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FinOps best practices reverse runaway cloud spend
How Equal Experts helped a leading European insurance provider with lean, cost-efficient cloud engineering
When one of Europe’s largest insurance providers found its cloud hosting costs ballooning to over $3 million per year, the leadership team turned to Equal Experts to reverse the trend and optimise its architecture, while ensuring no interruption to its systems and services.
Equal Experts responded by introducing the insurance provider to FinOps principles for lean, cost-efficient cloud engineering, a concept that the client had no previous experience with. Equal Experts’ platform engineers worked with the provider’s engineering team to apply the FinOps approach retrospectively. This involved re-engineering the insurance provider’s cloud estate, which had been developed without cost as a priority, while ensuring that sensitive systems depending on cloud data stayed live and unaffected.
Equal Experts worked with the insurance provider’s budget owners, Head of Digital Operations and DevOps teams to understand the constraints and concerns that had prevented action to manage costs in the past, and develop sensitive strategies for tracking, optimising and reducing spend. Through a series of controlled experiments, the team was able to demonstrate the capability of a FinOps culture for reducing spend across the cloud estate, while managing risk.
Outcomes
23%
cut to in-year costs
£90K
cut in per month spend
35%
run rate reduction
About the client
Our client is one of Europe’s leading providers of insurance and reinsurance, covering more than 10 million vehicles, 7 million homes and 3 million health insurance policyholders in its home market alone. It operates globally, providing services across Europe, North America and Asia Pacific.
Industry
Insurance
Organisation size
Over 11 million policyholders globally
Location
UK
Challenge
The escalating costs of non-transparent architecture
The cloud offers financial services providers massive potential for innovation and efficiency. However, when cloud architectures are developed without making cost an equal priority, the price of that innovation can multiply at an alarming rate.
When the costs of the cloud services developed for one of Europe’s leading insurance providers surged past $3 million, reducing spend became a priority for the executive team. However, the provider’s head of digital operations and developer teams discovered that unpicking their cloud architecture, and identifying which costs could be safely reduced, was almost impossible.
The insurance provider had spun up test environments quickly with an eye on innovation and the returns that it could generate, but found itself committed to continuing to run those expensive environments, in order to ensure no interruption to vital systems and services. By running its cloud systems as though they were on-premises infrastructure with no usage or compute fees, it had committed itself to escalating costs. Risk aversion due to the sensitive nature of insurance systems left the organisation with little to no scope for retrospective cost cutting.
Solution
Enabling experimentation through a scientific approach
Equal Experts responded to the challenge by applying established FinOps principles to the insurance provider’s architecture – and doing so through a series of carefully controlled experiments that could demonstrate how risks were being managed at each stage.
The Equal Experts team of five platform engineers, one tech lead and one delivery lead worked with the insurance provider’s developers to apply the three core principles of FinOps best practice: Inform, Optimise and Operate.
- Inform
The team used native cloud tagging tools, linked to billing data, to identify where money was being spent, and which applications were spending it. It was the equivalent of colour coding the individual strands in a tangle of spaghetti, to make it easier to unpick those pushing costs up. Capturing this data enabled them to demonstrate how the current approach, and concern to avoid risk, contributed directly to escalating spend. - Optimise
Having prioritised the areas of the cloud infrastructure with the greatest impact on costs, Equal Experts conducted risk-controlled experiments running workloads on more flexible cloud instances, which could trade continuous uptime for reduced costs. The team then presented the results of these experiments to the head of digital operations and the budget owners for each line of work, playing back the impact on performance at the same time as demonstrating the cost savings, and incorporating any feedback. In this way, they built a risk-assessed business case for each cost-optimisation measure. - Operate
Equal Experts encouraged a culture shift moving ownership for the cloud infrastructure to budget owners, rather than engineers making independent decisions with less consideration for cost. Those budget owners could then take informed decisions on the basis of the cost-control experiments, and roll out optimisations while maintaining the required performance levels for insurance operations. This cultural shift enabled ongoing momentum, with owners gaining visibility into where their budgets were going and pushing to change engineering practice.
Results
Reducing spend by following the money
The momentum built by Equal Experts’ scientific approach and increased visibility into costs for budget owners delivered dramatic results. The team met all targets for cost reductions in the first year of the engagement – and provided a strategy for continuing to optimise cloud infrastructure going forward:
- Within nine months, Equal Experts’ approach reduced the insurance provider’s cloud infrastructure spending from £3m per year to £1.7m per year, exceeding reduction targets
- Prior to engaging Equal Experts, the provider’s cloud spend had increased by £90K per month. Following the engagement, it has consistently reduced by £92K per month
- Equal Experts has identified further optimisation measures that will reduce cloud spend by a further £500K to £1.8m, a total cost reduction of 40%