the way they manage and optimize cloud expenditures, without slowing technical teams and innovation. This is a must- read for both finance and technical teams to help them understand their role in the world of cloud financial management! —Keith Jarrett, Cloud Financial Management Leader
  • 10. J.R. Storment and Mike Fuller Cloud FinOps Collaborative, Real-Time Cloud Value Decision Making SECOND EDITION Boston Farnham Sebastopol Tokyo Beijing Boston Farnham Sebastopol Tokyo Beijing
  • 11. 978-1-098-13532-4 [LSI] Cloud FinOps, Second Edition by J.R. Storment and Mike Fuller Copyright © 2023 J.R. Storment and Mike Fuller. All rights reserved. Printed in the United States of America. Published by O’Reilly Media, Inc., 1005 Gravenstein Highway North, Sebastopol, CA 95472. O’Reilly books may be purchased for educational, business, or sales promotional use. Online editions are also available for most titles (http://oreilly.com). For more information, contact our corporate/institutional sales department: 800-998-9938 or [email protected]. Acquisitions Editor: John Devins Development Editor: Corbin Collins Production Editor: Kate Galloway Copyeditor: nSight, Inc. Proofreader: Piper Editorial Consulting, LLC Indexer: nSight, Inc. Interior Designer: David Futato Cover Designer: Karen Montgomery Illustrator: Kate Dullea December 2019: First Edition January 2023: Second Edition Revision History for the Second Edition 2023-01-18: First Release See http://oreilly.com/catalog/errata.csp?isbn=9781492098355 for release details. The O’Reilly logo is a registered trademark of O’Reilly Media, Inc. Cloud FinOps, the cover image, and related trade dress are trademarks of O’Reilly Media, Inc. The views expressed in this work are those of the authors, and do not represent the publisher’s views. While the publisher and the authors have used good faith efforts to ensure that the information and instructions contained in this work are accurate, the publisher and the authors disclaim all responsibility for errors or omissions, including without limitation responsibility for damages resulting from the use of or reliance on this work. Use of the information and instructions contained in this work is at your own risk. If any code samples or other technology this work contains or describes is subject to open source licenses or the intellectual property rights of others, it is your responsibility to ensure that your use thereof complies with such licenses and/or rights. This work is part of a collaboration between O’Reilly and VMware. See our statement of editorial independence.
  • 12. For Our Families To Jessica and Oliver of the Triangle for being patient and supportive the second time around too. And to Wiley, whose impact we feel daily. —J.R. Lesley, Harrison, and Claire, without your love and support this would have never been possible. —Mike
  • 14. Table of Contents Preface. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxi Part I. Introducing FinOps 1. What Is FinOps?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Defining the Term “FinOps” 1 The FinOps Hero’s Journey 2 Where Did FinOps Come From? 4 Data-Driven Decision Making 7 Real-Time Feedback (aka the “Prius Effect”) 8 Core Principles of FinOps 10 When Should You Start FinOps? 11 Starting with the End in Mind: Data-Driven Decision Making 14 Conclusion 15 2. Why FinOps?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Use Cloud for the Right Reasons 17 Cloud Spend Keeps Accelerating 19 The Impact of Not Adopting FinOps 21 Informed Ignoring: Why Start Now? 23 Conclusion 26 3. Cultural Shift and the FinOps Team. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Deming on Business Transformation 29 Who Does FinOps? 30 Why a Centralized Team? 32 ix
  • 15. The FinOps Team Doesn’t Do FinOps 33 The Role of Each Team in FinOps 34 Executives and Leadership 34 Engineering and Developers 35 Finance 35 Procurement and Sourcing 35 Product or Business Teams 35 FinOps Practitioners 36 A New Way of Working Together 36 Where Does Your FinOps Team Report? 36 Understanding Motivations 38 Engineers 38 Finance People 39 Executives and Leadership 40 Procurement and Sourcing People 40 FinOps Throughout Your Organization 41 Hiring for FinOps 41 FinOps Culture in Action 43 Difficulty Motivating People Is Not New 44 Contributors to Action 46 Detractors from Action 46 Tipping the Scales in Your Favor 46 Conclusion 47 4. The Language of FinOps. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Defining a Common Lexicon 50 Defining the Basic Terms 51 Defining Finance Terms for Cloud Professionals 54 Abstraction Assists Understanding 56 Cloud Language Versus Business Language 58 Creating a Universal Translator Between Your DevOps and Finance Teams 59 The Need to Educate All the Disciplines 60 Benchmarking and Gamification 60 Conclusion 61 5. Anatomy of the Cloud Bill. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Types of Cloud Bill 63 Cloud Billing Complexity 64 Basic Format of Billing Data 65 Time, Why Do You Punish Me? 67 Sum of the Tiny Parts 68 x | Table of Contents
  • 16. A Brief History of Cloud Billing Data 69 The Importance of Hourly Data 72 A Month Is Not a Month 72 A Dollar Is Not a Dollar 73 Two Levers to Affect Your Bill 73 Who Should Avoid Costs and Who Should Reduce Rates? 74 Centralizing Rate Reduction 75 Why You Should Decentralize Usage Reduction 76 Conclusion 77 6. Adopting FinOps. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 A Confession 80 Different Executive Pitches for Different Levels 81 Starting Pitch 82 Advancing Pitch 83 Sample Headcount Plan for Advancing a FinOps Team 85 Pitching the Executive Sponsor 86 Playing to Your Audience 87 Key Personas That the Driver Must Influence 88 CEO Persona 88 CTO/CIO Persona 89 CFO Persona 89 Engineering Lead Persona 89 Roadmap for Getting Adoption of FinOps 90 Stage 1: Planning for FinOps in an Organization 90 Stage 2: Socializing FinOps for Adoption in an Organization 92 Stage 3: Preparing the Organization for FinOps 94 Type of Alignment to the Organization 95 Full Time, Part Time, Borrowed Time: A Note on Resources 96 A Complex System Designed from Scratch Never Works 97 Conclusion 97 7. The FinOps Foundation Framework. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 An Operating Model for Your Practice 100 The Framework Model 100 Principles 101 Personas 101 Maturity 102 Phases 102 Domains and Capabilities 102 Structure of a Domain 103 Table of Contents | xi
  • 17. Structure of Capabilities 104 Adapting the Framework to Fit Your Needs 106 Connection to Other Frameworks/Models 107 Conclusion 108 8. The UI of FinOps. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 Build Versus Buy Versus Native 109 When to Use Native Tooling 110 When to Build 111 Why to Buy 112 Operationalized Reporting 114 Data Quality 114 Perfect Is the Enemy of Good 116 Report Tiering 116 Rolling Out Changes 118 The Universal Report 118 Accessibility 119 Color 120 Visual Hierarchy 120 Usability and Consistency 120 Language 121 Consistency of Color and Visual Representation 121 Recognition Versus Recall 121 Psychological Concepts 122 Anchoring Bias 122 Confirmation Bias 123 The Von Restorff Effect 124 Hick’s Law 125 Perspectives on Reports 126 Personas 126 Maturity 126 Multicloud 127 Putting Data in the Path of Each Persona 127 Data in the Path of Finance 128 Data in the Path of Leadership 128 Data in the Path of Engineers 128 Connecting FinOps to the Rest of the Business 129 Seek First to Understand 129 Conclusion 131 xii | Table of Contents
  • 18. Part II. Inform Phase 9. The FinOps Lifecycle. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 The Six Principles of FinOps 135 #1: Teams Need to Collaborate 136 #2: Decisions Are Driven by the Business Value of Cloud 136 #3: Everyone Takes Ownership of Their Cloud Usage 136 #4: FinOps Reports Should Be Accessible and Timely 136 #5: A Centralized Team Drives FinOps 137 #6: Take Advantage of the Variable Cost Model of the Cloud 137 The FinOps Lifecycle 138 Inform 139 Optimize 141 Operate 142 Considerations 144 Where Do You Start? 145 You Don’t Have to Find All the Answers 145 Conclusion 146 10. Inform Phase: Where Are You Right Now?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147 Data Is Meaningless Without Context 147 Seek First to Understand 148 Organizational Work During This Phase 150 Transparency and the Feedback Loop 150 Benchmarking Team Performance 152 What Great Looks Like 153 Conclusion 154 11. Allocation: No Dollar Left Behind. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155 Why Allocation Matters 155 Amortization: It’s Accrual World 156 Creating Goodwill and Auditability with Accounting 158 The “Spend Panic” Tipping Point 159 Spreading Out Shared Costs 160 Chargeback Versus Showback 162 A Combination of Models Fit for Purpose 163 Accounts, Tagging, Account Organization Hierarchies 164 The Showback Model in Action 165 Chargeback and Showback Considerations 166 Conclusion 166 Table of Contents | xiii
  • 19. 12. Tags, Labels, and Accounts, Oh My!. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169 Tag- and Hierarchy-Based Approaches 170 Getting Started with Your Strategy 172 Communicate Your Plan 172 Keep It Simple 172 Formulate Your Questions 173 Comparing the Allocation Options of the Big Three 173 Comparing Accounts and Folders Versus Tags and Labels 174 Organizing Accounts and Projects into Groups 175 Tags and Labels: The Most Flexible Allocation Option 176 Using Tags for Billing 177 Getting Started Early with Tagging 178 Deciding When to Set Your Tagging Standard 178 Picking the Right Number of Tags 179 Working Within Tag/Label Restrictions 180 Maintaining Tag Hygiene 181 Reporting on Tag Performance 182 Getting Teams to Implement Tags 182 Conclusion 183 13. Accurate Forecasting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 The State of Cloud Forecasting 186 Forecasting Methodologies 187 Forecasting Models 189 Cloud Forecasting Challenges 189 Manual Versus Automated Forecasts 190 Inaccuracies 190 Granularity 190 Forecast Frequency 192 Communication 193 Future Projects 194 Cost Estimation 195 Impacts of Cost Optimization on Forecasts 196 Forecast and Budgeting 198 The Importance of Managing Teams to Budgets 199 Conclusion 202 xiv | Table of Contents
  • 20. Part III. Optimize Phase 14. Optimize Phase: Adjusting to Hit Goals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205 Why Do You Set Goals? 205 The First Goal Is Good Cost Allocation 206 Is Savings the Goal? 206 The Iron Triangle: Good, Fast, Cheap 207 Hitting Goals with OKRs 208 OKR Focus Area #1: Credibility 209 OKR Focus Area #2: Maintainable 209 OKR Focus Area #3: Control 209 Goals as Target Lines 211 Budget Variances 213 Using Less Versus Paying Less 214 Conclusion 215 15. Using Less: Usage Optimization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 The Cold Reality of Cloud Consumption 217 Where Does Waste Come From? 219 Usage Reduction by Removing/Moving 220 Usage Reduction by Resizing (Rightsizing) 221 Common Rightsizing Mistakes 223 Relying on Recommendations That Use Only Averages or Peaks 223 Failing to Rightsize Beyond Compute 225 Not Addressing Your Resource “Shape” 225 Not Simulating Performance Before Rightsizing 225 Hesitating Due to Reserved Instance Uncertainty 226 Going Beyond Compute: Tips to Control Cloud Costs 226 Block Storage 226 Object Storage 228 Networking 229 Usage Reduction by Redesigning 229 Scaling 229 Scheduled Operations 230 Effects on Reserved Instances 230 Benefit Versus Effort 231 Serverless Computing 232 Not All Waste Is Waste 233 Maturing Usage Optimization 235 Advanced Workflow: Automated Opt-Out Rightsizing 236 Table of Contents | xv
