There are usually two types of customers we come across in Google Cloud:
First, those who use it as their primary cloud. These are generally ecommerce companies, data platforms, or startups with a strong grasp of FinOps fundamentals. Google Cloud is likely their largest cost driver for cloud spend, so they recognize the importance of cost optimization.
Next, there are customers who use Google Cloud — but only as a supplementary cloud. For example, they might leverage Google for its unique data warehousing tools or for its ML/AI capabilities. Some companies even use Google Cloud simply to maintain a footprint in diverse clouds so they can increase negotiating leverage.
These customers typically don’t utilize budgets, labels, alerts, committed use discounts (CUDs), etc to their fullest extent. They lack deep organizational knowledge of Google Cloud and FinOps best practices.
While these two groups have vastly different reasons for leveraging Google Cloud, neither is more “right” than the other. In fact, both have room to improve how they generate ROI through FinOps in Google Cloud.
Below, we’ll cover common challenges and mistakes of adopting FinOps for Google Cloud and then outline strategies to maximize your ROI on Google Cloud. These are based on the experiences that our team of FinOps subject matter experts comes across every day.
Challenges That Organizations Face When Adopting FinOps for Google Cloud
There are many reasons why your FinOps team might be missing out on Google Cloud ROI, but here are the primary ones:
Lack of organizational knowledge
Google Cloud occupies 11% of the global market share for cloud services, coming in third place behind Azure (24%) and AWS (31%). While growing year over year, its relatively smaller market share implies less vendor support, less public documentation on discount instruments, and fewer specialists who understand the ins and outs of FinOps for Google Cloud. Even for skilled practitioners with years of experience working in FinOps, there may still be a learning curve. Oftentimes it takes real-world experience or a team of Google Cloud experts to maximize your FinOps strategy.
For example, were you aware of the following?
- Only about half of the machine series available in Google Cloud are currently eligible for Flex CUDs.
- Most enterprise or private pricing agreements directly with Google will negate a customer’s eligibility for sustained-use discounts.
- Only resource-based CUDs can cover GPU / SSD usage.
- There is no mechanism to exchange commitments in Google Cloud, unlike AWS or Azure.
Without enough dedicated specialists who understand these nuances, teams are left with large knowledge gaps, ultimately causing them to overlook many savings opportunities.
Nuances of how savings are applied
There are some additional differences that set Google Cloud apart from other cloud providers — such as its approach to “stacking” discount instruments and how they’re applied downstream of on-demand costs.
It takes a comprehensive analysis of your usage to determine the true unit economics of running workloads in Google. You need to consider factors such as private billing rates, credit attribution, and chargeback / showback.
It’s also important to consider billing rules unique to Google Cloud, such as custom machine series having 5% higher rates compared to their predefined equivalents. Pricing may also depend on region. For example, it’s usually much cheaper to run a machine in the central U.S. than in the Asia-Pacific region.
Time and resources needed to understand Google Cloud
Due to the complexity of Google Cloud’s nuances, it takes customers time to understand the ins and outs of the platform. This is true even for skilled FinOps practitioners with years of industry experience!
Of course, you can get more familiar with Google Cloud by reading its detailed documentation. However, it’s likely that your focus pertains more closely to tasks that generate direct value for your customer base. Without a dedicated person or team assigned to take the time and resources needed to fully understand Google Cloud, your organization could miss out on opportunities to save.
Delayed FinOps Adoption
There’s a saying in the FinOps community: “The best time to start FinOps was yesterday,” implying that the sooner an organization starts with FinOps, the better. Yet, many organizations, even large corporations, are still hesitant to embrace cloud cost optimization, often seeing it as just another task. This is especially true for Google Cloud users, where a lack of awareness and expertise has led many to overlook the importance of cost management.
The reality is that FinOps isn’t optional anymore — it’s a necessity. Take the visibility stage of FinOps, for example. You need to monitor and allocate costs accurately, using tags or labels to assign project owners and other metadata.
However, these tags can’t be applied retroactively; they only start collecting data from the day you set them up. If you initiate labels and billing exports today, you’ll only have data from today onward — a sample size too small for meaningful analysis.
