Being a “good” developer, engineer, architect, product manager that just builds great products isn’t enough any more.
There was a time where technical experts in companies would be left alone. As long as their products worked, kept working and stayed within budget, few questions were asked.
The cloud has unlocked incredible opportunities for engineers, but also opened the door to a new line of scrutiny and questioning. Instead of “Can we build it?” engineers and product leaders must answer questions like:
“Should we build it?”
“Is this the most cost efficient way to build it?”
“Why did we build it this way in the first place?”
“What other ways could we build it?”
“What if we built it someplace else?”
“What will happen when we build it and add more users/customers/logins/data than we have today?”
This leaves many engineering leaders wondering, “Can’t I just do my job?”
Welcome to the new era of engineering – this is your job.
On the surface, these new questions seem like more work. However, these questions give engineering leaders the opportunity to own the cloud cost narrative and draw a direct line between their work and the bottom line of the business.
Being a good steward of the cloud spend
Typical interactions between finance and engineering are reactions to unexpected costs and are therefore contentious and defensive.
“My number one goal when working with my CFO is to have no surprises,” says a VP of Engineering from a SaaS company with a cloud spend of almost 20% of their P&L.
This is important because surprises and uncertainty with your finance leaders result in the need to quickly reestablish balance – questions, meetings, and in the worst cases, cuts.
Many engineers will push back at this point with, “Finance just doesn’t understand.” And they are most likely right.
Truthfully, finance does not want to understand microservices or containers or any technical decision that you make. They want to be confident that you are thinking about the financial impact of these details and decisions before they have to ask about why costs are going up. (See Manage Your Cloud Like an Operator)
In other words, they want to know that you are being a good steward of the business.
When you do, the cloud cost narrative becomes yours to own and explain its impact instead of a story where you appear to play the villain.
How engineers can become the hero of the cloud cost story
Think about how you measure the success of your cloud projects, products, or program today.
Controlling the cloud cost narrative begins with talking about the impact of your cloud spending in business outcomes. This applies not only to explaining past spending, but also to future planning.
For example, spending money on VM instance-hours for development purposes may be viewed as wasteful. The business necessity may not be clear If the justification is something akin to “we need to develop and deploy quickly” or perhaps something more technically relevant like “we have separate deployment pipelines for each team, each of which needs its own VM.”
Conversely, framed as a reduction in total cost to the business – “we’re increasing engineering efficiency and lowering time to market by building on these VM’s in separate pipelines,” the same spending may be viewed as cost avoidance and in alignment with the company’s revenue goals.
Once the outcomes that matter are understood, then engineers must take action and accountability.
Most frequently this happens when you remove barriers between finance and engineering by:
- Actively participating in cost allocation discussions
- Leading usage and cost data analysis and normalization
- Identifying and reconciling anomalies and areas of underutilization
- Monitoring, reporting and improving resource utilization, workload efficiency
These actions will dissolve barriers between finance and engineering because asking questions with a cost mindset creates a common language to get in the same room and solve the same problems.
Take a company that is thinking of spinning up a new instance or sizing up their current instance. Typically engineers are asking whether the instance gives them the capability to match usage today and in the near future. Bringing a cost lens to this same situation expands the considerations. What is the cost and discount difference of moving a half or full step up? What is the likelihood that we will need to upgrade this instance in the next 6, 12, 18 months and what would be the associated cost?
In looking at usage and cost side-by-side, you position yourself as an ally to your finance counterpart. You become a driver in conversations that your finance leaders are having about budget, total cost of ownership, and forecasted spend. You have reduced the risk of this purchase because you have answered the what-if questions that finance loves to ask. Additionally, you have positioned yourself to build in both the most technically efficient and cost efficient way.
Some words of caution. These practices are important regardless of whether you have identified the best metric to explain their impact. The metrics might evolve with new data and learning, but as they do, you will be positioned to tell the engineering impact story because you are approaching action with a cost mindset.
Efficiency is now part of the job
There is no question that owning the cloud cost narrative is work. It is work, though, that is no longer optional. Companies are adopting Cloud FinOps practices to be more strategic and efficient in investing in the cloud in ways that drive measurable business value. (See From Cost Optimization to FinOps – 4 Changes to Look Forward To). As a result, cloud cost efficiency is not a finance problem or an engineering problem; it’s a business operations problem.
If engineering and product teams don’t want to feel like they are “victims” to these new ideas, they need to embrace the opportunity to be the champion of their cloud cost narrative and its role in building a great business.