  • 21. Tracking Savings 239 Conclusion 241 16. Paying Less: Rate Optimization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243 Compute Pricing 243 On-Demand/Pay-As-You-Go 244 Spot Resource Usage 244 Commitment-Based Discounts 245 Storage Pricing 245 Volume/Tiered Discounts 246 Usage-Based 246 Time-Based 247 Negotiated Rates 248 Custom Pricing 248 Seller Private Offers 249 BYOL Considerations 249 Conclusion 250 17. Understanding Commitment-Based Discounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251 Introduction to Commitment-Based Discounts 251 Commitment-Based Discount Basics 253 Compute Instance Size Flexibility 255 Conversions and Cancellations 257 Overview of Usage Commitments Offered by the Big Three 258 Amazon Web Services 258 What Does an RI Provide? 259 AWS Commitment Models 260 AWS Reserved Instance 260 Member Account Affinity 261 Standard Versus Convertible RIs 263 Instance Size Flexibility 264 AWS Savings Plans 267 Savings Bundles 268 Microsoft Azure 269 Azure Reservations 269 Instance Size Flexibility 271 Azure Savings Plans 272 Google Cloud 274 Google Committed Use Discounts 274 Paying for Cores, Not Hours, in Google 275 Google Billing and Sharing CUDs 275 xvi | Table of Contents
  • 22. Google Billing Account and Ownership 276 Applying Google CUDs in a Project 277 Google Flexible Committed Use Discounts 277 Conclusion 278 18. Building a Commitment-Based Discount Strategy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281 Common Mistakes 282 Steps to Building a Commitment-Based Discount Strategy 282 Step 1: Learn the Fundamentals of Each Program 282 Step 2: Understand Your Level of Commitment to Your Cloud Service Provider 286 Step 3: Build a Repeatable Commitment-Based Discount Process 286 Step 4: Purchase Regularly and Often 289 Step 5: Measure and Iterate 290 Step 6: Allocate Up-Front Commitment Costs Appropriately 291 How to Manage the Commitment Strategy 293 Purchasing Commitments Just-in-Time 293 When to Rightsize Versus Commit 295 The Zone Approach 296 Who Pays for Commitments? 298 Strategy Tips 300 Conclusion 302 19. Sustainability: FinOps Partnering with GreenOps. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303 What Are Cloud Carbon Emissions? 305 Scope 1, 2, and 3 Emissions 306 Are Cloud Providers Green? 307 Access 308 Completeness 308 Granularity 309 Partnering with Engineers on Sustainability 309 FinOps and GreenOps Better Together? 310 GreenOps Remediations 312 Avoid FinOps Working Against GreenOps 313 Conclusion 314 Part IV. Operate Phase 20. Operate: Aligning Teams to Business Goals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319 Achieving Goals 319 Table of Contents | xvii
  • 23. Staffing and Augmenting Your FinOps Team 320 Processes 320 Onboarding 321 Responsibility 322 Visibility 322 Action 323 How Do Responsibilities Help Culture? 324 Carrot Versus Stick Approach 324 Handling Inaction 325 Putting Operate into Action 326 Conclusion 326 21. Automating Cost Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329 What Is the Outcome You Want to Achieve? 330 Automated Versus Manual Tasks 330 Automation Tools 332 Costs 332 Other Considerations 333 Tooling Deployment Options 333 Automation Working Together 335 Integration 335 Automation Conflict 335 Safety and Security 336 How to Start 337 What to Automate 338 Tag Governance 338 Scheduled Resource Start/Stop 338 Usage Reduction 338 Conclusion 339 22. Metric-Driven Cost Optimization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341 Core Principles 341 Automated Measurement 342 Targets 342 Achievable Goals 342 Data Driven 346 Metric-Driven Versus Cadence-Driven Processes 347 Setting Targets 349 Taking Action 349 Bring It All Together 350 Conclusion 352 xviii | Table of Contents
  • 24. 23. FinOps for the Container World. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 353 Containers 101 354 The Move to Container Orchestration 355 The Container FinOps Lifecycle 356 Container Inform Phase 357 Cost Allocation 357 Container Proportions 357 Tags, Labels, and Namespaces 361 Container Optimize Phase 362 Cluster Placement 362 Container Usage Optimization 362 Server Instance Rate Optimization 365 Container Operate Phase 365 Serverless Containers 366 Conclusion 366 24. Partnering with Engineers to Enable FinOps. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369 Integrating Us with Them 369 What’s on the Mind of the Engineer? 370 Constraints and the Solving of Hard Problems 372 Principles for Enabling Cost-Efficient Engineering 373 #1: Maximize Value Rather Than Reduce Cost 374 #2: Remember That We Are on the Same Team 375 #3: Prioritize Improving Communication 375 #4: Introduce Financial Constraints Early in the Product Development 376 #5: Enablement, Not Control 377 #6: Leadership Support Isn’t Helpful, It Is Essential 377 Data in the Path of the Engineer 379 Models for Partnering with Engineering Teams 380 Direct Contribution 380 Indirect Collaboration 380 Indirect Collaboration with Targeted Contribution 380 Conclusion 381 25. Connectivity to Other Frameworks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383 Total Cost of Ownership 385 Working with Other Methodologies and Frameworks 385 Find Out Who’s Out There 386 Make Friends and Share Goals 387 Share Influence, Terminology, and Processes 388 Share Infrastructure 389 Table of Contents | xix
  • 25. Share Knowledge 389 Conclusion 389 26. FinOps Nirvana: Data-Driven Decision Making. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391 Unit Economics and Metrics 392 Unit Economics Don’t Have to Be About Revenue 393 Calculating Unit Economic Metrics 394 Spending Is Fine, Wasting Is Not 394 Activity-Based Costing 397 Coming Back to the Iron Triangle 399 What’s Missing from the Equation? 400 When Have You Won at FinOps? 401 Conclusion 403 27. You Are the Secret Ingredient. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405 Call to Action 406 Afterword on What to Prioritize (from J.R.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409 Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411 xx | Table of Contents
  • 26. Preface Dear Reader, J.R. and Mike here, the coauthors of the book you are holding. We began this second edition undertaking in early 2022. When we wrote the first edition of this book in 2019, the world was a different place. COVID had massively accelerated the move to the cloud, shattering all previous estimates of cloud spend growth. After we started writing this edition, a global economic downturn forced organizations—including the major cloud service providers—to elevate the importance of cloud spend effi‐ ciency to board-level discussions. Amazon’s CFO has pledged to help customers trim their cloud bills, and Microsoft’s CEO indicated that their top priority is to help their customers do more with less. The World Turned Upside Down FinOps as a concept went from an obscure term to a business necessity. At confer‐ ences pre-2020 we frequently overheard: “What the heck is FinOps?” By 2023 it is predicted that 80% of organizations using cloud services will establish a dedicated FinOps function. The FinOps Foundation went from a twinkle in our eyes to a global force with nearly 10,000 practitioners of the craft representing every major industry and the majority of the Fortune 500, FTSE 100, and ASX 250. FinOps went from being a fringe term to receiving 10 times the search traffic and analyst mentions that the “cloud financial management” moniker pushed by large clouds like Amazon Web Services did. The pay-as-you-go model—also known as the variable spend model—allows engi‐ neers to gain rapid access to infrastructure so that they can innovate quickly. The stories we hear remain: engineering teams still consume resources in the cloud with not enough prioritization of cost efficiency. Finance teams struggle to understand and keep up with what teams are spending and to properly allocate cloud investments. Leadership still doesn’t know which levers to pull to implement a FinOps transforma‐ tion and drive more guidance of cloud spend investment. xxi
  • 27. The problem has only gotten more complex in the last three years. Cloud providers have added hundreds of thousands of additional product stock-keeping units (SKUs) driven by thousands of new features. In the months preceding publication of this edition, Google Cloud and Azure offered completely new ways of making discount commitments in the form of Azure Savings Plans and Google Flexible Committed Use Discounts (Flexible CUDs), changing the game yet again. During the last decade of our respective careers, we heard a consistent theme from practitioners and executives alike: there’s a lack of cloud value education and knowl‐ edge available. Mike heard it while running cloud cost optimization for Atlassian’s massive cloud deployments. J.R. heard it while coaching the world’s largest cloud spenders as cofounder of Cloudability’s cloud spend management platform (acquired by Apptio in 2019) from 2011 to 2020 and later as the executive director of the FinOps Foundation, as an employee of the Linux Foundation. From this demand for a resource from which we can all learn, along with a need for someone to formally define FinOps, we joined forces in early 2019 with 26 expert practitioners from the industry to create the FinOps Foundation. The community of now nearly 10,000 practitioners from the FinOps Foundation have provided most of the best practices we’ll cover in this book. The examples herein come from their hard-earned experience and war stories shared in the various community forums. We’ve also woven in quotes from them to help connect the content with real-life thoughts and opinions on FinOps. Who Should Read This Book Anyone working in engineering, finance, procurement, product ownership, or leader‐ ship in a company running—or aspiring to run—in the public cloud will benefit from this book. As an organization understands the personas in FinOps, it can map them to relevant teams across the business. Engineers are most likely not used to thinking about costs as a day-to-day concern. In the precloud days, they were mainly worried about performance in relation to hardware. Constrained by procurement and unable to get more servers whenever they needed them, they had to plan far in advance. They have to think about the cost of their infrastructure choices and its impact on the business. At first, this can feel foreign and at odds with their primary focus of shipping product and feature enhancements. Over time they add cost as another efficiency metric that they can tune to positively impact the business. A lot of engineers will just throw hardware at a problem. FinOps requires engineers to consider the cost and margins. —John Stuart, VP, DevOps, Security & IT at Jobvite xxii | Preface
