Azure webinar series

Implement FinOps
on Azure
Welcome

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Meet our speakers

Daniel Feeney Jeff Amels Kevin Hwang

Group Finance Manager Cloud Financial Architect Finance Manager
Agenda Cloud economics refresh
FinOps overview
How Microsoft can help with your FinOps
Customer experiences
Q&A
Cloud economics refresh
Core benefits Technical benefits Scalability

of cloud Elasticity and on-

demand are a huge shift Availability

migration Improves how you

manage, maintain and
pay for your cloud Security and compliance
How you
consume Azure Capacity optimization

is different, but
drives substantial
benefits in key Financial benefits OPEX pricing models

areas Azure = flexibility

Get more out of what you Reduced datacenter footprint
pay for
+ move away from fixed
Staff productivity
and upfront spend

Sustainability
Unlock financial value in
the cloud
A digital transformation goes hand-in-hand
with a financial transformation

When shifting to the cloud, it is important to

understand how Azure will impact:

Financial Accounting Processes

position KPI

Financial benefits
You’ve spent all this time planning your business case…
how do you shift to executing it?

Microsoft Status quo (on-

Investments premises)

Azure Transformation Value

Migration
Cash flow

On-prem OPEX
Azure case
Microsoft
Invest- Status
Azure costs
Migra-
ments $95M
Quo
tion
Capex $63M
Azure Transformation Value
P&L

$63M Azure
Azure
Case
Y0 Y1 Y2 Y3 Y4 Y5 Costs Y6 Y7 Y8 Y9 Y10

Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10
 Reduced on-premises asset acquisition

Initial clean-up, right-sizing, and optimization

Continuous cost optimization

Implementing
a business case Resource tagging and spend categorization

Taking advantage of cloud native billing models

Azure Hybrid Benefit

Challenges of cloud
financial management
Enterprises today are faced with a complex cloud environment
Customers are looking for an effective solution to manage and optimize cloud spend
Cloud Cost Optimization

Cloud Financial Management Cloud Budget Cost Management

80%
Say that poor cloud financial management
69%
Overspend their cloud budget
57%
Worry daily about
has had a negative impact on their business by 25% cloud cost management

Cloud Complexity

Running millions of Multi-cloud environment Across business units and

cloud resources projects

References:
• Cloud Economics Management: Enabling Enterprise Agility and Financial Accountability | HCL Blogs (hcltech.com)
• How to avoid CIO and CFO clashes over cloud spend – TechRepublic
• The Importance of FinOps (dwcc.global)
Managing cloud spend across the organization
is becoming increasingly difficult

IT executives Finance teams Business units

We need to better understand We need to improve forecast We need to optimize the cloud
cloud spend across the company to accuracy of cloud spend and drive usage and costs of our projects to
ensure we are getting the most more accountability from project show an even stronger ROI.
from our budget. owners.
Current state of cloud financial management
Past Current state Challenges Impact

Technology teams had to

Success in quicker cloud Costs as after • Unexpected spikes in costs
get approvals from Finance service deployment thought • Degrading profitability
on what they will be
spending, what the costs
are, and outlook
Determination to meet • Cross-organizational
company goals and get
Inadequate conflicts
services up and running communication • Delay in critical projects

• Run into scaling issues

Faster and better product Lack of tech
• Slows or halts cloud
releases at lower costs innovation adoption

• Lack of team’s collaboration

Increasing need of cloud Misalignment on to set a robust
migration due to COVID cloud governance organizational-wide
governance strategy
What is FinOps
FinOps is a framework to that accelerates value
Operating models for Technical and Financial leadership: Share the same language and processes
to monitor cloud spend and maximize the value of cloud adoption.

Operating model
Tracking and Optimizing
allocating capacity
costs usage
Inform Operate Optimize
FinOps
Transparency in Definition of the Identify and
creating shared processes that measure
accountability by enable the efficiencies within
showing teams technical, financial optimization,
what they are and business unit accelerating the
Optimizing spending and why goals value of services
billing model
usage
consumed

Reference: www.finops.org
FinOps Management Process
Every major enterprise its own set of policies, procedures, and processes for scaled IT operations. A mutually
beneficial strategic cloud partnership depends on developing new governance structures and collaboratively
adapting operational practices for the public cloud.

