Navigating Cloud Costs: Insights from Girish Chandangoudar on Evolving Pricing Models and FinOps Strategies

In today’s rapidly evolving cloud landscape, managing costs effectively has become a critical challenge for organizations of all sizes. To shed light on this topic, Girish Chandangoudar, Vice President & Practice Head – Infrastructure Management Services at Happiest Minds Technologies in an exclusive chat with Amit Singh shares his expertise on the evolution of cloud pricing models, the core principles of FinOps, and best practices for cloud cost management. He also discusses the impact of FinOps on organizational culture and provides valuable success stories that highlight significant cost savings and operational efficiencies. Join us as we explore the complexities of cloud cost management and discover how FinOps is shaping the future of cloud computing

 How do you see the dynamic pricing models of cloud services evolving over the last few years?

Girish Chandangoudar: We saw the evolution of pricing models early on from on-demand with higher unit costs to more economical reserved instance pricing models which required customers to agree on longer-term commitments. Today, we see:

1. Tiered and Layered Pricing Models: The cloud service providers now offer tiered pricing models where the unit cost decreases as usage increases. This incentivizes customers to scale their usage with the same provider. Additionally, layered pricing models are emerging, where different layers of services (e.g., basic, advanced, premium) come with different pricing structures.
2. Usage-Based Pricing: Providers are increasingly focusing on usage-based pricing, where costs are tied directly to the resources consumed.

 What are the specific challenges organizations face while managing cloud costs? How does FinOps help as the emerging solution for managing cloud costs?

Girish: Most of the medium to large-sized organizations are facing challenges in managing the capacity of resources consumed on the cloud, benchmarking performance, forecasting, correlating the resources consumed with user groups or departments or business units, and finally a holistic governance model that brings cross-functional teams together for effective cost management.

What are the core principles of FinOps that you believe are most critical for effective cloud cost management?

Girish: The core principle involves close collaboration between cross-functional teams such as Engineering, Development, IT Operations, Security, and Finance teams. This cross-functional approach ensures that all stakeholders have a shared understanding and responsibility for managing the cloud costs. The goal of this cross-functional team is to establish the governance model with metrics and KPIs.

 How has implementing FinOps changed the way finance, technology, and business teams collaborate?

Girish: An effective FinOps implementation results in a cultural change in an organization that brings together cross-functional teams being aware of current cloud spend by establishing visibility into the resources consumed and their associated costs, then setting up a model for optimizing and managing costs tailored to the needs of the organization through a cloud governance mechanism. As mentioned earlier, FinOps instills a shared responsibility among the cross-functional teams through this cultural change.

How is your organization assisting clients to implement FinOps in their organizations? What specific services or expertise have you built to add value to your clients’ cloud cost management efforts?

Girish: Happiest Minds has developed FinOps offerings to address two distinct requirements:

1. Consulting Services: A one-time discovery, assessment and remediation service.
2. Managed Services: FinOps is bundled with our core Cloud Managed Services to provide continuous cloud cost optimization and management.

We have certified Cloud Architects and Subject Matter Experts trained in FinOps to provide these services along with partnerships with leading hyper-scalers and third-party FinOps tool vendors.

  Can you share any success stories where your FinOps services led to significant cost savings or operational efficiency?

Girish: We have seen optimizations in various ranges starting from approximately 10% in reasonably well-managed environments to more than 30% in poorly governed cloud environments.

Here are a few examples:

• We helped reduce cloud spend by approximately 20% through our managed services for a leading specialty grocery chain in North America.
• We were able to demonstrate potential savings of approximately 35% for a leading automotive fleet management solutions provider with a presence in the Americas and Europe through our consulting services.
• We helped optimize cloud spend by 15% for a global professional services provider operating across 85+ countries with a multi-cloud footprint.

How do you see the role of FinOps evolving in the next 3-5 years? How do you see the adoption of FinOps principles impacting the broader cloud computing landscape in the coming years?

Girish: The current macroeconomic situation will continue to put pressure on IT budgets necessitating the need to adopt FinOps as an integral part of the larger Cloud Operating Model within the enterprises. We also expect standardization efforts such as FOCUS (a technical specification that normalizes cost and usage billing data across cloud vendors) where unified specification for billing data across multiple clouds will help reduce complexity for enterprises that are on a hybrid cloud journey.