Financial Operations and Cloud

Andrew Hatch

@hatchman76

What we'll cover

Seek and cost management today

Regrets and hindsight

How we account for cloud

Master Biller account overview

Saving money with cost discounting

Hidden costs of discounting - how to avoid them

Improvement and learning

Business orgin

Based in Melbourne

Mostly in AWS

Ship a lot

Seek today...

1997

#1 Jobs Site

=160

1000+

But life is much better now

No more silos, we ship lots of code, we diversify our software

Because our software systems evolved to a much more distributed complexity model

In the year 2019

DevOps as a Culture

But our system is getting complex. Teams produce lots of API's

Autonmous teams enable us to move faster...

Those API's have dependencies

Distributed complexity, not just networking, security and knowing what the heck is going on

Distributed complexity has...

...its challenges

1500+

1000+

200+

4600+

~160

+2K

30+

Generally things go okay...

~1 hour

Regrets... we've had a few

Hello? Anyone?

Blended,
Unblended,
Amortised?

Accounting for AWS, 60, 000 feet view

Cost Centre basics

CAPEX

OPEX

Internal Orders

AWS Account to Cost Centre setup

This works for Seek

Master Biller account

Managing Reserved Discounting

Reserved Instances

90%

8%

Fully upfront
Partial Upfront
No Upfront

>80%

coverage

>90%

utilisation

1 month

Accounting for Discounting

Partial upfront

Upfront fee

Monthly recurring

Blended rate?

Unblended rate?

Know your cost allocation strategy

Cost Amortised

Cost Blended

Cost Unblended

Cost List

Upfront and Monthly recurring charged to payer account
CAN be used for invoice reconcilliation

Upfront charged to payer account
Monthly recurring charged into accounts where discounts applied
CAN be used for invoice reconcilliation

Upfront amortised into accounts where discounts get applied
Monthly recurring charged into accounts where discounts applied
CANNOT be used for invoice reconcilliation

Retail price, no discounts or reserved instance costs applied
CANNOT be used for invoice reconcilliation

Cost Amortised

Cost Blended

Cost Unblended

Cost List

Up to FY19 we used Cost Blended... that was a bad idea!

How bad?

Actual growth

WTF?!?!?

This is fine!

How we use cost metrics

Invoice
Reconciliation

Cost Unblended

Engineering
Teams

Cost List

+/- 5%

Final thoughts on discounting

Organisational investment in your cloud partner

Manage it in a separate cost centre

Engineering Teams should not optimise to predicted discount effects

Continuous Improvement

Account Group Metadata

Business Mappings

Views and Budgets

FY20

Final thoughts

Your teams will churn through cloud infrastructure. They need clear visibility on this spend. Without discounting effects

Choose your cost metrics wisely. Keep it simple. Make sure everyone is clear on what they focus on

Involve Finance from the start. Aim for Finance to control invoice reconcilliation and assist with management of discounting investments.

AWS Cost Management is very complex. Use a tool like Cloudability, don't try and build this capability in-house.

Thank you

https: //finops.hatchman76.com