  • 28. Finance traditionally focused on retroactive reporting on a monthly or quarterly granularity, based on set budgets that quickly became out of date. The job has evolved now to help enable the business to continually move forward, and to proactively partner with tech and engineering teams to forecast spend, based on the actions of engineers (who aren’t used to thinking about that cost). In other words, they’re shifting from opaque and fixed capital expenditure (CapEx) reporting to transparent and fluid operational expenditure (OpEx) forecasting. As part of that role, finance teams become engineering team partners who understand what the drivers of cloud spend are amid thousands of SKUs. They help to fundamentally reinvent how to perform the finance function, while also rethinking how to report technology spend to executives and investors. Procurement teams are used to tightly controlled spending, careful rate negotiations, and wielding the power of the purchase order before vendors get paid. Now procure‐ ment teams become strategic sourcing. They pull all rogue spending together into an enterprise agreement with their cloud service provider to get the best rates for what engineers are already using to deliver value. We don’t win by shaving cents from the cloud provider. We win by delivering features to our customers. —Alex Landis, Autodesk Product owners, responsible for the pricing and margins of their products, struggled in the precloud world to understand all the costs that went into servicing a customer or operating a commercial offering. Cloud lets them understand more, or all, of the cost of delivering digital value, understand the cost impact of new features, and see how customer use cases create variability in the cost of an application. This allows product teams to collaborate much more effectively with engineering teams developing the products, to forecast revenue and margin more effectively, and to target customer demand much more efficiently. Leadership, C-level executives, VPs, directors, or technology leaders managing budg‐ ets for a team have often lost direct control of cloud spending decisions and now rely on their teams to operate within reasonable budgets. Tech executives no longer plan large purchase decisions far in advance. Instead, they think more about how to forecast and manage spending that’s already happening. The conversation has shifted from ensuring services have the capacity to ensuring that they’re spending the right amount of money for the job. They want more control over how much is spent and more ability to strategically influence where it is spent. This book seeks to break down barriers between these personas by laying out a common lexicon and set of best practices to follow. Preface | xxiii
  • 29. About This Book In the coming chapters, we’ll formally define FinOps. The definition we’ve created was formulated by the most experienced cloud financial management teams on earth, who manage hundreds of millions of dollars (or billions in some cases) per year in cloud spend. We’ve collected their common practices for achieving cloud success along with some pitfalls they’ve identified and solved. We’ll show what effective FinOps looks like and how to start the FinOps transformation in your organization. Previously, the only way to gain access to this knowledge would be to attend public events where these experts would present their ideas. This book and the FinOps Foundation changes that with a vibrant community, in-depth training resources, and standardized best practices. After you’ve read this book, we encourage you to get involved with the FinOps Foun‐ dation’s various programs as a pathway to continue honing your skills and career. The mission of the foundation is to advance every individual who manages the value of the cloud. The community is there for you. We hope that the real-world strategies, processes, and stories in this book will inspire everyone to better take control of cloud spend. And in the process, we can make our organizations, and our own careers, more competitive. What You Need to Know Before Reading On At the time of writing, we assume readers will have a base level of knowledge of at least one of the three main public cloud providers (Amazon Web Services [AWS], Azure, and Google Cloud Platform [GCP]). Readers should understand how the cloud works and charges for resources. They should also be familiar with the major resource types like compute and storage, and higher-level service offerings like managed databases, queues, and object storage. A good starting place for the level of AWS knowledge needed is the AWS Business Professional training, or better, the AWS Cloud Practitioner certification. Both cover the basics of operating in AWS. For Google, check out the GCP Cloud Digital Leader course. For Azure, try the Azure Fundamentals learning path. These can usually be completed in a single-day workshop or through online training. Readers should also understand the fundamentals of how cloud computing works; know the key services on their cloud provider, including their common use cases; and have a basic understanding of how billing and pricing work in the pay-as-you-go consumption model. For example: as an AWS user, you should already know the difference between EC2 (Elastic Compute Cloud) and RDS (Relational Database Service). You should under‐ stand that there are different ways to pay for those resources, such as On-Demand, xxiv | Preface
  • 30. Reserved Instances (RIs), Savings Plans (SPs), and Spot. It’s OK if you don’t know how RIs or SPs work in detail or how to plan a strategy for purchasing them—we’re going to cover that—but you should already understand that they can be used to save money on compute resources. FinOps Is Evolving Over the past few years, so much has evolved into what we call FinOps today—and it will continue to evolve. As the cloud service providers offer more and more services and continue to offer different ways to optimize their platforms, FinOps will keep adapting. We recommend always confirming the details of the cloud service provider offerings we explore throughout this book. If there are corrections, alternative opin‐ ions, or criticisms of anything in this book, we encourage readers to contact us. After all, it has taken brave folks challenging the way things are done to help formulate the successful FinOps practices we have today. Conventions Used in This Book The following typographical conventions are used in this book: Italic Indicates new terms, URLs, email addresses, filenames, and file extensions. This element signifies a tip or suggestion. This element signifies a general note. This element indicates a warning or caution. Preface | xxv
  • 31. O’Reilly Online Learning For more than 40 years, O’Reilly Media has provided technol‐ ogy and business training, knowledge, and insight to help companies succeed. Our unique network of experts and innovators share their knowledge and expertise through books, articles, and our online learning platform. O’Reilly’s online learning platform gives you on-demand access to live training courses, in-depth learning paths, interactive coding environments, and a vast collection of text and video from O’Reilly and 200+ other publishers. For more information, visit https://oreilly.com. How to Contact Us Please address comments and questions concerning this book to the publisher: O’Reilly Media, Inc. 1005 Gravenstein Highway North Sebastopol, CA 95472 800-998-9938 (in the United States or Canada) 707-829-0515 (international or local) 707-829-0104 (fax) We have a web page for this book, where we list errata, examples, and any additional information. You can access this page at https://oreil.ly/cloud-finops-2e. Email [email protected] to comment or ask technical questions about this book. For news and information about our books and courses, visit https://oreilly.com. Find us on LinkedIn: https://linkedin.com/company/oreilly-media. Follow us on Twitter: https://twitter.com/oreillymedia. Watch us on YouTube: https://youtube.com/oreillymedia. xxvi | Preface
  • 32. Acknowledgments First, to our families (Lesley, Jessica, Harrison, Oliver, and Claire), who sacrificed so many nights and weekends in allowing us to write this book originally and then again for the second edition, and who suffered through us talking about nothing else but FinOps: thank you. To the team at O’Reilly (Corbin Collins, John Devins, Kate Galloway, Kristen Brown, and Sara Hunter): without your efforts this never would have happened. Rob Martin, who has reread, commented, and proposed more thoughtful (and often verbose!) changes than we could even consider. Thanks to the teams at Amazon Web Services, Google Cloud, and Microsoft Azure for your ongoing feedback and reviews. Tech reviewers: Jason Rhoades and Joshua Bauman, who stepped in quickly to power through a hornet’s nest of comments, revisions, and suggestions on our nearly final draft. We would like to thank all of the members of the FinOps Foundation. Since starting the FinOps Foundation, we’ve been humbled by the number of companies and practi‐ tioners signing up and by the willingness of charter members to assist in formalizing what FinOps is. To the FinOps Foundation staff: Andrew Nhem, Ashley Hromatko, Ben de Mora, Joe Daly, Kevin Emamy, Kyle McLaughlin, Natalie Bergman, Rob Martin, Ruben Vander Stockt, Samantha White, Stacy Case, Steven Melton, Steven Trask, Suha Shim, Tho‐ mas Sharpe, and Vasilio Markanastasakis. Your efforts to help build the foundation are greatly appreciated. Mike would like to thank his FinOps team at Atlassian. Daniel Farrugia, Diana Mileva, Florence Timso, Letian Wang, Sara Gadallah, Teresa Meade, and Tom Cutajar. Throughout the years we’ve worked with many people who have shared their compa‐ nies’ stories around their cloud challenges and the methods they have implemented to solve them. There are too many to mention, but to all of you: thanks. Finally, thank you to all the people who helped along the way; without your efforts this book would not be what it is today: Aaron Edell, Abuna Demoz, Adam Heher, Alex Hullah, Alex Kadavil, Alex Landis, Alex Sung, Alexander Price, Alison McIntyre, Alison Pumma, Ally Anderson, Amelia Blevins, Anders Hagman, Andrew Midg‐ ley, Andrew Thornberry, Anthony Tambasco, Antoine Lagier, Ben Kwan, Benjamin Coles, Bhupendra Hirani, Bindu Sharma, Bob Nemeth, Brad Payne, Casey Doran, Dana Martin, Darek Gajewski, David Andrews, David Angot, David Arnold, David Shurtliff, David Sterz, David Vale, Dean Layton-James, Dieter Matzion, Elliot Borst, Elliott Spira, Ephraim Baron, Erik Onnen, Gavin Cahill, Geoffrey Anderson, Ilja Preface | xxvii
  • 33. Summala, James Jackson, Jason Fuller, Jerome Hess, Jess Belliveau, John McLoughlin, John Merritt, John Stuart, Jon Collins, Justin Kean, Keith Jarrett, Ken Boynton, Lind‐ bergh Matillano, Manish Dalwadi, Mark Butcher, Mark Richter, Marsha Shoemaker, Martin Bleakley, Mat Ellis, Matt Finlayson, Matt Leonard, Michael Flanakin, Michele Allesandrini, Nabil Zakaria, Naveen Chand, Pedro Silva, Phillip Coletti, Renaud Brosse, Rich Hoyer, Rick Ochs, Sarah Grey, Sascha Curth, Shane Anderson, Stephanie Gooch, Stephen Elliot, Tom Cross, Tom March, Tom Marrs, Tony Curry, Umang Sehgal, Virginia Wilson, Webb Brown, Wendy Smith, and William Bryant. Cheers to everyone who allowed us to quote them throughout the book. xxviii | Preface
  • 34. PART I Introducing FinOps In the first part of this book, we cover a lot of the fundamentals, such as what FinOps is, how teams operate, the language of FinOps, how cloud services are billed, and a roadmap to start your own FinOps journey guided by the FinOps Foundation Framework.
