Chronosphere joins FinOps Foundation to help tackle cost and rightsizing challenges

Over the past several years, an important emerging trend that I’ve had the privilege to get a front row seat for: The formation of centralized FinOps teams within cloud centers of excellence.

Many people think of FinOps as simply “cloud cost control” but it’s much more than that. Mature FinOps practices will, of course, look for opportunities to reduce cloud costs, but more importantly, they work to embed financial governance and accountability into engineering and cloud operations teams.

This movement’s rapid growth is staggering, the FinOps Foundation, formed in 2019, currently boasts more than 10,000 members and 90% of the Fortune 50 now have FinOps teams.

Another trend that is emerging much more recently than FinOps is the formation of central observability teams. These functions are responsible for offering observability as a service to the company or business units. The central observability team supports the engineers and developers that deliver your service to end users. The major responsibilities they must consider are: defining observability standards and practices (like the Observability Data Optimization Cycle); delivering and managing tooling and data to engineering teams; and measuring reliability and stability of tools.

These teams have similar structure to a central security team that supports best practices and adoption, but ultimately security is everyone’s job and the central team is truly an enablement function that is executed by the hands-on DevOps functions. While this movement is much earlier than the FinOps movement, already 82% of enterprises have established this function or have plans to do so, according to our upcoming 2023 Enterprise observability survey.

Besides the fact both functions centralize governance and best practice hubs — centers of excellence or communities of practice — and staff them with full-time practitioners, what else do FinOps and central observability teams have in common? When executed at high levels of maturity, these teams are tightly linked in a mutually beneficial and symbiotic relationship.

There’s been an immense amount of interest and discussion around observability costs lately, and for many companies it’s the second or third more expensive line item, after their cloud bill.

In the popular newsletter, The Pragmatic Engineer, Gergely Orosz reported that observability SaaS tools were one of the highest priority areas to cut spending, second only to cloud infrastructure spending. In our own upcoming survey, we found that 61% of companies say that reducing observability costs is a very important or extremely important initiative for them right now. Who knows more about cloud cost optimization than FinOps teams?

The FinOps team can advise the observability function on rolling out accountability measures such as chargeback, showback, or quota allocations. A modern observability tool should show which teams/applications/departments consume the observability tool license so they can then be allocated or charged back to the right  department.

For example, if team A is consuming 90% of the observability license, it would make sense to allocate 90% of the observability costs to that team. Additionally, FinOps teams can help build a program plan to get costs under control, and keep them consistently optimized.

A powerful tactic that FinOps professionals can look for during  optimizations is to perform infrastructure and application “rightsizing.” This is the process of properly matching actual infrastructure or application usage to the size that was provisioned. It’s common to find that systems are overprovisioned by 75%+ simply because the engineering team wasn’t sure what the footprint of the workload would look like until it was in production.

The key to rightsizing is to show engineering teams granular and trusted data on actual system usage compared to the capacity, and model that they can resize their resources without affecting performance. That’s where the central observability team comes in: They already work closely with engineering on performance data and can show the peaks and valleys over a specific time period.

In many cases, I’ve found that the FinOps teams and the central observability teams operate in silos and rarely communicate. It’s time for this to change. This is why we’re the first observability vendor to join the FinOps Foundation and are working to start an observability costs working group within the foundation.

On a personal note, I’m thrilled to see two worlds I’m passionate about come together and as an early Governing Boardmember emeritus of the FinOps Foundation, I’m excited to get reinvolved with a foundation that has provided immense value to thousands of practitioners.

Interested in seeing how Chronosphere can reduce your observability costs? Contact us for a demo today.