What do you do if your Cloud Computing project is exceeding its budget?

As a FinOps Professional and a Consultant, few things that come to mind while the project is exceeding its budget is to first of all (1) evaluate the current situation and identify the areas where costs are exceeding the budget and determine the root causes of the overruns. (2) Next I will identify the cost drivers which might be (infra usage, scalability, orphaned resources, inefficient resource allocation, etc) and I will prioritize the spending. (3) I will implement cost controls such as continuous monitoring, setting up alerts, auto shutdown whenever possible, tagging, etc... P.S: I've read answer of few experts and found that they considered negotiation with providers, but i would look interally first and try to bring a solution.

If a Cloud Computing project exceeds its budget, it's crucial to take immediate action. Audit resource usage to identify inefficiencies and optimize costs through rightsizing or utilizing reserved instances. Review contracts for potential cost-saving opportunities or renegotiation. Consider adjusting the project scope to align with budget constraints. Deploy proactive monitoring strategies to detect cost overruns early. Engage stakeholders to align expectations and explore alternative solutions. Leverage AI-driven data access patterns and data lifecycle storing tiering techniques for cost-effective data management. If on AWS; use Cost Explorer and Trusted Advisor to track insights and recommendations to aid this process.

First of all, Identify the Root Cause: Is it a problem of resources, architecture, or other factors? Then, negotiate with cloud providers, and discover other opportunities to negotiate pricing. Finally, Monitor and Adjust continuously to adjust strategies and tactics.

When a cloud computing project exceeds its budget, swift action is crucial. Begin by assessing & mitigating overspending. Conduct a thorough analysis to pinpoint the factors contributing to the budget overrun, such as unexpected resource consumption or inefficient cost management practices. Optimize resource utilization by rightsizing instances, leveraging reserved capacity, and implementing cost-saving strategies like spot instances. Transparently communicate with stakeholders about the budget situation, outlining steps taken to address it and potential impacts on project timelines or scope. If needed, reallocating funds from lower-priority areas or seeking additional funding can help.

Review your cloud provider's billing and usage reports to identify which resources are consuming the most budget. Determine the primary cost drivers contributing to the budget overrun. This could include factors such as data transfer costs, storage fees, compute instance usage, or premium support services. Analyze your resource allocation and utilization patterns to identify opportunities for optimization. Leverage cloud provider's cost management tools and features, such as budget alerts, cost allocation tags, and cost explorer dashboards, to monitor and control spending in real-time. Implement cost-saving strategies such as reserved instances, spot instances, or discounted pricing options offered by your cloud provider.

Once you've audited your cloud resource usage, focus on optimizing costs to bring the project back within the budget. Investigate opportunities to right-size instances, leverage reserved or spot instances, optimize storage tiers, and eliminate unnecessary or idle resources. Explore cost-saving services like AWS Cost Explorer and AWS Budgets to track and manage your expenditure. Collaborate with your team and cloud experts to identify and implement efficient strategies.

In terms of optimization, first look at the largest costs to anyone on the cloud: storage, compute, & databases, and network egress. You first should make sure you are not buying powerful instances to run your app that spend most of the day idle. You should ideally use 80% on average of any instance and only buy more or go larger slowly to support your users activity. Next, remove data that no longer needs to exist. If you are not sure, archive it in the cloud's least expensive tier until you know if you do need it. Next, buy savings plans or reserved instances so your compute you do pay for is heavily discounted. Finally, monitor costs for anomalies and take action quickly. This means any spikes in cost/usage need immediate attention.

After pinpointing unnecessary expenses, optimize your cloud usage by transitioning to a more cost-effective service tier or implementing auto-scaling features to align resources with demand dynamically. Explore alternatives such as reserved instances or spot instances to secure discounts in exchange for usage commitments or leveraging off-peak pricing, thereby preventing overpayment for underutilized capacity.

Action: Leverage cost-optimization features and practices. This includes choosing the right pricing model (On-Demand, Reserved Instances, Savings Plans), using Auto Scaling to adjust resources based on demand, and adopting serverless technologies where appropriate. Goal: Ensure that you're only paying for the resources you need and taking advantage of discounts and scaling features to minimize costs.

🔦💶💷💸💴💵🪔 Effective Cost management is key for avoiding budget overrun. In my view keep clear visibilty on: 1.Cloud Cost Management Priciples - Visibility, Optimization, Measure Unit Cost (CoGS) 2.Cloud management tools -CLOUDhealth tech, Harness Cloud Cost Management , AWD Cost Explore, GCP Billing , Azure Cost Management and Billing, Apptio Cloudadaptibility, Spot by NetApp, Kubecost 3.Best Practices -Predict Surge -Strategic Budgeting -Innovate with Cloud Optimization 🏗🛡💫🎯

If you are on any cloud, make sure you opt in for the best support package they have on offer. If you cannot spend the money, get the one that gives you business critical tickets that have 5 to 15 minute first response times. This will help you quickly get to the bottom of nasty outages. Next, whatever services you use most of, try and ask for a private pricing agreement (PPA). You may be surprise at the discounts you can receive if you commit to a base amount of spend each year. Next, if you buy 3rd party services to use on your cloud, if your cloud has a Marketplace see what contacts you can sign and get discounts on products and services you already pay for. This way you can get discounts in all areas not only the cloud you are in.

Closely review your cloud service provider contracts and pricing models. Analyze the terms, discounts, and any potential hidden fees or penalties. Identify opportunities to renegotiate the contracts, such as committing to longer-term usage, leveraging volume discounts, or exploring alternative pricing options. Diligent contract review can help you regain control of the project budget.