  • 36. CHAPTER 1 What Is FinOps? In the simplest terms, FinOps brings financial accountability to the variable spend model of cloud. But that description merely hints at the outcome. The cultural change of running in the cloud moves ownership of technology and financial deci‐ sion making out to the edges of the organization, from procurement to engineering, architecture, and product teams. It empowers technology, finance, and business pro‐ fessionals to work together in more efficient ways. Organizations around the world are moving aggressively to cloud, whether they are ready or not. Like the transition from mainframes to client/server, to the web, or to mobile, the shift to cloud (and from projects to products) brings with it massive changes to the way traditional business functions need to account for, request, and manage technology costs. FinOps demands you acknowledge that the old ways of managing infrastructure aren’t just ineffective; they create situations where runaway cloud costs can threaten the business. While traditional infrastructure management methodologies will still be needed for owned infrastructure in the future, no level of adherence to these meth‐ odologies—which don’t handle the variable consumption model of cloud well—will allow organizations to manage cloud effectively without the introduction of FinOps. Defining the Term “FinOps” As of early 2023, the FinOps Foundation defines it as such: 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. 1
  • 37. At its core, FinOps is a cultural practice. It’s the way for teams to manage their cloud costs, where everyone takes ownership of their cloud usage supported by a central best-practices group. Cross-functional teams in engineering, finance, product, procurement, etc. work together to enable faster product delivery, while at the same time gaining more financial control and predictability. FinOps is a portmanteau of the words “Finance” and “DevOps,” stressing the communications and collaboration of business and engineering teams. Cloud FinOps is sometimes incorrectly referred to as “Cloud Financial Operations,” but that term is falling out of favor due to its ambiguity with the more traditional “Financial Operations” role that exists in finance. Other synonyms for the practice include “Cloud Financial Management,” “Cloud Financial Engineering,” “Cloud Cost Management,” or “Cloud Optimization.” Whatever you call it, FinOps is the practice of getting the most business value out of your cloud spend. This chapter discusses the core principles of FinOps, how the associated cultural transformations began, and why every organization needs to embrace the discipline for cloud success. But first, let’s set the stage for defining FinOps with a typical story of an individual practitioner’s journey. The FinOps Hero’s Journey Today’s FinOps leader often comes out of a world of managing, planning, and accounting for traditional IT and virtualized servers. Here’s a typical story that is an amalgamation of those we’ve heard over the years. It’s likely you are about to embark on a similar journey, are currently on it, or have completed parts of it already. The hero in this story is called Finn. Things were pretty straightforward for Finn: backward-looking financial reports were done quarterly, and capacity planning meant extrapolating usage trends to guess the production needs of the organization for the next few quarters to meet changing demands for its products. There weren’t a lot of surprises in spending. Then Finn noticed an increasing number of AWS or Google Cloud payables coming in without purchase orders attached. One of his cloud-savvy colleagues, Ana, explained the highly variable nature of cloud and how it’s just, well, different than on-premises data centers—and that there’s an entirely new way of managing it, as well as a new professional discipline emerging to do so. Finn carefully considered Ana’s words. It did sound interesting, and appealing. But then Finn remembered how well the processes he had in place for the organization’s 8,000 2 | Chapter 1: What Is FinOps?
  • 38. on-premises servers work. Cloud couldn’t be that different. Surely if he just applied his existing processes more diligently, cloud costs could be managed as well. The next quarter, cloud spending doubled unexpectedly, and Finn went back to Ana with his tail between his legs. He committed to trying a new set of processes that look more frequently at spend and increasing his interface time with the engineering teams creating the spend. All of a sudden the finance leader, who previously never cared about cloud spending, began pushing Finn to go back to quarterly reporting, saying the real-time approach he was taking didn’t fit with the company’s other processes. The technology leader was pushing back, saying she couldn’t consider cost and also make her product delivery deadlines. Finn’s executive team encouraged a top-down control methodology. Finn again went back to Ana for help, and she led him to fellow journeyers at the FinOps Foundation. Learning from their mistakes and wins, Finn began to lay out a plan for how to reset the company’s processes and, more ambitiously, effect cultural change. It was go time. Finn rolled out a new cloud spend allocation strategy, tagging guidelines, criteria for rightsizing (i.e., resizing cloud resources to better match workload require‐ ments), and an initial rate optimization commitment to his cloud provider. There was finally a path forward that seemed to allow him to account for the spend and the teams to get the tech they needed without friction. Cloud migration began to soar. Right when things seemed to be going well, a new CFO came in and said the cloud was too expensive at scale, advocating for a widespread return to the data center. It was time for Finn’s biggest test: working with his cloud-savvy colleagues to show that cloud is more than a cost center. They had to show how cloud can enable innovation and velocity in ways that on-premises data centers cannot, driving competitive advantage for the company. The CEO saw the bigger picture and agreed, paving the way for a cloud-first strategy. Newly confident, Finn forged ahead, breaking down silos between teams and helping to drive real change in the organization. But he faced one last battle: cloud spend was now hitting material levels, affecting the bottom line. The CFO stepped in to stop the upward trend by any means necessary to ensure the organization’s margins were not affected. Finn moved beyond the one-dimensional view of looking only at cloud spend and shifted to a unit economics model that tied the spend back to business value, giving him the context to clearly demonstrate that cloud spend was on the right path. In the end, Finn realized that this journey is just the beginning. Cloud is constantly evolving, and FinOps with it. Finn and Ana will have the most influence in this new field by helping to define its best practices, something they see as a key way to give back to the community that helped them on their own journeys. The FinOps Hero’s Journey | 3
  • 39. Some aspects of this journey may resonate with you, and others may be part of your journey ahead. Now that you’ve heard a typical story, let’s look at where FinOps emerged. Where Did FinOps Come From? Trailblazers like Adobe and Intuit, early scalers in public cloud, provided the first glimpse to the coauthors of what would become FinOps as far back as 2012 in the Bay Area. In the mid-2010s, they interacted with larger companies like GE and Nike as they began their own early FinOps journey tied to their rapid expansion of cloud usage. A couple of years later, Mike saw forward-looking enterprises in Australia, like his own Atlassian as well as others like Qantas and Tabcorp, begin similar practices. Finally, during J.R.’s two-year tour of duty in London from 2017 to 2019, he was a firsthand witness to enterprises like BP, HSBC, and Sainsbury’s as they developed this new approach across their company cultures. FinOps came into being slowly and simultaneously, all over the world, as the financial and accountability challenges of cloud presented themselves at scale everywhere, as various industries and regions began to adopt material amounts of cloud. Figure 1-1 traces the increasing prevalence of the term. Figure 1-1. Search requests for the term “FinOps” between 2018 and 2022 (source: speakeasystrategies.com) “FinOps” is a term that has come late to the party. In the early days, companies simply called the practice “cloud cost management.” Later, “cloud cost optimization” began to take hold, although it didn’t speak to the allocation challenges of cloud. AWS and other cloud providers began using the phrase “cloud financial management,” a 4 | Chapter 1: What Is FinOps?
  • 40. catch-all title that is increasingly being replaced by “FinOps” based on search and analyst mentions referenced in the figures. Others, like the retailer Target, call their internal practice “Engineering Efficiency.” Figure 1-2 shows increasing growth in “FinOps” mentions by industry analysts. Figure 1-2. Analyst articles mentions of different names for FinOps (source: speakeasy‐ strategies.com) In Figure 1-2, you can see the recent increase in cloud analyst articles using the term “FinOps” to describe this field of practice, as older terms like “cloud financial management” reduce in mindshare. Choosing this compound term, which purposely echoes DevOps, brings the vital cross-functional and agile aspect of the movement to the forefront. And now FinOps is becoming a standalone profession worldwide. Figure 1-3 shows the growth in FinOps being a skill listed by members of the LinkedIn platform. The 2022 State of FinOps data showed that nearly every major industry, from Financial Services to Retail to Manufacturing and beyond, is now running a FinOps practice. Where Did FinOps Come From? | 5
  • 41. Figure 1-3. Count of people on LinkedIn listing FinOps as a skill set State of FinOps data in 2021 indicated that 95% of those working in the field saw it as their likely career path. Public job listings for FinOps practitioners at Fortune 500 enterprises ranging from Apple to Disney to CVS Health to Nike are popping up frequently on LinkedIn and the FinOps Foundation site. The challenge today is less of finding a job in FinOps and more of companies finding enough skilled candidates to fill the roles they have, driving an explosion of those seeking FinOps certification and related skills. 6 | Chapter 1: What Is FinOps?
  • 42. 1 Emil Lerch and J.R. Storment, “Leveraging Cloud Transformation to Build a DevOps Culture,” AWS Public Sector Summit, June 20, 2016, https://oreil.ly/DCqfg. Stories from the Cloud—J.R. I first spoke about the concept of FinOps in a DevSecOps talk1 with Emil Lerch from AWS at the AWS Public Sector Summit in Washington, DC, back in 2016. We started with the definition of DevOps from the venerable Gene Kim, author of The Phoenix Project: The term “DevOps” typically refers to the emerging professional movement that advocates a collaborative working relationship between development and IT opera‐ tions, resulting in the fast flow of planned work (i.e., high deploy rates) while simul‐ taneously increasing the reliability, stability, resilience, and security of the production environment. Then, with a bit of hubris, or as an homage, I crafted a definition of FinOps based on Kim’s: The term “FinOps” typically refers to the emerging professional movement that advocates a collaborative working relationship between DevOps and finance, resulting in an iterative, data-driven management of infrastructure spending (i.e., lowering the unit economics of cloud) while simultaneously increasing the cost efficiency and, ulti‐ mately, the profitability of the cloud environment. Since then, the definition of FinOps has evolved and broadened, but it has retained the all-important principles of driving a collaborative working relationship between teams, making iterative changes using data-driven insights, and improving unit economics. Data-Driven Decision Making With FinOps, each operational team (workload, service, product owner) can access the near-real-time data they need to influence their spend and help them make data-driven decisions that result in efficient cloud costs balanced against the speed/ performance and quality/availability of services. If you can’t out-experiment and beat your competitors in time to market and agility, you are sunk.... So the faster you can get those features to market and test them, the better off you’ll be. Incidentally, you also pay back the business faster for the use of capital, which means the business starts making money faster, too. —Gene Kim, The Phoenix Project: A Novel About IT, DevOps, and Helping Your Business Win (IT Revolution Press, 2013) Data-Driven Decision Making | 7
  • 43. If it seems like FinOps is about saving money, then think again. FinOps is about making money. Cloud spend can drive more revenue, signal customer base growth, enable more product and feature release velocity, or even help shut down a data center. FinOps is all about removing blockers; empowering engineering teams to deliver bet‐ ter features, apps, and migrations faster; and enabling a cross-functional conversation about where to invest and when. Sometimes a business will decide to tighten the belt; sometimes it’ll decide to invest more. But now teams know why they’re making those decisions. Real-Time Feedback (aka the “Prius Effect”) There are three parts to a successful FinOps practice: Real−time reporting + just−in−time processes + teams working together = FinOps We’ll get into the second two later in the book. Right now, let’s look at the first part. The feedback loop of real-time reporting is a powerful influence on human behavior. In our experience, you should provide engineers with feedback on the impacts of their actions as close as possible to the time those actions occur. This tends to create automatic behavioral changes for the better. Anyone who’s driven an electric car has probably experienced the Prius Effect. When you put your foot down heavily on the pedal, an electric car’s display shows energy flowing out of the battery into the engine. When you lift your foot up, energy flows back into the battery. The feedback loop is obvious and instantaneous. You can see how the choice you’re making in the moment—one that in the past may have been unconscious—is impacting the amount of energy you’re using. Without explicit recommendations or guidance to do so, the real- time feedback loop instantly influences driving behavior. These visual cues typically create an immediate effect. You start to drive a bit more sensibly and step down a little less hard on the accelerator. You begin to realize you don’t need to accelerate quite so fast to get where you’re going. Or, if you’re running late, you decide that hitting the gas harder is worth the extra energy consumption. In either case, you can now make an informed decision to use the appropriate amount of energy to get where you need to go based on the environment in which you’re operating. 8 | Chapter 1: What Is FinOps?
