How network FinOps can control connectivity and cloud costs

Why networking costs are harder to control

Today, network hardware, refresh cycles and maintenance represent only a fraction of networking costs. Additional expenses include WAN, SD-WAN and carrier connectivity; internet connectivity and bandwidth commitments; and data center interconnects and cloud connectivity.

Consumption-driven costs differ from fixed infrastructure costs, and most organizations incur both.

Cloud management and consumption-based costs make data movement a financial architecture decision, rather than an IT choice. Cloud providers charge data egress and outbound transfer fees that often differ between inter-region and cross-zone traffic. Hybrid and multi-cloud environments can drive significant data movement that raises costs.

Security and resilience add another layer of necessary but sometimes opaque costs. Services such as firewalls, DDoS protection, encryption, redundancy, disaster recovery and compliance-specific architecture lead to unanticipated costs.

Don't mistake these costs for waste; the concern is whether the organization understands what level of cost is justified by the associated risk reduction or business value. That's where FinOps principles come in.

Apply FinOps principles to network spending

FinOps principles offer visibility, optimization and cost control for networking services. They provide a mechanism for connecting finance with network and infrastructure technologies as well as application and engineering teams.

Start with visibility and allocation

Ask questions about consumed network resources, the teams driving that consumption, shared expenses, traffic movement and fixed versus usage-dependent costs.

The FinOps Foundation identifies data ingestion, allocation, reporting and analytics as core capabilities for understanding technology usage and cost. Gather this information using provider billing data, network telemetry, flow data, application and workload metrics, and contract information.

Each data set is important: A network bill tells finance what was purchased; network telemetry explains how the organization consumed it.

Make traffic and connectivity costs available to owners

Develop a cost-aware mentality by providing actionable accountability data so that owners can see the costs associated with different decisions.

• Determine whether to use showback or chargeback.
• Consider how to allocate shared network services.
• Associate traffic with specific applications, products or workflows.
• Identify high-cost traffic patterns.
• Assign ownership for optimization decisions.

Use caution: Overly granular reporting creates unnecessary administrative overhead.

Optimize routing and network architectures

Optimize network capabilities based on collected data. However, a cheaper traffic path is not automatically a better architecture. Optimization must consider latency, availability, security and application requirements.

Data-driven optimization opportunities include:

• Reducing unnecessary inter-region and inter-zone traffic.
• Placing workloads and data closer together where appropriate.
• Evaluating routing paths.
• Reviewing load-balancing architecture.
• Reducing unnecessary inspection or transit hops.
• Considering caching and content delivery network strategies.
• Consolidating or right-sizing connectivity where usage supports it.

Keep network traffic and data storage compliant with data sovereignty and residency obligations.

Treat cloud egress as an architecture and planning variable

Cloud network pricing can make architecture decisions and financial decisions inseparable. Teams can monitor egress trends and identify applications producing disproportionate outbound traffic, enabling decision-makers to model egress costs before architecture changes. They can also compare deployment and regional options.

Bring hybrid and on-premises networking into the same financial view

Technical network engineering teams rarely view on-premises and cloud networking as individual components. Hybrid infrastructures and integrated cloud services blur those distinctions. Network-driven FinOps doesn't stop at public cloud cost management. Instead, it includes WAN and LAN connectivity; data center network capacity; SD-WAN capabilities; on-premises network equipment; and shared network and security infrastructure.

Establish a common view of total connectivity costs rather than optimizing each environment independently.

Make network cost control an ongoing management practice

Move from individual cost reductions to a more financially efficient operating model.

Begin with standardized metrics that provide actionable information:

• Network spend versus budget and forecast.
• Cost per application, product, workload or business unit.
• Egress and data transfer spend.
• Percentage of network costs allocated to owners.
• Major cost anomalies.
• Use of purchased connectivity capacity.

Next, define executive versus engineering responsibilities to reduce gaps.

Executives should decide acceptable cost versus performance trade-offs, ownership and accountability, investment priorities and risk tolerance.

Technical teams should execute telemetry and allocation, architecture changes, routing optimization, capacity and right-sizing actions, and ongoing anomaly investigation.

Optimize connectivity for business value

Network costs are increasingly influenced by workload placement, traffic patterns and consumption rather than by network hardware investments. Network FinOps connects network telemetry, financial allocation and architecture decisions.

Start now by mapping network spend to business owners and major traffic drivers. Then use that baseline to apply FinOps principles to the architectural or commercial decisions that deliver the greatest financial impact with the best business outcomes.

Damon Garn owns Cogspinner Coaction and provides freelance IT writing and editing services. He has written multiple CompTIA study guides, including the Linux+, Cloud Essentials+ and Server+ guides, and contributes extensively to TechTarget Editorial, The New Stack and CompTIA Blogs.