Azure FinOps Essentials

In partnership with

Hi there, and welcome to this week's edition of Azure FinOps Essentials! 🎉

In this edition, I’m excited to share highlights from my recent presentation at AzureFest, titled "Empowering Developers with FinOps: Mastering Cost Efficiency in the Cloud." During the session, I discussed why FinOps is so important for developers and how it directly impacts their work.

We’ll explore key takeaways from the talk, including the concept of shift left in cost management, understanding cloud costs (usage vs. rate), and how developers can play a pivotal role in controlling those costs. If you missed the session, this edition will bring you up to speed on how FinOps can help you create more cost-efficient cloud solutions.

Let’s dive into the world of cost-effective cloud development!

Cheers,
Michiel

Why Should Developers Care About FinOps?

In the world of development, the list of responsibilities for developers has been growing rapidly. First, it was just coding, then came DevOps, followed by DevSecOps, BizSecOps, and the demand to be T-shaped, full-stack, and constantly agile. Now, developers are hearing about FinOps—another term in an already crowded toolbox. Naturally, many developers wonder, “Why should I care about FinOps? Isn’t that a finance team's responsibility?”

That’s exactly why I wanted to give this talk at AzureFest: to bring awareness to FinOps and explain why it’s critical for developers, too.

A Bit of History

When the cloud was first introduced, it was marketed as a magical solution—scalable, fast, and cheap. Many companies embraced it eagerly, moving their applications and infrastructure to platforms like Azure. But over time, they realized that the cloud wasn’t always as cheap as it seemed. Costs spiraled, and many organizations started asking uncomfortable questions:

• Are we cost-effective in the cloud?

• Are we paying too much for our services?

• Is the cloud still the right option for us?

• Can we forecast our cloud costs accurately?

These fears stem from the fact that the cloud operates very differently from the traditional way companies used to run data centers. In the past, companies worked with CapEx—they bought machines, which were depreciated over a few years, providing clear cost control and predictability. But the cloud doesn’t operate like a data center; it’s dynamic, and it requires a different mindset.

The Power Shift to Developers

Alongside this transition, developers were given unprecedented power—they could spin up virtual machines and services with just a few clicks. This autonomy allowed teams to move fast, innovate, and deploy with ease. But with that power came responsibility. Now, developers are not only tasked with building and deploying applications, but they are also directly impacting their organization’s cloud spend.

This is why FinOps matters for developers. Understanding cloud costs and learning how to manage them efficiently is no longer just a finance team’s job—it’s a developer's responsibility, too. By gaining visibility into how their choices affect costs, developers can make smarter decisions and help ensure their applications remain cost-effective while delivering the required performance.

Understanding Cloud Costs and Developer Responsibility

Once developers start paying attention to FinOps, the first question is often: What is cloud cost? The simple equation is:

Cloud Cost = Usage × Rate

Where:

• Usage refers to the resources you consume, such as compute power, storage, network traffic, and redundancy.

• Rates represent the pricing model for those services, which vary depending on factors like the type of instance, storage tier, or region.

The Big Shift: Paying for What You Provision

In the cloud, you don’t just pay for what you actively use—you pay for what you provision. This means you incur costs even for resources sitting idle or underutilized. It’s a crucial shift that requires developers to think differently about resource management and cost control.

Controlling Cloud Costs: Two Dials

To manage cloud costs effectively, you can tweak two areas:

1. Cost Avoidance: By right-sizing resources, reducing waste, and scaling intelligently, teams can minimize unnecessary spending.

2. Rate Optimization: This involves selecting the most cost-efficient pricing options, like using reserved instances or choosing lower-cost regions for certain workloads.

In my presentation at AzureFest, I explained that developers are critical to cost avoidance. Decentralized teams, like value streams or feature teams, understand their applications best and are in the position to make impactful decisions around cost control. They can determine which resources are over-provisioned, when scaling is appropriate, and where waste can be reduced.