  • 44. 2 Ron Cuirle and Rachel Shinn, “Better Insight: Measuring the Cost of an Application on GCP,” Google Cloud Next ’19, April 9, 2019, YouTube video, 43:55, https://oreil.ly/FJ1SP. Ask yourself: how can we provide information that teams need to make a better decision? —Ron Cuirle, Senior Engineering Manager at Target2 This real-time data-driven decision enablement is what FinOps is all about. In the data center world, engineers take individual actions that can’t easily be traced to their financial impact on the company due to long-term hardware purchases and associated depreciation schedules. Stories from the Cloud—J.R. During a previous visit to one of the world’s largest cloud spenders, I learned that, despite nine figures a year of annual cloud spend, no one was sharing those costs with the engineers who were incurring them. When they did finally reveal those costs to the engineering team, it was typically 30–60 days later, during an aggregate cost center review. They had the raw data available, but because they hadn’t adopted a culture of FinOps, they hadn’t implemented a feedback loop directly to those making decisions about how much cloud to use. Once they did, the results were immediate and dramatic. One of the first teams provided with this visibility discovered that they had been spending over $200,000 per month running development environments that they really didn’t need. With only three hours of engineering effort, they shut down those unnecessary resources and saved enough money to hire an additional team of engineers. The accountability provided by this new visibility revealed something quite interest‐ ing. No one gave a specific instruction or recommendation to make a change. Once the engineering manager was able to see the cost of individual environments, she made an informed decision that the team could do without the extra dev environ‐ ments. She hadn’t previously taken action because she didn’t have enough informa‐ tion to understand just how large the business impact of leaving the environment running ultimately was. This early FinOps process turned cost into another efficiency metric that engineering teams began to consider alongside other performance and reliability metrics. Engineers tend to be averse to inefficiency and once given the right data (and the leadership support discussed in Chapter 24) tend to optimize cost in the same ways they do other critical metrics. FinOps is about helping the business make better decisions while moving more quickly. The source of this increased velocity is the frictionless conversations it encourages between teams. Real-Time Feedback (aka the “Prius Effect”) | 9
  • 45. What made those teams great is that everyone trusted one another. It can be a powerful thing when that magic dynamic exists. —Gene Kim, The Phoenix Project Teams that previously spoke different languages and kept each other at arm’s length (e.g., engineering and finance) now build more collaborative relationships focused on what’s best for the business. This is FinOps in action. By setting best practices and defining a common lexicon on cloud spending as we’ll discuss in Chapter 4, businesses enable productive trade-off conversations to happen. Core Principles of FinOps As we have spoken with practitioners who are successfully introducing FinOps culture in their organizations, a common set of values or principles has emerged. Defining FinOps values and ensuring all the process, tooling, and people align to FinOps core principles will help lead you to success. FinOps teams that embrace these principles will be able to establish a self-governing, cost-conscious culture within their organizations that promotes both cost accountability and business agility to better manage and optimize costs while maintaining the velocity and innovation benefits of cloud. These FinOps values are: • Teams need to collaborate. • — Finance and technology teams work together in near real time as the cloud — operates on a per-resource, per-second basis. — Teams work together to continuously improve for efficiency and innovation. — • Decisions are driven by the business value of cloud. • — Unit economic and value-based metrics demonstrate business impact better — than aggregate spend. — Make conscious trade-off decisions among cost, quality, and speed. — — Think of cloud as a driver of innovation. — • Everyone takes ownership of their cloud usage. • — Accountability of usage and cost is pushed to the edge, with engineers taking — ownership of costs from architecture design to ongoing operations. — Individual feature and product teams are empowered to manage their own — usage of cloud against their budget. — Decentralize the decision making around cost-effective architecture, resource — usage, and optimization. — Technical teams must begin to consider cost as a new efficiency metric from — the beginning of the software development lifecycle. 10 | Chapter 1: What Is FinOps?
  • 46. • FinOps reports should be accessible and timely. • — Process and share cost data as soon as it becomes available. — — Real-time visibility autonomously drives better cloud utilization. — — Fast feedback loops result in more efficient behavior. — — Consistent visibility into cloud spend is provided to all levels of the — organization. — Create, monitor, and improve real-time financial forecasting and planning. — — Trending and variance analysis helps explain why costs increased. — — Internal team benchmarking drives best practices and celebrates wins. — — Industry peer-level benchmarking assesses your company’s performance. — • A centralized team drives FinOps. • — The central team encourages, evangelizes, and enables best practices in a — shared accountability model, much like security, which has a central team yet everyone remains responsible for their portion. — Executive buy-in for FinOps and its practices and processes is required. — — Rate, commitment, and discount optimization are centralized to take advan‐ — tage of economies of scale. — Remove the need for engineers and operations teams to think about rate — negotiations, allowing them to stay focused on usage optimization of their own environments. • Take advantage of the variable cost model of the cloud. • — The variable cost model of the cloud should be viewed as an opportunity to — deliver more value, not as a risk. — Embrace just-in-time prediction, planning, and purchasing of capacity. — — Agile iterative planning is preferred over static long-term plans. — — Embrace proactive system design with continuous adjustments in cloud opti‐ — mization over infrequent reactive cleanups. When Should You Start FinOps? Determining when to start FinOps has changed considerably since the first edition of this book. A few years ago, the practice typically began once a company had a spend panic moment where they inadvertently spent considerably more than they had budgeted. Adoption of the practice has now shifted considerably earlier in the cloud maturity lifecycle. It’s now common to see companies at the earliest stages of cloud adoption beginning the practice. This is driven partly by a better understanding of the challenges that cloud billing presents and also a large push by the big three cloud When Should You Start FinOps? | 11
  • 47. providers themselves to encourage their customers to get ahead of any cost problems early on. All three have also aggressively matured the cost tools and data provided to allow engineers and architects to consider cost as early as possible when engineering cloud-based solutions. Unfortunately, many still think FinOps is about saving money or reducing consump‐ tion exclusively; therefore, those people tend to believe that the right time to imple‐ ment FinOps should be measured by the amount of their cloud spend. To be fair, this does make sense on some level. For example, a massive cloud spender could immedi‐ ately find a lot of potential savings. However, creating accountability for cloud spend and the ability to fully allocate costs are critical components of a high-functioning FinOps practice, which often don’t get implemented if you think about it from a retroactive money-saving perspective. Further, the cultural and skill set changes that FinOps requires from both engineering teams and finance teams can take years to implement. The larger the organization and the more complex their environments, the more they will enjoy compounded benefits from starting the practice earlier. A successful FinOps practice doesn’t require sizable cloud deployments or a multimillion-dollar cloud bill. Starting FinOps early will make it much easier for an organization to make informed decisions about cloud spend, even as its operations are just starting to scale. Therefore, it is essential to understand FinOps maturity; the correct approach to creating a FinOps practice is for organizations to start small and grow in scale, scope, and complexity as business value warrants maturing an activity. As you’ll learn in Chapter 6, it’s not possible to install a fully formed FinOps practice from scratch, regardless of your past expertise. It takes time to transform the way engineers work and educate finance people about how cloud operates and to get executives onboard with the right reasons to use cloud. It’s a cultural change in ways of working, and the muscle of data-driven accountability and decision making must be built over time. No one team does FinOps; the central FinOps team works to enable the many various teams around the organization that must work together to manage the business value of cloud. Further, teams across a large organization may be at very different places in their FinOps journey for a long time as each reaches tipping points where individual adoption makes sense. Although this book can guide an organization to successful practices while helping teams avoid common pitfalls, no organization can proceed directly from zero FinOps to efficient FinOps. Every organization and team must implement FinOps processes incrementally, taking the time to learn from each other as they go. 12 | Chapter 1: What Is FinOps?
  • 48. Like DevOps before it, FinOps is a cultural shift, and the earlier it starts, the sooner an organization will benefit. Our experience has taught us that you do FinOps from day one, but you engage more of the processes as you scale up. Over the years we have seen companies start adopting FinOps at one of two typical times: • Formerly, the most common approach was to implement when things went off • the rails. In this scenario, spending hits a point where an executive forces a hard stop on cloud growth and demands that a new managing model be implemented. Despite it being a common driver, this is not the ideal way to approach FinOps adoption. Innovation and migrations slow down—or even stop temporarily— during this executive fire drill. • The wiser approach is taken by executives who have seen the cloud journey play • out and align to the FinOps maturity model on FinOps.org. The FinOps practice needs to develop at a pace that matches the company’s position in the FinOps maturity cycle and the company’s maturing use of cloud overall. Initially, a single person might be assigned to manage commitments to cloud providers. They set out to implement an initial account, label, and tagging hierarchy. From there, as the practice gets larger, each part of the process can be scaled up. We now see most new practitioners joining the FinOps Foundation with this adoption story. But no matter how a company arrives at the decision to implement FinOps, the first critical step is to begin providing visibility of cloud spend to relevant teams in a timely manner, so everyone can begin to understand what’s happening and determine how to address cost overruns before they become too large. In a mature practice, cost overruns are prevented via thoughtful architecture design before they even begin. While that level of visibility is achieved, the FinOps team starts educating the larger business stakeholders. As cross-functional teams work together, finance people will learn more of the language of cloud, while engineers begin to grasp relevant financial concepts, and businesspeople can make better decisions about where to invest resources. The value of starting as early as possible on this cultural shift cannot be overstated, and the benefits of a FinOps practice can be felt and measured almost immediately. When Should You Start FinOps? | 13
  • 49. Starting with the End in Mind: Data-Driven Decision Making One of the most important concepts in FinOps is using unit economic metrics to enable data-driven decision making by engineering teams. The idea is to measure cloud spend against business output or value metrics and then take action based on the insights they provide. This is the real-time feedback loop, discussed earlier as the Prius Effect, in action. Choosing the right business metrics to use for each part of the infrastructure is a complex process that’s covered in Chapter 26. For now, the main thing to remember is that providing unit economic metrics to enable data-driven decision making relies on almost every aspect of FinOps, including tagging, cost allocation, cost optimiza‐ tion, connectivity to other finance frameworks, and FinOps operations. The business metric is important, because it allows you to change the conversation from one that is just about dollars spent to one about efficiency and the value of cloud spend. Being able to say, “It costs $X to serve customers who bring in $Y in revenue” brings a context that helps you make the decision whether $X and $Y are reasonable investments for the organization. Then, as products evolve or change entirely with new features, companies are able to measure the impact of these changes via these business metrics. The result is being able to determine the difference between good cloud spend and bad—and trend those decisions over time. You should keep business value metrics in mind throughout the book and as you implement FinOps inside an organization. The nirvana state we are building toward is for your organization to continuously make data-driven business decisions about the value you are getting from your cloud spend. Stories from the Cloud—Jason Fuller Jason Fuller, who runs Cloud at HERE Technologies, a multinational organization providing global mapping services, shared a story at a FinOps Foundation meeting that illustrates the point well: We had a team way over budget using 9 billion lambda functions a month. I can’t influence that directly. But what I can do is sit with the team and understand the quality of the algorithm that you’re writing in lambda and determine if it can be tighter. Do we need that millisecond accuracy you’re providing? Yes. OK. The business now understands it’s that valuable. 14 | Chapter 1: What Is FinOps?
