Cloud Cost Intelligence: Enabling Profitable Innovation

Cloud cost can make or break your most important financial metrics. And for many, it's out of control.

The move to the cloud was for speed and scalability.It was to give developers the autonomy to choose and immediately deploy the services they need to deliver functionality with high frequency and minimal lead time for change. This also introduced instability for a business’ most crucial financial metric: your margins. 

Every engineering decision has a cost consequence.

A single release can trigger a dramatic change to spend. Patterns of minor decisions, like choosing the wrong instance size, can add up to large scale tech debt.

Every cost has an impact on your cost of goods sold (COGS) — which can affect everything from your pricing model to your valuation at the next fundraising round.

The irony? While high-performing DevOps teams obsessively focus on metrics to capture the effectiveness of their development and delivery process, they lack meaningful metrics or automation to understand and control cost. The monthly AWS bill only shows you how much you’ve spent per AWS service — which is completely irrelevant to how you’ve organized your products and dev teams.

Leading to tech debt and disruption.

When enough expensive tech debt builds up, engineering’s only choice is to pull developers off valuable feature development to respond to executive mandates to improve margins.

Even if you're minimizing it everywhere else.

Your high-performing team would make Gene Kim proud. Yet, despite maniacal focus on adopting high-performer practices, a top contributor to your bottom line, cost, is not part of the picture. You need meaningful metrics that help you make better decisions about everything from how to architect your application to how you package your freemium tier.

Decentralize cost ownership and intelligence.

Build a cost-literate culture.

Like security or quality, cost optimization should not be siloed or belong to a single function. Cost needs to become everyone’s responsibility. In order to do this, all teams need to be equipped with the cloud cost intelligence and training to make better decisions about cost.

Align cost with the business.

Make better decisions and communicate more effectively.

Cost should not be viewed as simply “total cloud spend” or “EC2 instances.” For engineers, costs need to be aligned with product features and development teams, so they have the visibility they need to take ownership of their costs. Business stakeholders, like finance and product teams, should have a deep understanding of key unit economics and cost of goods sold (COGS). This reporting needs to be owned by the engineering function.

Shift cost optimization left.

Proactively optimize costs during development

When cost is an afterthought, it turns into expensive technical debt. Engineering leadership should first understand the go-to-market strategy for the products they build. Then cost requirements should be discussed to ensure that the product fits within the strategy. During planning and development, developers should consider and discuss cost, just as they would any other non-functional requirements, such as speed or availability.

Predict and address cost failures and bugs.

Make cost a first-class metric in monitoring.

DevOps teams should apply the same principles of any good observability strategy to cost. To prevent disruptive cost issues, teams should monitor for early signs of change, so they can catch issues before they become a significant cost problem. Additionally, debugging context needs to be readily available to reduce mean time to respond (MTTR). This ongoing monitoring and continuous improvement will give DevOps teams a deep understanding and command of costs.