The Importance of Ownership

Effective cost management also requires ownership:

• Teams need clear accountability over their cloud resources and costs.

• With ownership comes awareness of budgets, empowering teams to make informed decisions about building features in a cost-efficient way.

During the presentation, I demonstrated some of the key tools and techniques that developers and teams can use to take ownership of their costs and make the cloud a more efficient environment for their applications.

When Should Developers Focus on Cloud Costs? Introducing Shift Left for FinOps

Once developers understand that they have control over cloud costs, the natural next question is "When should I start thinking about cost?" The answer lies in a concept already familiar to many developers from DevOps and security practices: Shift Left. This principle emphasizes that addressing issues earlier in the lifecycle is always cheaper and easier than dealing with them later. And just like in DevOps and security, this concept applies directly to FinOps.

By incorporating cost considerations earlier in the development process, you can avoid costly mistakes down the road. This means adopting cost-awareness from the very beginning of your project lifecycle.

Cost Awareness Starts with Requirements

FinOps doesn't just start when your application is running in the cloud. It should already be considered in the requirements phase:

• Make cost part of your definition of done when gathering requirements.

• Discuss cloud costs with your business team and stakeholders early on.

• Use tools like the Azure Pricing Calculator to get a realistic estimate of how much a given architecture will cost.

Cost Control During Development

When you're actually building the solution, keep cost architecting principles in mind. Implement feedback loops in your development process to track the cost impact of your architecture and resource decisions as you go. Ensure you're using proper cost allocation so that every resource is accounted for and owned by a specific team or project.

During my presentation, I demonstrated Infracost, a tool that integrates with GitHub and Terraform to show developers the cost impact of their infrastructure changes before they’re even deployed. This "shift left" approach to cost management allows developers to catch costly decisions early, before they hit production. I’ll dive deeper into this tool in a future edition.

Continuous Monitoring in Production

Once the application is running, developers should continue their FinOps journey by monitoring cloud costs and usage in real-time. Implement anomaly detection to spot unusual spikes in cost. Use budgets and forecasts to keep track of spending and stay ahead of potential overruns. Finally, set up automated responses to cost events—whether it's scaling down unused resources or investigating unexpected spikes.

A Broader Look at FinOps

After explaining the "Shift Left" concept, I introduced the audience to FinOps as a broader framework. It’s not just about cutting costs, but about maximizing value. I explained the core principles of FinOps, emphasizing that the goal is not purely about saving money, but about ensuring every dollar spent brings value. Developers play a crucial role in this value-maximization process by making informed decisions about resource use, architecture, and scaling throughout the application lifecycle.

Conclusion: Bringing FinOps to Developers

Delivering this talk at AzureFest was an exciting experience. With over 340 attendees at the event, a good number joined my session on FinOps, which is a great sign of growing interest. As a developer for many years, I know how vital it is to introduce this topic to the developer community, helping us all gain a better understanding of how our decisions directly impact cloud costs.

FinOps is not just for finance teams—it’s something developers can embrace and take action on. By adopting FinOps principles and shifting left, we can all ensure that the cloud is being used effectively and efficiently.

This is just the start, and I’ll continue exploring the different aspects of FinOps in upcoming editions. Stay tuned as we dive deeper into tools, practices, and strategies that developers can use to drive value and optimize cloud spending.

The Daily Newsletter for Intellectually Curious Readers

• We scour 100+ sources daily

• Read by CEOs, scientists, business owners and more

• 3.5 million subscribers

Sign up today!

Please help me by visiting my sponsor. And interested in sponsoring yourself, then visit the sponsor page.

Thanks for reading this week’s edition. Share with your colleagues and make sure to subscribe to receive more weekly tips. See you next time!

P.S. I have another newsletter about GitHub, Azure, and .NET news. Subscribe as well to keep informed:

Want more FinOps news, then have a look at FinOps Weekly by Victor Garcia