How FinOps Best Practices Can Lead to GreenOps

In the digital transformation era, cloud computing has become the backbone of modern enterprises, enabling scalability, agility, and innovation. However, with the rapid adoption of cloud services comes a new set of challenges like rising costs and increasing environmental impacts. As cloud computing usage grows, so does the need for balancing financial efficiency and sustainability.

Interestingly, calculated FinOps practices can pave the way for GreenOps, leading to both cost savings and a smaller carbon footprint. This blog majorly focuses on correlating the connection between how best Finops practices can create an impact on sustainability management of cloud.

The Cloud’s Growing Footprint: Why FinOps and GreenOps Matter

The global cloud computing market is projected to reach $1 trillion by 2030, growing at a 17.9% CAGR from 2023 to 2030. With this exponential growth, the environmental impact of cloud data centers is becoming a major concern. A previous study by Nature found that data centers account for 1% of global electricity demand, contributing significantly to carbon emissions. To counter this, companies are adopting sustainable cloud practices, with some cloud giants committing to 100% renewable energy usage in the coming years.

However, sustainability doesn’t just mean switching to greener energy. It involves a complete shift in how cloud resources are managed. This is where FinOps and GreenOps come into play. By applying calculated FinOps practices, organizations can achieve both cost optimization and environmental sustainability.

What is FinOps?

FinOps is a framework for cloud financial management that enables organizations to manage and optimize their cloud spendings. It brings together cross-functional teams, comprised of finance, IT, and Cloud operations, to ensure that the cloud investments resonate with business objectives by injecting cost visibility, optimization, and governance.

What is GreenOps?

GreenOps is actually the practice of managing the environmental impact of IT infrastructure, especially of cloud operations. GreenOps is mainly about reducing carbon emissions through aspects such as improving energy efficiency, ways of utilizing renewable energy sources, and optimizing resource usage.

Synergy Between FinOps And GreenOps – A Trend Of Future

Through the proper implementation of FinOps practices, firms can optimize their cloud spending and minimize their carbon footprint. Here is how:

1. Resource Efficiency Optimization

One of the key FinOps practices is right-sizing cloud resources, which involves matching cloud resources to actual usage. Right-sizing prevents over-provisioning, reducing unnecessary costs and energy consumption.

FinOps Action: Elimination of unnecessary or underutilized capacity reduces unnecessary cloud costs.

GreenOps Outcome: By utilizing fewer resources, energy consumption decreases, thereby minimizing the carbon footprint associated with cloud operations.

According to a study by the Uptime Institute, data centers waste nearly 30% of the energy consumed due to over-provisioning and poor resource utilization. By addressing idle resources, FinOps can develop a leading role in promoting energy conservation.

2. Implementing Cloud Cost Visibility and Governance

FinOps does a great job of emphasizing cost transparency, allowing businesses to monitor cloud usage in real-time. This visibility can be extended to track the energy consumption of cloud services, enabling businesses to make more sustainable decisions.

FinOps Action: Implementing cloud cost visibility tools and usage monitoring.

GreenOps Outcome: Awareness of carbon-intensive resources, prompting actions to reduce environmental impact.

A report from IDC revealed that about 80 percent of organizations view sustainability as an integral part of their cloud governance strategies. Weaving sustainability metrics into cost governance, FinOps closely aligns with the goals of GreenOps.

3. Shifting Workloads to Energy-Efficient Cloud Regions

Cloud providers such as AWS, Microsoft Azure, and Google Cloud offer regions powered by renewable energy. FinOps encourages teams to choose the lowest-cost regions for running workloads. Organizations can potentially reduce their environmental impact by selecting regions that operate on green energy.

FinOps Action: Geographically shifting workloads to cost-effective cloud regions.
GreenOps Outcome: Reduced carbon footprint by running workloads in regions with greener energy sources.

For instance, Google Cloud aims to run entirely on carbon-free energy by 2030, and AWS has committed to being powered by 100% renewable energy by 2025. By shifting workloads to these regions, FinOps practices contribute directly to sustainability.

4. Auto-Scaling and Automation for Optimal Resource Utilization

The best practice of FinOps encourages the use of auto-scaling and automation regarding cloud resources in accordance with real-time demand to ensure no waste of resources, thereby directly lowering costs and energy usage.

FinOps Action: Implementing auto-scaling and scheduling for non-peak operations.
GreenOps Outcome: Reduced energy consumption during off-peak hours, contributing to sustainability goal

According to RightScale’s 2023 State of the Cloud Report, a staggering 51% of cloud spend is wasted due to inefficient resource usage. Organizations can cut costs and energy usage by automating scaling.

5. Efficient Cost Management

A key aspect of FinOps is optimizing storage costs, which includes archiving cold data and deleting redundant data. Efficient data management not only reduces costs but also reduces the energy required to store and manage this data, contributing to a greener cloud footprint.

FinOps Action: Data lifecycle management and archival strategies.

GreenOps Outcome: Lower energy demand for storage, contributing to sustainability.

A study by the International Energy Agency (IEA) found that data centers can cut energy consumption by 15-20% simply by optimizing data management. These savings, driven by FinOps, contribute significantly to GreenOps.

Conclusion: FinOps Paving the Way for GreenOps

FinOps practices, when implemented thoughtfully, can become the foundation for achieving GreenOps. By optimizing cloud resource usage, reducing waste, and leveraging renewable energy, companies can balance financial efficiency with environmental responsibility. In today’s climate-conscious world, this synergy between cost optimization and sustainability isn’t just a competitive advantage, it’s a necessity

References

1. Grand View Research. (2023). Cloud Computing Market Size & Trends Analysis Report. Available at: https://www.grandviewresearch.com/industry-analysis/cloud-computing-market

2. Nature. (2020). Data centers and energy consumption: Industry perspectives. Available at: https://www.nature.com/articles/s41586-020-3030-5

3. Uptime Institute. (2021). Data Center Energy Efficiency and Sustainability. Available at: https://uptimeinstitute.com/resources

4. IDC. (2023). Sustainability in Cloud Governance: A Growing Priority. Available at: https://www.idc.com

5. Google Cloud. (2020). Sustainability at Google Cloud: Moving to Carbon-Free Energy. Available at: https://cloud.google.com/sustainability

6. RightScale. (2023). State of the Cloud Report. Available at: https://www.flexera.com/products/cloud-management

7. International Energy Agency (IEA). (2022). Data Centers and Energy Efficiency. Available at: https://www.iea.org/reports/data-centers