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Observing the future
The importance of observability in FinOps

Mangesh Patil
13 Oct 2023

FinOps is critical to effective cloud computing – and observability is the core of FinOps.

Cloud practitioners face three main challenges to optimizing cloud consumption and cost:

  • Understanding where all costs are coming from
  • Identifying the cost for specific applications or teams
  • Predicting costs for the future and budgeting purposes

The answer to each one comes down to the concept of observability. Observability is the ability to gain insight into the behavior and performance of systems, applications, and services by collecting, analyzing, and visualizing data from various sources. This visibility is the starting point for optimizing cloud environments and reducing waste, saving money, and improving efficiency.

Observability vs. monitoring

Observability is an evolution of traditional monitoring. Monitoring relies on building dashboards and alerts to escalate known problem scenarios. However, monitoring alone can’t always detect previously unknown problems, especially during times of high load. Observability, on the other hand, emphasizes visibility into the state of the digital service by exploring high cardinality data outputs from the application. This allows for a more comprehensive understanding of the system and informed decision-making about its design and operation.

The first steps to gaining observability in FinOps

To maximize the benefits of observability in FinOps, organizations should:

  • Define what data to collect: system performance data, application logs, and user activity data, for example
  • Set up monitoring and alerting: leverage a variety of tools to collect data and set up alerts for issues
  • Analyze data: identify patterns and optimize performance
  • Take action: use the information gathered to resolve issues and improve performance, moving from FinOps observability to FinOps orchestration

Once these basic structural elements are in place, it’s time to optimize. That’s where distributed tracing comes in.

Distributed tracing for better visibility

When it comes to monitoring resources, backend components have all the low-level information we need, such as CPU and memory usage. But, they often miss out on the high-level context of who made the request and why. Distributed tracing enables us to pass that information down to the backend and infrastructure, making it easy to see how resources are being used by different business units, products, or tenants. This information can be a game-changer for capacity planning today and can help us prepare for future growth.

From infrastructure to practice

A successful FinOps strategy brings traceability from the level of architecture into everyday use through the practice of observability. Observability is a foundational component of FinOps, providing the data and insights organizations need to manage their cloud environments effectively. It requires thorough planning and execution, but the rewards are well worth the effort.

A leader in cloud and operational optimization, Capgemini is helping organizations around the world to optimize their cloud services, saving money and lowering their carbon footprint. 

Looking to go deeper into FinOps? Check out our FinOps Page and the whitepaper – The rise of Finops. 


Mangesh Patil 

Cloud Architect, infrastructure and security