  • 50. Another Random Scribd Document with Unrelated Content
  • 51. Fr. Do all rooks live in rookeries? Mr. St. It is the general nature of them to associate together, and build in numbers on the same or adjoining trees. But this is often in the midst of woods or natural groves. However, they have no objections to the neighbourhood of man, but readily take to a plantation of tall trees, though it be close to a house; and this is commonly called a rookery. They will even fix their habitations on trees in the midst of towns; and I have seen a rookery in a churchyard in one of the closest parts of London. Fr. I think a rookery is a sort of town itself. Mr. St. It is: a village in the air, peopled with numerous inhabitants; and nothing can be more amusing than to view them all in motion, flying to and fro, and busied in their several occupations. The spring is their busiest time. Early in the year they begin to repair their nests or build new ones. Fr. Do they all work together or every one for itself? Mr. St. Each pair, after they have coupled, build their own nest; and instead of helping, they are very apt to steal the materials from one another. If both birds go out at once in search of sticks, they often find at their return, the work all destroyed, and the materials carried off; so that one of them generally stays at home to keep watch. However, I have met with a story which shows that they are not without some sense of the criminality of thieving. There was in a rookery a lazy pair of rooks, who never went out to get sticks for themselves, but made a practice of watching when their neighbours were abroad, and helped themselves from their nests. They had served most of the community in this manner and by these means had just finished their own nest; when all the other rooks in a rage, fell upon them at once, pulled their nest in pieces, beat them soundly, and drove them from their society. Fr. That was very right—I should have liked to have seen it. But why do they live together if they do not help one another?
  • 52. Mr. St. They probably receive pleasure from the company of their own kind, as men and various other creatures do. Then, though they do not assist one another in building, they are mutually serviceable in many ways. If a large bird of prey hovers about a rookery for the purpose of carrying off any of the young ones, they all unite to drive him away. When they are feeding in a flock, several are placed as sentinels upon the trees all round, who give the alarm if any danger approaches. They often go a long way from home to feed; but every evening the whole flock returns, making a loud cawing as they fly, as if to direct and call in the stragglers. The older rooks take the lead: you may distinguish them by the whiteness of their bills, occasioned by their frequent digging in the ground, by which the black feathers at the root of the bill are worn off. Fr. Do rooks always keep to the same trees? Mr. St. Yes; they are much attached to them, and when the trees happen to be cut down, they seem greatly distressed, and keep hovering about them as they are falling, and will scarcely desert them when they lie on the ground. Fr. Poor things! I suppose they feel as we should if our town was burnt down or overthrown by an earthquake. Mr. St. No doubt. The societies of animals greatly resemble those of men; and that of rooks is like those of men in a savage state, such as the communities of the North American Indians. It is a sort of league for mutual aid and defence, but in which every one is left to do as he pleases, without any obligation to employ himself for the whole body. Others unite in a manner resembling more civilized societies of men. This is the case with the beavers. They perform great public works by the united efforts of the whole community, such as damming up streams, and constructing mounds for their habitations. As these are works of great art and labour, some of them must probably act under the direction of others, and be compelled to work whether they will or not. Many curious stories are told to this purpose by those who have observed them in their remotest haunts, where they exercise their full sagacity.
  • 53. Fr. But are they all true? Mr. St. That is more than I can answer for; yet what we certainly know of the economy of bees may justify us in believing extraordinary things of the sagacity of animals. The society of bees goes farther than that of beavers, and, in some respects, beyond most among men themselves. They not only inhabit a common dwelling, and perform great works in common, but they lay up a store of provision, which is the property of the whole community, and is not used except at certain seasons, and under certain regulations. A beehive is a true image of a commonwealth, where no member acts for himself alone, but for the whole body. Fr. But there are drones among them who do not work at all. Mr. St. Yes; and at the approach of winter they are driven out of the hive, and left to perish with cold and hunger. But I have not leisure at present to tell you more about bees. You shall one day see them at work in a glass hive. In the meantime, remember one thing, which applies to all the societies of animals; and I wish it did as well to all those of men likewise. Fr. What is that? Mr. St. The principle upon which they all associate, is to obtain some benefit for the whole body, not to give particular advantages to a few.
  • 54. THE SHIP. Charles Osborn, when at home in the holydays, had a visit from a schoolfellow who was just entered as a midshipman on board of a man-of-war. Tom Hardy (that was his name) was a free-hearted, spirited lad, and a favourite among his companions; but he never liked his book, and had left school ignorant of almost everything he came there to learn. What was worse, he had got a contempt for learning of all kinds, and was fond of showing it. “What does your father mean,” says he, to Charles, “to keep you moping and studying over things of no use in the world but to plague folks?—Why can’t you go into his majesty’s service like me, and be made a gentleman of? You are old enough, and I know you are a lad of spirit.” This kind of talk made some impression upon young Osborn. He became less attentive to the lessons his father set him, and less willing to enter into instructive conversation. This change gave his father much concern; but as he knew the cause, he thought it best, instead of employing direct authority, to attempt to give a new impression to his son’s mind, which might counteract the effect of his companion’s suggestions. Being acquainted with an East India captain, who was on the point of sailing, he went with his son to pay him a farewell visit on board his ship. They were shown all about the vessel, and viewed all the preparations for so long a voyage. They saw her weigh anchor and unfurl her sails; and they took leave of their friend amid the shouts of the seamen and all the bustle of departure. Charles was highly delighted with this scene, and as they were returning could think and talk of nothing else. It was easy, therefore,
  • 55. for his father to lead him into the following train of discourse:— After Charles had been warmly expressing his admiration of the grand sight of a large ship completely fitted out and getting under sail, “I do not wonder,” said his father, “that you are so much struck with it; it is, in reality, one of the finest spectacles created by human skill, and the noblest triumph of art over untaught nature. Near two thousand years ago, when Julius Cesar came over to this island, he found the natives in possession of no other kind of vessel than a sort of canoe, formed of wickerwork covered with hides, no bigger than a man or two could carry. But the largest ship in Cesar’s fleet was not more superior to these, than the Indiaman you have been seeing is to what that was. Our savage ancestors ventured only to paddle along the rivers and coasts, or cross small arms of the sea in calm weather; and Cesar himself would have been alarmed to be a few days out of sight of land. But the ship we have just left is going by itself to the opposite side of the globe, prepared to encounter the tempestuous winds and mountainous waves of the vast Southern ocean, and to find its way to its destined port, though many weeks must pass with nothing in view but sea and sky. Now what do you think can be the cause of this prodigious difference in the powers of man at one period and another?” Charles was silent. Fa. Is it not that there is a great deal more knowledge in one than in the other? Ch. To be sure it is. Fa. Would it not, think you, be as impossible for any number of men untaught, by their utmost efforts, to build and navigate such a ship as we have seen, as to fly through the air? Ch. I suppose it would. Fa. That we may be the more sensible of this, let us consider how many arts and professions are necessary for this purpose. Come— you shall begin to name them, and if you forget any, I will put you in mind. What is the first?
  • 56. Ch. The ship-carpenter, I think. Fa. True—what does he do? Ch. He builds the ship. Fa. How is that done? Ch. By fastening the planks and beams together. Fa. But do you suppose he can do this as a common carpenter makes a box or set of shelves? Ch. I do not know. Fa. Do you not think that such a vast bulk requires a good deal of contrivance to bring it into shape, and fit it for all its purposes? Ch. Yes. Fa. Some ships, you have heard, sail quicker than others—some bear storms better—some carry more lading—some draw less water—and so on. You do not suppose all these things are left to chance? Ch. No. Fa. In order to produce these effects with certainty, it is necessary to study proportions very exactly, and to lay down an accurate scale by mathematical lines and figures after which to build the ship. Much has been written upon this subject, and nice calculations have been made of the resistance a ship meets with in making way through the water, and the best means of overcoming it; also of the action of the wind on the sails, and their action in pushing on the ship by means of the masts. All these must be understood by a perfect master of ship-building. Ch. But I think I know ship-builders who have never had an education to fit them for understanding these things. Fa. Very likely; but they have followed by rote the rules laid down by others; and as they work merely by imitation, they cannot alter or improve as occasion may require. Then, though common merchant- ships are trusted to such builders, yet, in constructing men-of-war
  • 57. and Indiamen persons of science are always employed. The French, however, attend to this matter more than we do, and, in consequence, their ships generally sail better than ours. Ch. But need a captain of a ship know all these things? Fa. It may not be absolutely necessary; yet occasions may frequently arise in which it would be of great advantage for him to be able to judge and give direction in these matters. But suppose the ship built —what comes next? Ch. I think she must be rigged. Fa. Well—who are employed for this purpose? Ch. Mast-makers, ropemakers, sailmakers, and I know not how many other people. Fa. These are all mechanical trades; and though in carrying them on much ingenuity has been applied in the invention of machines and tools, yet we will not stop to consider them. Suppose her, then, rigged—what next? Ch. She must take in her guns and powder. Fa. Stop there and reflect how many arts you have now set to work. Gunpowder is one of the greatest inventions of modern times, and what has given such a superiority to civilized nations over the barbarous? An English frigate, surrounded by the canoes of all the savages in the world, would easily beat them off by means of her guns; and if Cesar were to come again to England with his fleet, a battery of cannon would sink all his ships, and set his legions a swimming in the sea. But the making of gunpowder, and the casting of cannon, are arts that require an exact knowledge of the science of Chymistry. Ch. What is that? Fa. It comprehends the knowledge of all the properties of metals and minerals, salts, sulphur, oils, and gums, and of the action of fire, and water, and air upon all substances, and the effects of mixing
  • 58. different things together. Gunpowder is a mixture of three things only; saltpetre or nitre, sulphur or brimstone, and charcoal. But who could have thought such a wonderful effect would have been produced by it? Ch. Was it not first discovered by accident? Fa. Yes; but it was by one who was making chymical experiments, and many more experiments have been employed to bring it to perfection. Ch. But need a captain know how to make gunpowder and cannon? Fa. It is not necessary, though it may often be useful to him. However, it is quite necessary that he should know how to employ them. Now the sciences of gunnery and fortification depend entirely upon mathematical principles; for by these are calculated the direction of a ball through the air, the distance it would reach to, and the force with which it will strike any thing. All engineers, therefore, must be good mathematicians. Ch. But I think have heard of gunners being little better than common men. Fa. True—there is a way of doing that business, as well as many others, by mere practice: and an uneducated man may acquire skill in pointing a cannon, as well as in shooting with a common gun. But this is only in ordinary cases, and an abler head is required to direct. Well—now suppose your ship completely fitted out for sea, and the wind blowing fair; how will you navigate her? Ch. I would spread the sails, and steer by the rudder. Fa. Very well—but how would you find your way to the port you are bound for? Ch. That I cannot tell. Fa. Nor, perhaps, can I make you exactly comprehend it; but I can show you enough to convince you that it is an affair that requires much knowledge and early study. In former times, when a vessel left