Governance and operations Enable and automate

Strategic Operational Tactical

IT and Finance Responsibilities and Cloud Native Tools

IT Operating Model
Strategy processes and Connectors

Governance and
Cloud Governance Security Tagging Taxonomy
Control

Cost Optimization Cost Optimization Monitoring Infused Intelligence

Metrics and Improve and

Value Realization Azure FinOps
Reporting automate

FinOps strategic management process

Reference: www.finops.org
Common levers of the FinOps trade

Modernize & Rightsizing Schedule Optimize Reserve capacity

innovate Better utilize the Only run your license cost Achieve
Allow teams to installed capacity servers, when Cloud gives new significant
explore the and reduce costs you need options to discounts by
potential of within your them significant savings reserving capacity
Cloud environment on SW for your 24x7
licenses, like workloads
Windows Server
and SQL Server

Reference: www.finops.org
FinOps and DevOps
Removing barriers between FinOps and DevOps teams to increase the business value of cloud

Collaborative culture

Developers Operations Finance Operations

Inform

Operate

Optimize

Management Cost
Groups Policy Azure Advisor
Management
FinOps Team Structure
A Cloud Center of Excellence(CCoE) Stakeholders

A Cloud Center of
Excellence (CCoE) will Developers, Ops and Infrastructure
span both technical & Infrastructure Changes
financial teams with the
intent to:
Business Unit Owner FinOps
Manage the
Team Cloud
cloud strategy
Executive Sponsorship Providers
Manage
Governance
Finance Cost and Pricing
Share best Optimization
practices

Reference: www.finops.org
How can Microsoft help you
develop your FinOps practice?
Microsoft provides principles, tools and billing
constructs to help you manage your cost

Principles Billing Constructs Tools

Azure Cost Management

Cloud Adoption Reservations
Framework
Azure Advisor
Hybrid Benefit

Well Architected Azure Management Group

Framework Spot Instances
Azure Policy
Microsoft Cloud Adoption Framework
Business
Define strategy
Understand motivations
Financial considerations
Technical considerations
Create a business case
Plan
Digital estate
Initial organization alignment
Skills readiness plan
Cloud adoption plan
Platform Workload
Ready Adopt Manage
Azure readiness guide Migrate Business commitments
• First workload migration
First landing zone • Expanded scenarios Operations baseline
• Best practice validation
Expand the blueprint • Process improvements Ops maturity
Innovate
Best practice Validation
• Innovation guide
• Expanded scenarios
• Best practice validation
• Process improvements
Govern Well-Architected
Methodology Operational excellence
Performance efficiency
Benchmark
Reliability
Initial best practice Security
Governance maturity Cost optimization
Follow workload design best practices for cost
optimization with the Azure Well-Architected Framework

Get expert guidance on cost

optimal workload architecture and
design
• Cost modeling
• Cost monitoring
• Data management
• Optimal runtime methods
• Provisioning
• Trade-offs

Take the Azure Architecture

Review to self-assess

Learn more: aka.ms/well-architected/framework

Azure Reservations
Receive a discount on your Azure services by purchasing reservations. Giving us visibility into
your one-year or three-year resource needs in advance allows us to be more efficient. In return,
we pass these savings onto you as discounts of up to 72 percent.

Get more cloud Budget and Enjoy ease

for less cost
Reduce costs up to 72% compared to
pay-as-you-go pricing for select Azure
services. Lower your upfront cash
outflow with monthly payment
options at no additional cost.
forecast more effectively
Reserve resources upfront to help
plan for long-term success. Take
advantage of one-year or three-year
terms to support your budget goals.
and flexibility
Buy reservations in a few simple steps from the
Azure portal. Choose a payment option that’s
right for you. Exchange reservations as
your needs change. Cancel anytime and return
the remaining months of a reservation (for a fee).

Learn more about Azure Reservations: https://azure.microsoft.com/en-us/reservations/

Save big on Azure with the Azure Hybrid Benefit
By leveraging your existing on-premises licensing investment.
Bring your on-premises Windows Server and SQL Server licenses with active Software Assurance or Linux
subscriptions to Azure and helps to significantly reduce the costs of running your workloads in the cloud.

AWS is Save up to Save up to Save up to

5x 85% 55% 40%

more expensive than over standard pay-as-you-go over standard over standard
Azure for Windows rate leveraging your Windows pay-as-you-go rate for pay-as-you-go rate
Server and SQL Server Server and SQL Server licenses Azure SQL Database for Windows Server

aka.ms/hybridbenefit
Dev/Test Pricing
The only cloud with Developer Edition

Get competitive TCO and SQL Database

discounts for development and testing
Save up to 55% vs list price with active
Visual Studio subscription
No software charges on Virtual Machines

Access the fully-featured free

SQL Server Developer edition,
only pre-configured on Azure.

