How to unlock cloud potential with Managed Public Cloud and FinOps

The challenge  

According to research, only 42% of organisations’ cloud costs are where they should be, which can lead to serious issues across the entire business. Without sufficient visibility, tracking and analysis, it's difficult to understand where cloud costs are being incurred and what resources are underutilised. The knock-on effect means that deployment of applications and services are hindered, affecting a company’s ability to grow and bring new products to market. 

To address these challenges, many organisations implement internal charging models and leverage Shared Services Organisations (SSOs). By establishing a system where different business units or departments are charged for their actual cloud consumption, there is a greater awareness of cost and accountability, encouraging more efficient resource utilisation. 

Managed Public Cloud and FinOps: an important distinction 

The key reason for this difference lies in their distinct goals and approaches: Managed Public Cloud aims to simplify and streamline cloud operations, whereas FinOps services focus on optimising cloud spending and maximising the return on your cloud investment. 

Imagine you're running a restaurant. Managed Public Cloud is like hiring skilled kitchen staff to handle all the cooking, cleaning and maintenance, ensuring the kitchen runs smoothly and efficiently. FinOps is like having a financial analyst who meticulously tracks every expense, identifies areas of waste and helps optimise your menu and pricing to maximise profits. Both are essential for the success of your restaurant (or your cloud operations), but they address different aspects of the business. 

How do they work together? 

Managed Public Cloud Services focus on the day-to-day management and operation of your cloud infrastructure, ensuring high availability, performance and security. They also encompass provisioning and managing cloud resources (VMs, storage and networking), monitoring of your cloud environment and providing technical support and troubleshooting. A Managed Service Provider like Claranet will implement the necessary changes to the cloud infrastructure, such as right-sizing instances, optimising reserved instances and decommissioning unused resources. 

FinOps helps to identify cost-saving opportunities; by analysing cloud usage and identifying cost inefficiencies, you can implement cost-saving strategies and allocate cloud costs across different business units. You can also forecast future cloud spending, which in turn promotes best practices. When managed properly, Managed Cloud Services and FinOps work hand in hand to continuously monitor and optimise cloud spend, ensuring your business is always getting the most out of its cloud investment. 

Reservation management 

FinOps reservation management focuses on optimising the use of reserved instances to minimise costs. Regular reviews and adjustments ensure you leverage the best, most compatible pricing model. For example, if you buy a virtual machine on pay-as-you-go rates from Microsoft, you will be charged significantly more than if you commit to a 12-month contract with a discount.  

Cloud providers offer discounted pricing options; AWS, for instance, offers Reserved Instances, which provide a lower rate in exchange for committing to a specific usage volume over a set term. Leveraging these options can lead to substantial cost savings for steady and predictable workloads, such as web servers, databases, and enterprise applications, saving up to 69% over On-Demand rates.  

However, be mindful that you may not want to switch every virtual machine in one go to obtain the discount. Do you actually need every virtual machine for the next 12 months, or could you delay purchasing for three or six months? At Claranet, we guide customers on how to maximise their commitments to hyperscalers, like AWS and Microsoft Azure, to ensure they obtain the best discounts. 

Case study: How migrating to AWS helped Currencycloud achieve higher server and database performance 

Currencycloud was founded to create a new, faster way for businesses to handle overseas payments through the cloud. However, spending weeks to months spinning up new servers and data centres each time it won new clients meant the system soon became impractical. What it needed was an IT infrastructure that could grow at the same pace as the market’s appetite for Currencycloud’s services. 

Currencycloud migrated its IT infrastructure to the AWS Cloud and started scaling its business at the speed of its ambition. Claranet helped the company identify the pitfalls that could have caused the migration to falter, accelerating the process. This has resulted in a projected 30% cost reduction for year one. The server spin-up time is down from six weeks to six minutes, and server and database performance is even higher than expected overall. 

The new infrastructure is quicker, cheaper, more scalable, more secure and more compliant than we could ever have reached before.

Ed Addario, Chief Technology Officer

Spend monitoring

Monitoring your cloud spend is about more than cost optimisation; it should also ensure you have sufficient visibility of your expenditure. A 2022 Flexera report found that 32% of organisations do not fully utilise their cloud budget. With 31% of enterprises spending over $12 million on public cloud services every year - a huge amount of waste. The key is to identify who is spending what to get tangible visibility of expenditure; for example, is it a specific region or the global platform?  

Cloud cost auditing

Once you have assessed areas of usage and spend, identifying potential vulnerabilities, inefficiencies or areas for improvement, you can focus on cost optimisation. Cloud auditors can provide recommendations for improving security controls, optimising resource use, streamlining processes and implementing best practices. By addressing these areas, you can continuously improve your cloud operations, reduce operational risks and maximise your cloud ROI.

Claranet has a reputation for technical innovation and excellence. Founded in 1996, we have over 10,000 business customers and 3,000+ employees worldwide. We are proud to be positioned in Gartner’s Magic Quadrants every year since 2013 and placed in the Times International Track 200 for the last three years. Claranet is uniquely positioned in the cloud services market, able to deliver both Mode 1 (traditional, managed services) and Mode 2 (agile, cloud-native) operations across all major cloud providers (Microsoft Azure and AWS (Amazon Web Services)). This dual capability, combined with our deep expertise and broad service portfolio, sets us apart from many competitors.

Case study: Spendology exchanges a private solution for AWS and Claranet  

Spendology is a currency exchange fintech which aims to revolutionise the buying and organising of travel money. The company had ambitious growth plans, aiming to onboard 20,000 new members in the first year and exchange over £35 million through approximately 35,000 transactions. In the second year, the company plans to add a further 40,000 members, exchanging over £300 million through 250,000 transactions.

Claranet took the time to fully understand the company’s requirements, using our extensive application proficiency to devise the solution and migrate to AWS. As an AWS Premier Consulting Partner, Claranet enabled the Spendology servers to cope with an increase in demand much more dynamically than before. Furthermore, after paying for the initial set-up of the Claranet solution, the ongoing running costs were far lower than expected.

Good financial management is key  

Cost optimisation is important but it's a byproduct of good financial management. In essence, Managed Public Cloud manages your cloud operations, while FinOps manages your cloud costs effectively. It’s crucial that these two elements work hand in hand for successful cloud deployment. Claranet’s FinOps service offers the strategic guidance and analysis needed to optimise cloud spending, with our operational expertise in Managed Cloud Services helping to implement the necessary changes.  

Find out more - download our eBook today:

The cost of cloud - How cloud reduces your expenditure, while optimising the value delivered AND meeting your sustainability obligations