Three Tagging Tips your Cloud Infrastructure Needs to Optimize Costs

The economic uncertainty of 2020 has caused contractions in businesses across the world—leading to cost-cutting and reduced budgets.

One place where teams might find these savings are in the IT budget. Some cloud cost efficiency is never a bad thing, so as long as it doesn’t hinder core services. To know which cloud services belong to which projects, a thorough and detailed tagging structure is required.

If it has been a while since your teams have tagged your cloud infrastructure, or if your team’s tagging policies are inconsistent, now is the time to shore them up. Tagging provides visibility into cloud spend and enables cost optimization.

Here are three tips to improve cloud infrastructure tagging while building healthy FinOps best practices.

#1 Go back and tag every cloud service

This sounds obvious, but it’s tougher to do than most teams think. It can be easy to spin up instances, storage, databases, and other popular services and get to work. Left untagged, these services generate cost and utilization data that operations and finance teams must reconcile later.

Thorough tagging and a proven cloud cost management platform help make this task easier, but if parts of the infrastructure aren’t tagged, there will be plenty of budget questions to answer at the end of the month.

Some engineers even consider untagged resources as a form of technical debt. The longer teams put off tagging or re-tagging services to improve allocation accuracy, the more inaccurate budgeting and forecasting becomes. Avoid this opportunity cost by tagging resources that have them missing, misspelled, or even tagged in multiple languages.

Hunt down untagged services

Using a cloud cost management platform, start with building a report of cloud costs and utilization that are not tagged. This still happens in growing infrastructures at companies that have fledgling FinOps practices that focus more on acquisition and growth than digital transformation and change management.

A cloud cost management platform should be able to surface reports of cloud services that are untagged. Have your technology teams take these reports and immediately (and preferably programmatically) tag these to the services in which they belong. This could be a team, product, project, or department—anything to improve cost allocation and accuracy.

Use updated tagging to rebuild dashboards

Depending on where a person is in the company org chart, their perception of business metrics and goals might be different. Use a data analytics and visualization tool or cloud cost management platform to build specific dashboards and reports that help inform specific roles within the company.

Once you have these reports and visibility to inform your teams, discuss ways to lower cloud costs, and improve infrastructure efficiency.

#2 Programmatically tag new services

Millions of lines of spreadsheet data alone can’t tell a strong cloud cost story. Engineering teams must tag cloud resources to help classify cloud costs by services, projects, teams, and other details.

The more a team can tag resources, the better and more accurate cloud cost allocations will be. Dashboards and reports will be clearer, and accountability discussions less contentious.

Tagging work can be a challenge.  FinOps experts typically recommend three ways to help improve cloud service tagging:

  • Create a policy around tagging new resources: Any new service MUST be tagged
  • No manual tagging of services: Instead, use automation software, like Terraform, Puppet, or Chef to tag newly-created cloud resources
  • Use a management platform to ingest and report on these tags: Manual human work often takes too long or contains too many errors.

Tagging is just one part of many cloud cost management tactics that build a robust FinOps practice. Tagging is part of a bigger cloud cost-efficiency strategy.  With these processes in place, it’s much easier to adapt to and navigate market uncertainty.

#3 Use tags to proactively cut waste

Other than creating common ground to discuss cloud cost savings and efficiency, properly tagged infrastructures can build on other cutting-edge solutions. For instance, this foundational tagging can set up proactive solutions like the ability to detect anomalies in cloud cost utilization and spending.

A thoroughly-tagged infrastructure means every bit of resource, and its cost has some type of connection back to a team or project that owns it. Whenever cost or usage data is ingested in a cloud cost management solution, whether via API or monthly, it can immediately be attributed to the team that owns the utilization or cost.

While some businesses can invest internal resources to create their data-driven anomaly detection, many might find it easier to use an existing, proven solution. Cloudability provides this level of anomaly detection within its multi-cloud cost management platform. Always monitoring, and always ready to inform viewers and budget owners when a spike or dip occurs. The sooner teams are alerted to anomalies, the sooner they can act.

Tagging tells the cost story

Before any discussions of altering cloud services begin, make sure every technologist, finance professional, and business leader is looking at the same cloud cost data. Cost data is complicated enough—billed by the second and often delivered monthly in the form of millions of rows of spreadsheet data for large companies.

Building this trust in the cost data through tagging hygiene is not an easy task within larger complex cloud structures. Every day, different resources are utilized by multiple teams within your organization, adding new cloud cost data points to consider. Finding efficiency is more of a process—iterative over time and allowing larger optimization decisions as time passes.

Ensure that your technology and finance teams have a cloud cost management platform or tool in place to assist in making sense of this data. These kinds of services, like Apptio Cloudability, help ingest all this data, process it within an analytics engine, and produce easy-to-read dashboards and reports. This creates a common language for all technologists, finance personnel, or business leaders to help make sense of cloud costs.

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