Cloud Economics
Already three out of four companies in Germany and about half of the Austrian companies, each with more than 20 employees, rely on the cloud. The partial elimination of data centers and the increased use of cloud technologies is leading to a shift in costs from capital expenditure (capex) to operating expenditure (opex).
Increasing expenditure on applications and data in the cloud, as well as a lack of transparency of costs and their billing, can have significant financial consequences. Possible consequences of inadequate cloud cost management can include an unexpected rise in costs, excessive payments for unused resources or inefficiently used services. Developers often underestimate these effects and possible consequences for the company. At the same time, financial managers often lack the technical expertise to detect which levers can be used to control cloud costs.
As a result, companies and their executives need to question existing financial processes and structures to empower and enforce development teams to manage their cloud costs.
However, the challenges lie less in the cloud itself but more in structures and processes that cannot keep up with the cloud dynamics.
EFS Cloud Economics follows the FinOps and Cloud Financial Management approach.
The success of the cloud initiative depends largely on a holistic view of the costs of cloud applications and the structures and processes of IT controlling and IT governance in companies.
Cloud Economics offers a methodical approach to implement Cloud Financial Management in your company.
Inform & Operate:
The first step is to understand Cloud Economics and to create transparent handling and incentives in cost management.
Design & Optimize:
Based on this, scalable IT architectures are created with efficient cost structures in order to optimize the use of IT services.
Change the frame:
The creation of a bi-modal system consisting of on premise and the cloud, and the associated development towards a service-oriented organization that acts as a service provider, completes the integration.
Ideal Typical Interaction Cloud Economics x DevOps
Beyond the methodological approach, Cloud Economics entails an organizational change. Cloud Economics as an organizational unit sees itself as an enabler and ambassador within the company. At the interface between IT and Finance the Cloud Economics team is to be understood as a service provider and sparring partner.
The Cloud Economics team is a centralized team that integrates stakeholders to a) generate buy-ins and b) coordinate internal/external Cloud Economics initiatives to build knowledge, collect best practices and create recyclable models.
Key principles of Cloud Economics are:
- Close exchange of the dev teams
- Business value guide decisions
- Everyone takes responsibility for their cloud consumption
- Accessibility Cloud Economics reports
- Understanding and leveraging the variable cloud cost model
Cost Optimization & Monitoring
From the conception to the operation of cloud use cases, in addition to the costs of cloud services, costs can arise in different areas of the company.
The holistic consideration of direct and indirect costs in terms of a TCO calculation, as well as the consideration of different scaling effects, lay the foundation for a cost benefit analysis and thus full cost truth and transparency. The consideration over the entire life cycle creates security and trust with all stakeholders.
To ensure that the costs of cloud services remain predictable and controllable, EFS Consulting works with customers to develop control models and tools for effective and efficient use of cloud infrastructures. This forms the basis for further analyses, benchmarking, or anomaly detection.
EFS Consulting provides extensive experience in the implementation of IT transformation projects. Coupled with expertise in areas such as cost optimization and product costing, we are able to take a holistic view of cloud economics. Through an agile approach, we also ensure a fast, flexible and efficient implementation of projects.