  • 59. the sight of land, it was steered by observation of the sun by day, and the moon and stars by night. The sun, you know, rises in the east, and sets in the west; and at noon, in these parts of the world, it is exactly south of us. These points, therefore, may be found out when the sun shines. The moon and stars vary: however, their place in the sky may be known by exact observation. Then, there is one star that always points to the north pole, and is therefore called the pole-star. This was of great use in navigation, and the word pole-star is often used by the poets to signify a sure guide. Do you recollect the description in Homer’s Odyssey, when Ulysses sails away by himself from the island of Calypso—how he steers by the stars? Ch. I think I remember the lines in Pope’s translation. Fa. Repeat them, then. Ch. “Placed at the helm he sat, and mark’d the skies, Nor closed in sleep his ever-watchful eyes; There view’d the Pleiades, and the Northern Team, And great Orion’s more effulgent beam, To which, around the axle of the sky, The Bear revolving points his golden eye: Who shines exalted on th’ ethereal plain, Nor bathes his blazing forehead in the main.” Fa. Very well; they are fine lines, indeed! You see, then, how long ago sailors thought it necessary to study astronomy. But as it frequently happens, especially in stormy weather, that the stars are not to be seen, this method was subject to great uncertainty, which rendered it dangerous to undertake distant voyages. At length, near 500 years since, a property was discovered in a mineral, called the magnet or loadstone, which removed the difficulty. This was, its polarity, or quality of always pointing to the poles of the earth, that is, due north and south. This it can communicate to any piece of iron; so that a needle well rubbed in a particular manner by a loadstone, and then balanced upon its centre so as to turn round freely, will always point to the north. With an instrument called a
  • 60. mariner’s compass, made of one of these needles, and a card marked with all the points—north, south, east, west, and the divisions between these, a ship may be steered to any part of the globe. Ch. It is a very easy matter, then. Fa. Not quite so easy, neither. In a long voyage, cross or contrary winds blow a ship out of her direct course, so that without nice calculations both of the straight track she has gone, and all the deviations from it, the sailors would not know where they were, nor to what point to steer. It is also frequently necessary to take observations, as they call it; that is, to observe with an instrument where the sun’s place in the sky is at noon, by which they can determine the latitude they are in. Other observations are necessary to determine their longitude. What these mean, I can show you upon the globe. It is enough now to say that, by means of both together, they can tell the exact spot they are on at any time; and then, by consulting their map, and setting their compass, they can steer right to the place they want. But all this requires a very exact knowledge of astronomy, the use of the globes, mathematics, and arithmetic, which you may suppose is not to be acquired without much study. A great number of curious instruments have been invented to assist in these operations; so that there is scarcely any matter in which so much art and science have been employed as in navigation; and none but a very learned and civilized nation can excel in it. Ch. But how is Tom Hardy to do? for I am pretty sure he does not understand any of these things. Fa. He must learn them, if he means to come to anything in his profession. He may, indeed, head a pressgang, or command a boat’s crew without them; but he will never be fit to take charge of a man- of-war, or even a merchant-ship. Ch. However, he need not learn Latin and Greek.
  • 61. Fa. I cannot say, indeed, that a sailor has occasion for those languages; but a knowledge of Latin makes it much easier to acquire all modern languages; and I hope you do not think them unnecessary to him. Ch. I did not know they were of much importance. Fa. No! Do you think that one who may probably visit most countries in Europe, and their foreign settlements, should be able to converse in no other language than his own? If the knowledge of languages is not useful to him, I know not to whom it is so. He can hardly do at all without knowing some; and the more the better. Ch. Poor Tom! then I doubt he has not chosen so well as he thinks. Fa. I doubt so, too. Here ended the conversation. They soon after reached home, and Charles did not forget to desire his father to show him on the globe what longitude and latitude meant.
  • 62. THINGS BY THEIR RIGHT NAMES. Charles. Papa, you grow very lazy. Last winter you used to tell us stories, and now you never tell us any; and we are all got round the fire quite ready to hear you. Pray, dear papa, let us have a very pretty one. Father. With all my heart—What shall it be? Ch. A bloody murder, papa! Fa. A bloody murder! Well then—once upon a time some men dressed all alike.... Ch. With black crapes over their faces? Fa. No; they had steel caps on.—having crossed a dark heath, wound cautiously along the skirts of a deep forest.... Ch. They were ill-looking fellows, I dare say? Fa. I cannot say so; on the contrary, they were as tall, personable men as most one shall see: leaving on their right hand an old ruined tower on the hill.... Ch. At midnight, just as the clock struck twelve; was it not, papa? Fa. No, really; it was on a fine balmy summer’s morning;—they moved forward, one behind another.... Ch. As still as death, creeping along under the hedges? Fa. On the contrary—they walked remarkably upright; and so far from endeavouring to be hushed and still, they made a loud noise as they came along, with several sorts of instruments.
  • 63. Ch. But, papa, they would be found out immediately. Fa. They did not seem to wish to conceal themselves: on the contrary, they gloried in what they were about. They moved forward, I say, to a large plain, where stood a neat pretty village which they set on fire. Ch. Set a village on fire, wicked wretches! Fa. And while it was burning they murdered—twenty thousand men. Ch. O fie! papa! You don’t intend I should believe this; I thought all along you were making up a tale, as you often do; but you shall not catch me this time. What! they lay still, I suppose, and let these fellows cut their throats? Fa. No, truly, they resisted as long as they could. Ch. How should these men kill twenty thousand people, pray? Fa. Why not? the murderers were thirty thousand. Ch. O, now I have found you out! you mean a BATTLE. Fa. Indeed I do. I do not know any murders half so bloody.
  • 65. THE TRANSMIGRATIONS OF INDUR. At the time when fairies and genii possessed the powers which they have now lost, there lived in the country of the Bramins, a man named Indur, who was distinguished, not only for that gentleness of disposition and humanity towards all living creatures, which are so much cultivated among those people, but for an insatiable curiosity respecting the nature and way of life of all animals. In pursuit of knowledge of this kind he would frequently spend the night among lonely rocks, or in the midst of thick forests; and there under shelter of a hanging cliff, or mounted upon a high tree, he would watch the motions and actions of all the animals that seek their prey in the night; and remaining in the same spot till the break of day, he would observe this tribe of creatures retiring to their dens, and all others coming forth to enjoy the beams of the rising sun. On these occasions, if he saw any opportunity of exercising his benevolence toward animals in distress, he never failed to make use of it; and many times rescued the small bird from the pitiless hawk, and the lamb or kid from the gripe of the wolf and lynx. One day as he was sitting on a tree in the forest, a little frolicsome monkey, in taking a great leap from one bough to another, chanced to miss its hold, and fell from a great height to the ground. As it lay there unable to move, Indur espied a large venomous serpent advancing to make the poor defenceless creature his prey. He immediately descended from his post, and taking the little monkey in his arms, ran with it to the tree, and gently placed it upon a bough. In the meantime, the enraged serpent pursuing him, overtook him before he could mount the tree, and bit him in the leg. Presently, the limb began to swell, and the effects of the venom became visible over Indur’s whole
  • 66. frame. He grew faint, sick, and pale; and sinking on the ground was sensible that his last moments were fast approaching. As thus he lay, he was surprised to hear a human voice from the tree; and looking up, he beheld, on the bow where he had placed the monkey, a beautiful woman, who thus addressed him:—“Indur, I am truly grieved that thy kindness to me should have been the cause of thy destruction. Know that, in the form of the poor monkey, it was the potent fairy Perizinda to whom thou gavest succour. Obliged to pass a certain number of days every year under the shape of an animal, I have chosen this form; and though not mortal, I should have suffered extreme agonies from the bite of the serpent, hadst thou not so humanely assisted me. It is not in my power to prevent the fatal effect of the poison; but I am able to grant thee any wish thou shalt form respecting the future state of existence to which thou art now hastening. Speak then, before it be too late, and let me show my gratitude.”—“Great Perizinda!” replied Indur, “since you deign so bounteously to return my service, this is the request that I make; in all my transmigrations may I retain a rational soul, with the memory of the adventures I have gone through; and when death sets me free from one body, may I instantly animate another in the prime of its powers and faculties, without passing through the helpless state of infancy.”—“It is granted,” answered the fairy; and immediately, breaking a small branch from the tree, and breathing on it, she threw it down to Indur, and bid him hold it fast in his hand. He did so, and presently expired. Instantly, he found himself in a green valley, by the side of a clear stream, grazing amid a herd of antelopes. He admired his elegant shape, sleek, spotted skin, and polished spiral horns; and drank with delight of the cool rivulet, cropped the juicy herb, and sported with his companions. Soon an alarm was given of the approach of an enemy; and they all set off with the swiftness of the wind, to the neighbouring immense plains, where they were presently out of the reach of injury. Indur was highly delighted with the ease and rapidity of his motions; and snuffing the keen air of the desert, bounded away, scarcely deigning to touch the ground with his feet. This way
  • 67. of life went on very pleasantly for some time, till at length the herd was one morning alarmed with noises of trumpets, drums, and loud shouts on every side. They started, and ran first to the right, then to the left, but were continually driven back by the surrounding crowd, which now appeared to be a whole army of hunters, with the king of the country, and all his nobles, assembled at a solemn chase, after the manner of the Eastern people. And now the circle began to close, and numbers of affrighted animals of various kinds thronged together in the centre, keeping as far as possible from the dangers that approached them from all quarters. The huntsmen were now come near enough to reach their game with their arrows; and the prince and his lords shot at them as they passed and repassed, killing and wounding great numbers. Indur and his surviving companions, seeing no other means of escape, resolved to make a bold push toward that part of the ring which was the most weakly guarded; and though many perished in the attempt, yet a few, leaping over the heads of the people, got clear away: Indur was among the number. But while he was scouring over the plain, rejoicing in his good fortune and conduct, an enemy swifter than himself overtook him. This was a falcon, who, let loose by one of the huntsmen, dashed like lightning after the fugitives; and alighting upon the head of Indur, began to tear his eyes with his beak, and flap his wings over his face. Indur, terrified and blinded, knew not which way he went; and instead of proceeding straight-forward, turned round and came again toward the hunters. One of these, riding full speed with a javelin in his hand, came up to him, and ran the weapon into his side. He fell down, and with repeated wounds was soon despatched. When the struggle of death was over, Indur was equally surprised and pleased on finding himself soaring high in the air, as one of a flight of wild geese, in their annual migration to breed in the arctic regions. With vast delight he sprung forward on easy wing through the immense fields of air, and surveyed beneath him extensive tracts of earth perpetually varying with plains, mountains, rivers, lakes, and woods. At the approach of night the flock lighted on the ground,