Learn more about Azure Dev/Test pricing: https://azure.microsoft.com/en-us/pricing/dev-test/

Get scalable compute capacity at deep discounts
with Azure Spot Virtual Machines (VMs)

Buy unused compute capacity at deep discounts

Pay up to the price you agree to in advance
Run interruptible workloads on VMs and VM
Scale Sets (VMSS)

Learn more about Azure Spot VMs: aka.ms/spotvms

Cost optimize your Azure resources with Azure Advisor

Get cost recommendations based

on your usage and configurations,
such as:
• Shut down unused VMs
• Right-size underused VMs
• Buy Reserved Instances for consistent
resources
• Delete idle network gateways

Remediate recommendations
easily with step-by-step guidance

Review your Advisor recommendations in the Azure portal: aka.ms/azureadvisor

Azure Cost Management and Billing

Cost Management in Azure Management

Groups
Always on by default, no setup needed
Action
Data hygiene for tags and policies Tags
Groups

Optimize through Azure Advisor

Notifications through action groups
Azure Cost
Management
RBAC and management groups ensures RBAC and Billing Advisor
better access controls
Manage AWS costs and usage in Azure
ARM Policy
Azure Policy
Active control and governance at scale for your Azure resources
Enforcement & compliance
Turn on built-in policies or
build custom ones for all
resource types
Real-time policy evaluation
and enforcement
Periodic & on-demand
compliance evaluation
VM In-Guest Policy (NEW)
Apply policies at scale
Apply policies to a Management
Group with control across your
entire organization
Apply multiple policies and &
aggregate policy states with
policy initiatives
Exclusion Scope
Remediate & automate
Remediate existing resources at
scale (NEW)
Automatic remediation resources
at deployment time
Trigger alerts when a resource is
out of compliance
Azure Management Groups
Efficiently apply governance controls and manage groups of Azure subscriptions

Simplify subscription Fit your organization Apply controls at scale

management
Group subscriptions into
logical groups
1 Mirror the hierarchy to the
Inherit properties that apply
to all subscriptions
View aggregated
information above the
subscription level
Create a flexible hierarchy that Leverage Azure Resource
can be updated quickly Manager (ARM) objects that
integrate with other Azure
services 3
organizational model that
works for you Azure services:
Azure Policy
Scale up or down depending RBAC
on the organizational needs Azure Cost Management
Azure Blueprints
Azure Security Center
Customer experiences
Customer:
H&R Block

Industry:
Professional Services “Our monthly spend year-over-year is nearly flat, while we now have approximately 30 percent more of our
Size: total compute in the cloud. Thanks to our partnership with Microsoft, our team has learned valuable
10,000+ employees
techniques and strategies to continue optimizing our spend.”
Country:
—Paul Clark, Director of Cloud, H&R Block
United States

Products and services:

Microsoft Azure
Microsoft Azure Advisor
Microsoft Azure Cost Management
and Billing
Microsoft Azure Well-Architected
Framework
Read full story here
Situation:
Situation:
As a leader in the modernization of
the tax industry, H&R Block wanted
to optimize its cloud infrastructure
and provide better service for its
customers.
Solution:
Solution:
By engaging with its Microsoft account
team and taking advantage of Azure
Well-Architected Framework concepts,
the company was able to optimize by re-
platforming to cloud-native services and
modernizing its operating models.
Impact:
Impact:
H&R Block is now equipped to take
control of its monthly spend while
also being able to move its total
compute to the cloud and use its
capabilities to benefit its business
and customers.
Financial Modeling – Tracking, rinse, & repeat

01
Initial modeling sets the initial the
key KPIs & Timelines along with
the Frameworks for measuring
 Migration & Consumption costs
validated against the current cash
flow to support the workloads
 
Timelines mapped to the fully
depreciated equipment along with
Colocation or Hosting Agreement
02 03
Migrating first several workloads
and/or percentage of overall
footprint is critical
Repeat the process, tracking
 Validating the projections and within specific intervals against
assumptions within smaller
increments of time
the projections and expected
KPIs
Make adjustments as needed
based on fluctuations beyond the
projections
 Cloud economics
azure.com/cloudeconomics

Cost optimization
azure.microsoft.com/en-us/overview/cost-optimization

Resources Microsoft Cloud Adoption Framework for Azure

azure.microsoft.com/en-us/cloud-adoption-framework

Microsoft Azure Well-Architected Framework

www.microsoft.com/azure/partners/well-architected

Connect to Azure Consumption Insights data in Power BI

Desktop
docs.microsoft.com/en-us/power-bi/connect-data/desktop-
connect-azure-consumption-insights
Q&A
Please submit your questions
into the Q&A window. We
have Subject Matter Experts
ready to answer your
questions.
 Thank you for joining us.

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