Managing Shared Costs
Everyone taking ownership of their cloud usage is a foundation Principle of FinOps. It's very easy to manage shared costs with CloudMonitor with the concept of Cost Groups which is a logical grouping of cloud resources that are used to allocate costs and track spending.
A Cost Group is a concept unique to CloudMonitor and can be created with the Admin App. By grouping resources based on business function, department, or other criteria, you can increase accountability and transparency within your organization.
Cost by X
Once you’ve created cost groups you can utilize the Cost by X feature of CloudMonitor to analyze your costs across the different Cost Groups you created, you can identify the Cost Groups where cost savings can be achieved and make data-driven decisions about your cloud spend.
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Managing Shared Cost Definition
A fundamental principle of FinOps is the idea that everyone takes responsibility for their cloud usage. Understanding the total cost of ownership is key and requires transparency and accuracy. Unfortunately, unallocated shared costs can hinder both of these. Without properly dividing the costs that are shared, engineers and product managers may not have a complete understanding of how much their products truly cost.
Cost sharing can involve full allocation, but it can also involve an informed ignore approach. In this approach, a business decision is explicitly made regarding whether shared platform services should come from a central budget or a portion of each cost center’s budget.
Nearly every organization has cloud costs that need to be segmented and allocated to business departments. These costs may include the cost of running networking services, support costs that benefit all engineering teams, or the cost of service resources from a cloud provider that does not yet support tagging or labeling.
As organizations increasingly adopt public cloud, it becomes more challenging to understand how to properly and fairly allocate costs, as well as to forecast and budget, without a strategy and processes in place to assign shared cloud resource costs to specific business owners.