AWS Cloud Financial Management
What’s New in the AWS Well-Architected Cost Optimization Pillar
We recently released an updated version of the Cost Optimization pillar of the AWS Well-Architected Framework with a heavy focus on Cloud Financial Management. Since releasing the AWS Well-Architected Tool at re:Invent 2018, we’ve continued to work with customers, partners, and other AWS subject matter experts to understand how we can improve the tool and our Framework whitepapers.
We have seen significant positive changes in the industry around Cost Optimization (CO) and Cloud Financial Management (CFM). These changes include increases in adoption, interest, and maturity in customer CO/CFM activities, a rapid growth in the number of industry CO/CFM practitioners and specialists, and growing interest and attendance at AWS events for cost-related sessions. We have also continued to innovate in our existing AWS services as well as introducing new services that can help with your Cost Optimization and Cloud Financial Management practices.
Despite all of these improvements, organizations still continue to pay for resources when they are idle, overprovision resources, and lack visibility into their workloads’ efficiency. There remains a significant gap in investment in Cost Optimization when compared to other Well-Architected pillars, such as security and operational excellence. Ask yourself:
- Is there an individual or team in my organization who is responsible for implementing CO/CFM initiatives?
- Are there CO/CFM dashboards alongside your operations dashboards throughout the workplace?
- If a workload’s efficiency suddenly decreases, is there a process to alert, triage, and fix the inefficiency?
- Is cost everyone’s responsibility?
This is where the industry needs to be to unlock, and accelerate economic value realization of the cloud!
Given these industry observations, and the pace of AWS innovation, we have released a new version of the AWS Well-Architected Tool and whitepapers. These updates help ensure that all of our customers, regardless of their cloud experience, maturity, and organization size, can answer the question, “Am I Well-Architected?”, and have a path for achieving it.
What’s changed?
Introducing Cloud Financial Management
The most significant change is the introduction of Cloud Financial Management. CFM is now the first section in the Cost Optimization whitepaper, and has a new, first question in the AWS Well-Architected Tool. To adopt the cloud efficiently, a fundamental change in organizations is required, and implementing Cloud Financial Management delivers this change. CFM means having a dedicated and focused function that will build your organization’s capability. By establishing a partnership between finance and technology, it helps finance to successfully operate with the pace of the cloud, and increases financial awareness in the consumers of the cloud. CFM also focuses on building a cost aware culture and ensures your business processes (existing or new) are also cost aware.
Licensing
Other vendors have made it more challenging (read: expensive) for you to continue to run your existing software the way you want to. We have added additional information on licensing to help you identify software that is more efficient for your workloads over the long term, remove cost through Open Source, and by aligning software cost to workload outcomes. We have introduced similar information for choosing the right third-party agreements and pricing, helping to ensure your associated costs scale with your outcomes, to maintain efficiency.
AWS Innovation
AWS continues to add new services and features for cost optimization. We have seen existing services add features to make them more efficient and to remove operational overhead, such as S3 Intelligent-Tiering. We’ve also introduced new services to help you find opportunities to save, such as AWS Compute Optimizer.
Savings Plans, one of the most important additions, is the new commitment-based discount pricing model that reduces the complexity and increases the flexibility of commitment-based discounting. Our update to the Well-Architected Cost Optimization pillar adds guidance for taking advantage of these changes. We’ve also taken this opportunity to remove older content that’s no longer relevant.
Real life examples
Another significant change in the Cost Optimization whitepaper is the addition of practical guidance. Leveraging the business value focus of CFM, you need to be aware that your cost optimization decisions are business decisions, not just technical best practices. We have added more real-life examples and commentary to ensure that the business context is well understood, and front of mind. For example, AWS provides many instance types and sizes available for a workload, and selecting the right instance type must include the analysis process. But spending two weeks of analysis to achieve a $5 monthly saving might not be the most cost-effective outcome for the business!
We also continue to build and maintain our Well-Architected labs for cost optimization with new services and topics, providing you hands-on guidance to implement the best practices in your organization.
It’s through these changes that we strive to continue to build our customer’s capabilities in Cost Optimization and Cloud Financial Management, to ensure they become fully self-sufficient in the discipline, and to ensure all existing, and new workloads are fully cost optimized. Take a look at the updated Cost Optimization whitepaper and try the updated AWS Well-Architected Tool in the AWS Management Console today.
A huge thank you to everyone who gives us feedback on the tool and whitepapers, and a special thank you to Levon Stepanian and Nataliya Godunok for their help on this all important update!
Learn more about the new version of Well-Architected and its pillars