So, in hindsight, the best time to start FinOps might not have been yesterday but six months ago. Without enough historical data, predicting and managing your costs becomes challenging. The sooner you realize this and start, the better positioned you’ll be to manage your cloud costs effectively.
Common Mistakes Organizations Make in Google Cloud
Despite its challenges, Google Cloud clearly remains a popular choice for cloud services (and its YoY market share increase speaks for itself!). Many Google Cloud customers, however, encounter the same mistakes that unnecessarily cost them time, resources, and money.
Being too reactive when implementing FinOps
Aside from starting too late, one of the biggest mistakes organizations make with FinOps is reacting instead of acting. In other words, most teams only decide to implement a FinOps strategy once they’ve already encountered a problem — and suffered the consequences.
Suppose a service account key gets leaked and thousands of dollars of compute resources are spent in less than an hour. Most organizations are slow to react and only take FinOps seriously after facing significant financial loss.
Other organizations may not see such sudden cost increases. It’s not uncommon for spend to keep slowly creeping up and to the right, due to a lack of proactive management to identify waste. Eventually, organizations reach a point where they realize interest rates have increased, borrowing has become harder, and they suddenly need to try to cut costs — fast.
But playing catch-up is harder than getting it right the first time. To avoid these problems, organizations need to implement FinOps practices proactively.
Having a decentralized approach
Another fatal flaw is taking a decentralized approach. It is common for organizations to dedicate only a handful of FinOps practitioners to Google Cloud while entire teams may be focused on AWS or Azure.
Unfortunately this happens more often than not, with Google Cloud relegated to its own corner, cut off from larger FinOps discussions. The result is knowledge gaps, siloed information, and a lack of collaboration: the antithesis of good FinOps practices.
A performance vs. cost-management focus
Naturally, your team’s primary focus is on tasks that generate value for your customer base. It makes sense that internal cost optimization doesn’t immediately make the top of the priority list. In many cases, teams just don’t see Google Cloud cost optimization as a significantly cash-flow-positive initiative.
But this is an oversight.
In Google Cloud, more than half of the businesses ProsperOps interacts with do not have any committed use discounts. Today, businesses estimate their cloud spend waste at 27% — similar to the 28% estimated in 2023. When every dollar counts, throwing away over a quarter of spending on wasted resources seems unbelievable. If you want to eliminate waste and reduce unnecessary cloud spend with buy-in from management, you must widen your performance focus to also consider (and prioritize) cost management.
How FinOps Teams can Maximize ROI on Google Cloud
If these challenges make you doubt the efficacy of Google Cloud, hold that thought. With the right tools, there are many opportunities for FinOps teams to maximize ROI on Google Cloud. Here’s how:
Embrace collaboration and centralized teams
Two FinOps principles are commonly forgotten but have the power to make a big impact on your bottom line: collaboration and centralization.
Collaboration is crucial for Google Cloud due to the platform’s highly nuanced nature. Teams must maintain open communication and engage in joint problem-solving and decision-making to develop a cohesive, organization-wide understanding of the problem. This is especially important when discount instruments in Google Cloud may offer less vertical scaling flexibility than those available in AWS or Azure.
However, some FinOps teams still push Google Cloud into its own silo, where only a handful of employees have full insight into the platform. This isn’t ideal, as the best results come from collaborative decision-making where everyone has the same context.
The second important principle is centralization.
Again, it’s important that FinOps teams aren’t siloed. Instead of managing separate (and disproportionately sized teams) for AWS, Azure, and Google Cloud, organizations should create one central, multi-cloud team. This will streamline communications, facilitate knowledge-sharing, and lead to more effective decision-making for cost management and optimization. However, building such a centralized team requires significant technical enablement and investment in the right resources.
Taking action on recommendations
We understand that busy Engineering and Finance teams may have better things to do than spend time learning about CUDs. That’s why so many teams value Google’s ability to generate recommendations that tell you which resources to shut off when not in use.
Lack of recommendations isn’t the problem. Instead, what’s holding teams back is a hesitancy to follow through and implement these recommendations.