  • 68. and fed on the green corn or grass; and at daybreak they were again on the wing, arranged in regular wedge-like body, with an experienced leader at their head. Thus for many days they continued their journey, passing over countries inhabited by various nations, till at length they arrived in the remotest part of Lapland, and settled in a wide marshy lake, filled with numerous reedy islands, and surrounded on all sides with dark forests of pine and birch. Here, in perfect security from man and hurtful animals, they followed the great business of breeding and providing for their young, living plentifully upon the insects and aquatic reptiles that abounded in this sheltered spot. Indur with great pleasure exercised his various powers of swimming, diving, and flying; sailing round the islands, penetrating into every creek and bay, and visiting the deepest recesses of the woods. He surveyed with astonishment the sun, instead of rising and setting, making a complete circle in the heavens, and cheering the earth with a perpetual day. Here he met with innumerable tribes of kindred birds varying in size, plumage, and voice, but all passing their time in a similar manner, and furnished with the same powers for providing food and a safe retreat for themselves and their young. The whole lake was covered with parties fishing or sporting, and resounded with their loud cries; while the islands were filled with their nests, and new broods of young were continually coming forth and launching upon the surface of the waters. One day, Indur’s curiosity having led him at a distance from his companions to the woody border of the lake, he was near paying dear for his heedlessness; for a fox, that lay in wait among the bushes, sprung upon him, and it was with the utmost difficulty that by a strong exertion he broke from his hold, not without the loss of some feathers. Summer now drawing to an end, the vast congregation of water-fowl begun to break up; and large bodies of them daily took their way southward, to pass the winter in climates where the waters are never so frozen as to become uninhabitable by the feathered race. The wild geese, to whom Indur belonged, proceeded with their young ones, by long daily journeys across Sweden, the Baltic sea,
  • 69. Poland and Turkey, to Lesser Asia, and finished their journey at the celebrated plains on the banks of the Cayster, a noted resort for their species ever since the age of Homer, who in some very beautiful verses has described the manners and actions of the various tribes of aquatic birds in that favourite spot.[1] Here they soon recruited from the fatigue of their march, and enjoyed themselves in the delicious climate till winter. This season, though here extremely mild, yet making the means of sustenance somewhat scarce, they were obliged to make foraging excursions to the cultivated lands in the neighbourhood. Having committed great depredations upon a fine field of young wheat, the owner spread a net on the ground, in which Indur, with several of his companions, had the misfortune to be caught. No mercy was shown them, but as they were taken out one by one, their necks were all broken. 1. Not less their number than th’ embodied cranes, Or milk-white swans on Asia’s wat’ry plains, That o’er the windings of Cayster’s springs Stretch their long necks, and clap their rustling wings Now tower aloft, and course in airy rounds; Now light with noise; with noise the field resounds.—Pope’s Homer. Indur was not immediately sensible of the next change he underwent, which was into a dormouse, fast asleep into a hole at the foot of a bush. As it was in a country where the winter was pretty severe, he did not awake for some weeks; when a thaw having taken place, and the sun beginning to warm the earth, he unrolled himself one day, stretched, opened his eyes, and not being able to make out where he was, he roused a female companion whom he found by his side. When she was sufficiently awakened, and they both began to feel hungry, she led the way to a magazine of nuts and acorns, where they made a comfortable meal, and soon fell asleep again. This nap having lasted a few days, they awaked a second time, and having eaten, they ventured to crawl to the mouth of their hole, where, pulling away some withered grass and leaves,
  • 70. they peeped out into the open air. After taking a turn or two in the sun, they grew chill, and went down again, stopping up the entrance after them. The cold weather returning, they took another long nap, till, at length, spring being fairly set in, they roused in earnest, and began to make daily excursions abroad. Their winter-stock of provisions being now exhausted, they were for some time reduced to great straits, and obliged to dig for roots and pig-nuts. Their fare was mended as the season advanced, and they made a nest near the bottom of a tree, where they brought up a young family. They never ranged far from home, nor ascended the higher branches of the tree, and passed great part of their time in sleep, even during the midst of summer. When autumn came, they were busily employed in collecting the nuts, acorns, and other dry fruits that fell from the trees, and laying them up in their storehouses underground. One day, as Indur was thus closely engaged at some distance from his dwelling, he was seized by a wildcat, who, after tormenting him for a time, gave him a gripe, and put him out of his pain. From one of the smallest and most defenceless of animals, Indur found himself instantly changed into a majestic elephant, in a lofty forest in the isle of Ceylon. Elated with this wonderful advancement in the scale of creation, he stalked along with conscious dignity, and surveyed with pleasing wonder his own form and that of his companions, together with the rich scenery of the ever-verdant woods, which perfumed the air with their spicy odour, and lifted their tall heads to the clouds. Here, fearing no injury, and not desirous to do any, the gigantic herd roamed at large, feeding on the green branches which they tore down with their trunks, and bathing in deep rivers during the heat of the day; and, reposing in the depths of the forests, reclined against the massy trunks of trees by night. It was long before Indur met with any adventure that could lead him to doubt his security. But, one day, having penetrated into a close entangled thicket, he espied, lurking under the thick covert, a grim tiger, whose eyes flashed rage and fury. Though the tiger was one of the largest of his species, yet his bulk was trifling compared with
  • 71. that of an elephant, a single foot of which seemed sufficient to crush him; yet the fierceness and cruelty of his looks, his angry growl, and grinning teeth, struck some terror into Indur. There was little time, however, for reflection: for when Indur had advanced a single step, the tiger, setting up a roar, sprung to meet him, attempting to seize his lifted trunk. Indur was dexterous enough to receive him upon one of his tusks, and exerting all his strength, threw the tiger to a great distance. He was somewhat stunned by the fall, but recovering, renewed the assault with redoubled fury. Indur again, and a third time, threw him off; after which the tiger, turning about, bounded away into the midst of the thicket. Indur drew back, and rejoined his companions, with some abatement in the confidence he had placed in his size and strength, which had not prevented him from undergoing so dangerous an attack. Soon after, he joined the rest of the herd, in an expedition beyond the bounds of the forest, to make depredations on some fields of maize. They committed great havoc, devouring part, but tearing up and trampling down much more; when the inhabitants taking the alarm, assembled in great numbers, and with fierce shouts and flaming brands drove them back to the woods. Not contented with this, they were resolved to make them pay for the mischief they had done, by taking some prisoners. For this purpose they enclosed a large space among the trees with strong posts and stakes, bringing it to a narrower and narrower compass, and ending at last in a passage only capable of admitting one elephant at a time. This was divided into several apartments, by strong cross-bars, which would lift up and down. They then sent out some tame female elephants bred to the business, who approaching the herd of wild ones, inveigled the males to follow them toward the enclosures. Indur was among the first who was decoyed by their artifices; and with some others following heedlessly, he got into the narrowest part of the enclosure, opposite to the passage. Here they stood awhile, doubting whether they should go farther. But the females leading the way, and uttering their cry of invitation, they ventured at length to follow. When a sufficient number was in the passage, the bars
  • 72. were let down by men placed for that purpose, and the elephants were fairly caught in a trap. As soon as they were sensible of their situation, they fell into a fit of rage, and with all their efforts endeavoured to break through. But the hunters throwing nooses over them, bound them fast with strong ropes and chains to the post on each side, and thus kept them without food or sleep for three days; when being exhausted with hunger and fatigue, they gave signs of sufficient tameness. They were now let out one by one, and bound each of them to two large tame elephants with riders on their backs, and thus without resistance were led away close prisoners. They were then put into separate stables, and by proper discipline, were presently rendered quite tame and gentle. Not long after, Indur, with five more, was sent over from Ceylon to the continent of India, and sold to one of the princes of the country. He was now trained to all the services elephants are there employed in; which were, to carry people on his back in a kind of sedan, or litter, to draw cannon, ships, and other great weights, to kneel and rise at command, make obeisance to his lord, and perform all the motions and attitudes he was ordered. Thus he lived a long time well fed and caressed, clothed in costly trappings on days of ceremony, and contributing to the pomp of Eastern royalty. At length, a war broke out, and Indur came to be employed in a different scene. After proper training he was marched with a number of his fellows, into the field, bearing on his back a small wooden tower, in which were placed some soldiers with a small field-piece. They soon came in sight of the enemy, and both sides were drawn up for battle. Indur and the rest were urged forward by their leaders wondering at the same time at the scene in which they were engaged, so contrary to their nature and manners. Presently, all was involved in smoke and fire. The elephants advancing, soon put to flight those who were drawn up before them; but their career was stopped by a battery of cannon, which played furiously against them. Their vast bodies offered a fair mark to the balls, which presently struck down some, and wounded others. Indur received a shot on one of his tusks, which broke it, and put him to such pain
  • 73. and affright, that, turning about, he ran with all speed over the plain; and falling in with a body of their own infantry, he burst through, trampling down whole ranks, and filling them with terror and confusion. His leader having now lost all command over him, and finding him hurtful to his own party, applied the sharp instrument he carried to the nape of his neck, and driving it in with all his force, pierced his spinal marrow, so that he fell lifeless to the ground. In the next stage of his existence, Indur, to his great surprise, found even the vast bulk of the elephant prodigiously exceeded; for he was now a whale of the largest species, rolling in the midst of the arctic seas. As he darted along, the lash of his tail made whirlpools in the mighty deep. When he opened his immense jaws he drew in a flood of brine, which, on rising to the surface, he spouted out again in a rushing fountain, that rose high in the air with the noise of a mighty cataract. All the other inhabitants of the ocean seemed as nothing to him. He swallowed, almost without knowing it, whole shoals of the smaller kinds; and the larger swiftly turned aside at his approach. “Now,” he cried to himself, “whatever other evils await me, I am certainly secure from the molestation of other animals; for what is the creature that can dare to cope with me, or measure his strength with mine?” Having said this, he saw swimming near him a fish not a quarter of his length, armed with a dreadful row of teeth. This was a grampus, which directly flying upon Indur, fastened on him, and made his great teeth meet in his flesh. Indur roared with pain, and lashed the sea, till it was all in a foam, but could neither reach nor shake off his cruel foe. He rolled over and over, rose and sunk, and exerted all his boasted strength; but to no purpose. At length, the grampus quitted his hold, and left him not a little mortified with the adventure. This was, however, forgotten, and Indur received pleasure from his new situation, as he roamed through the boundless fields of ocean, now diving to its very bottom, now shooting swiftly to its surface, and sporting with his companions in unwieldly gambols. Having chosen a mate, he took his course with her southward, and, in due time, brought up two young ones, of