Thoroughly review your cloud provider's contracts and service agreements to uncover clauses permitting budget flexibility or cost adjustments, and explore opportunities for negotiations or alternative pricing models. Engage in discussions with the provider regarding budget concerns, particularly for long-term contracts, as they may offer tailored solutions to align costs with your financial objectives.

If a cloud computing project begins to exceed its budget, my initial step would involve implementing best practices such as setting up comprehensive cost monitoring and alert systems. In situations where costs surpass the allocated budget, I would conduct a thorough review of the project requirements. Prioritizing the most critical functionalities is crucial to maintaining project momentum while staying aligned with strategic objectives. This approach enables the team to focus on delivering core value, followed by a phase of optimization and cost-efficiency improvements to enhance the overall project without compromising quality or scope.

Action: If you have committed spend contracts with cloud providers (e.g., AWS Enterprise Discount Program), review these agreements to understand terms and conditions. Goal: Ensure you are maximizing the benefits from these contracts and not overlooking any cost-saving clauses or discounts you're entitled to.

Collaborate with your team and stakeholders to identify non-essential features or functionalities that can be deprioritized or postponed. Focus on delivering the core objectives within the allocated budget, rather than trying to do everything at once. Communicate the revised scope transparently and gain consensus from all involved parties.

Consider reducing the footprint scope of your solution. Does it need to be on a VM with 1024GB of RAM with dedicated backups in every region? Probably not. Can you containerize your application or workflow and utilize Container Applications? Scoping the size and actual NFR needs in the cloud often saves a substantial amount.

If cost optimization efforts fall short, consider reassessing the project scope to identify features or performance targets that can be scaled back without compromising objectives. Prioritize tasks and deliverables based on their value contribution, delaying or removing less critical components to maintain the project within budget constraints.

Action: Review the project scope and requirements. Determine if there are features or services that are not critical to the core functionality and can be scaled back or postponed. Goal: Align project scope with budget constraints without compromising critical business needs.

If your cloud computing project continues to exceed its budget despite optimization efforts, it may be necessary to reassess the project scope. Evaluate if there are features or performance goals that can be scaled back without compromising the project's overall objectives. Prioritize tasks and deliverables based on their value to the project. Delaying or eliminating less critical components can help align the project with budget constraints while still maintaining its core objectives. Adjusting the scope ensures that resources are allocated efficiently and effectively, ultimately helping to keep the project financially viable.

When your Cloud Computing project is over budget, it's essential to monitor the financial situation closely and continuously. Set up regular budget reviews, tracking actual spend against the allocated funds. Analyze cost trends, identify any new areas of overspending, and proactively address them. Leverage cloud cost management tools to gain visibility into your resource utilization and spending patterns.

Cloud expenses can have a way of sneaking-up on companies who are not prepared for them and may be embarking on some of their first Cloud initiatives. This is especially common with Public Cloud solutions where some of the greatest features such as scalability, elasticity, and consumption or usage-based billing can also be the biggest challenges in terms of budgeting and financial forecasting. Close monitoring, planning-ahead, and limiting the burstability of your Cloud services and solutions can help to keep projects on-budget and ensure a smoother experience for many companies. Additionally, be sure to put guardrails and processes in place to govern who, within your team, has the ability to subscribe to or modify subscribed services.

In order to keep a close eye on things, you will want to setup billing alerts so you can deal with any anomalies quickly before you owe ten thousands dollars extra on your bill. Next, if your cloud has a way to keep a copy of your cost and usage data, make sure you do that and create usage and billing charts in your favorite BI tooling. This will help you track your spend and identify spend that is not normal and may be suspect. The closer you monitor your spend, the better and easier it will become to identify when you may be heading into troubled waters.

Action: Implement a continuous monitoring strategy using cloud management tools to track costs in real-time. Set up alerts for budget thresholds to prevent overspending. Goal: Stay informed about your spending patterns and react quickly to any unexpected surges in usage.

Regular monitoring of cloud expenses is essential to maintain control over your budget in a cloud computing project. Implementing a robust monitoring system allows you to track how your budget is being utilized and enables you to make timely adjustments as needed. Utilize cloud management tools that offer insights into resource usage patterns and cost trends, helping you identify areas for optimization. By being proactive in monitoring, you can prevent budget overruns from occurring repeatedly and ensure financial discipline throughout your cloud project lifecycle.

Engaging stakeholders is crucial when facing budgetary challenges in a cloud computing project. This involves communicating the budget situation effectively to team members, management, and financial controllers. Collaborating with stakeholders allows for a collective effort in finding solutions that balance technical requirements and financial constraints. By fostering transparency and shared responsibility, stakeholders can contribute to more sustainable project management practices. Ultimately, involving stakeholders ensures that budget management becomes a collaborative effort, leading to better decision-making and project outcomes.

- Review the Budget: Look at your budget to understand where the costs are exceeding the estimates. Identify the areas where the overspending is occurring. - It could be using more resources, not using them efficiently, or unexpected costs. - Establish cost controls and monitoring mechanisms to track spending and prevent further budget overruns. Set alerts for budget thresholds to be notified of potential issues early. - If needed, consult with cloud computing experts or financial advisors to get guidance on managing costs and optimizing your cloud environment. - Keep looking for ways to make your cloud setup better and cheaper.

Implement a Cloud Center of Excellence (CCoE): A CCoE can help set best practices, govern cloud usage, and ensure that cloud strategies align with business objectives. Opt for Multi-cloud or Hybrid Strategies: Sometimes, diversifying across multiple cloud providers or integrating cloud services with on-premises solutions can offer cost advantages. Leverage Cloud-native Services: Adopting cloud-native services like AWS Lambda for serverless computing or Amazon S3 for storage can offer significant cost savings compared to traditional architectures. Invest in Training: Ensure your team is well-versed in cloud cost management and optimization strategies. AWS offers specific training and certifications focused on cost optimization.