This is why automating discount management is the best route for FinOps teams working in Google Cloud. With automation, your team can be sure that Google cloud cost management is taken care of, without wasting valuable time on manual tasks.
Rate optimization CAN happen alongside engineering optimization
Engineering optimization deals with direct performance impacts, like rightsizing, autoscaling, instance shutdown schedulers, etc. This requires high business context and direct engineering involvement
Rate optimization, on the other hand, is very objective and purely focused on the finances discount instruments in the cloud. It’s about paying the least amount for the resources you use. Thus, it can be done in a low-context environment and is more effective with automation than with human management.
No vendor in the space other than ProsperOps applies automation to Google Cloud CUD management and purchases. While there are many recommendation tools on the market, no one else is taking direct action to continuously optimize rates for customers.
Reducing complexity with the right cost optimization tool
Despite the high value that adopting Google Cloud may provide, it remains complex. It’s unlikely that you will want to dedicate your time learning about all of the nuances and best practices of CUDs when you could be working on actions that drive your business forward. To reduce this complexity without sacrificing results, you need the right tool.
ProsperOps is the autonomous tool for Google Cloud rate optimization.
ProsperOps doesn’t make recommendations — we go one step further and take action on your behalf. This greatly reduces the complexity of rate optimization in Google Cloud and is more effective than manual management as it eliminates human error. Without real automation, most companies only manage to save 20% off on-demand rates — well below the 60% advertised by cloud providers and RI brokers.
Plus, ProsperOps’ optimization engine runs 24/7, taking potentially hundreds of actions in the background and automating away complex tracking of requirements for resource-based and spend-based CUDs. For you, this means more time back in your day to work on other optimization priorities.
What’s on the Horizon for FinOps + Google Cloud?
Google Cloud is pushing the limits forward for many FinOps initiatives and tooling including:
Continual expansion of discount instruments and services
Google continues to expand its native FinOps tool kit, with new features and capabilities released regularly. We’re particularly excited about the continued expansion of committed use discounts into new services. We also appreciate Google’s continued efforts to expand on the flexibility that these discount instruments offer, through more available actions and direct API support.
We can also expect to see better recommendations for various engineering optimizations via the Recommender API, as well as more customization with default CUD recommendations, which allow customers to analyze trends and set lookback periods.
ML/AI and anomaly detection
Customers can also get excited about more features like AI-driven anomaly detection. These features already deliver impressive benefits, and they will only continue to improve.
Adopting the FinOps FOCUS initiative
A major point of interest for FinOps teams is FinOps FOCUS, the open-source specification normalizing cost and usage datasets across cloud vendors.
Supported by the FinOps Foundation, this initiative aims to reduce complexity for FinOps Practitioners to help them make data-driven decisions, maximize the cloud’s business value, and transfer their data skills across clouds, tools, and organizations. Google Cloud has taken the first steps to supporting this specification with a BigQuery view available for customers to test out.
Continuing Education and Cross-Community Collaboration Are Key
To achieve ultimate cost optimization in Google Cloud, more people need to understand how Google Cloud operates. Organizations should prioritize collaboration, centralization, and greater knowledge-sharing. This will spur wider adoption of Google Cloud and, in turn, foster new FinOps strategies to maximize ROI on Google Cloud — both today and into the future with the platform’s growing features library.
Making use of the tools at your disposal is critical for successful Google Cloud operations. Fortunately, not every tool requires deep platform knowledge or a granular understanding of your organization’s resource usage. When you leverage a rate optimization platform like ProsperOps, you relieve your team of the daily burden of manual monitoring and optimization.
Even if you have the best experts on your team, remember that ROI isn’t just about revenue — it includes the time and effort your team spends to manage your Google Cloud resources. Leverage those experts for greater knowledge-sharing about Google Cloud across your organization, particularly within cross-functional teams like Engineering and Finance. Continued education makes your company stronger as a whole and boosts your ROI through greater efficiency, better processes, and more hands-off resource management.
If you are ready to get started with Google cloud cost optimization, schedule a demo with ProsperOps experts today!