5 July 2023

Five Cost Optimisation Practices Which Do NOT Reduce Carbon Emissions

Common FinOps practices often inadvertently promote carbon efficiency as well as cost savings, but it is a mistake to assume they all do.

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By Ben Price
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Five Cost Optimisation Practices Which Do NOT Reduce Carbon Emissions

In the previous piece on this topic, it was highlighted that many businesses are executing cost optimisation strategies (FinOps) to decrease their cloud expenses, while overlooking that these practices may be substantially reducing their carbon footprint.

This oversight, we pointed out, represents a missed opportunity to quantify carbon savings, highlight environmental wins to stakeholders, and further galvanise FinOps teams to save money, using sustainability as inspiration.

The FinOps-GreenOps Disconnect

Away from those who miss the connection altogether, there are other parts of the cloud industry with a tendency to conflate FinOps and GreenOps in a simplistic manner that becomes counterproductive.

Although cost optimisation practices in the cloud often lead to less computation and therefore lower electricity use, this isn't always the case.

Carbon optimisation should therefore not be dismissed as a concept that simply coincides with cost optimisation; but as a practice which requires its own data and strategic planning.

Below, we examine five FinOps practices, commonly implemented by organisations, which do not align with carbon reduction.

Reserved Instances and Savings Plans

Reserved Instances or Savings Plans can get cloud users significant cost reductions, but if an enterprise has already paid for computation power they are more inclined to use it, potentially increasing usage and emission wastage, rather than reducing.

Changing computation region

A controversial choice as this is usually the first suggestion to reduce emissions for consultants that don’t understand the struggle of changing region. The only way this can reduce emissions is if the person making the decision has granular, live emissions data on each region. This data is not being used by most consultants and FinOps tools in an effective way to measure the increase or decrease this has in your emissions.

Using 3rd Party FinOps tools

Another controversial one, but FinOps tools in isolation may not be helping you save emissions. There are plenty that recommend or automate FinOps best practices but without every action or measurement being enriched with emissions data, you could be making choices which reduce cost but exponentially increase emissions and be none the wiser.

Cost Allocation Tags

Implementing cost allocation is a very important first step in generating some accountability and visibility on cloud costs and emissions, but in isolation it will not reduce your emissions. Using these tags to highlight problem areas and in conjunction with a strong FinOps and GreenOps function, however, can make a reduction strategy a lot more effective.

Negotiating Terms and Using Resellers

Larger companies often negotiate rates with cloud providers, enabling cost reduction. To do this would typically necessitate substantial usage and commitment which smaller companies can take advantage of through a cloud reseller.

Key Takeaways

At Greenpixie, we've dedicated years to developing a usage-based cloud emissions methodology. This is because we recognise that, while there is a general correlation, spend does not map directly to emissions.

For GreenOps to distinguish itself from FinOps and realise its potential as a force for carbon reduction, granular cloud emissions data is needed. With this data, C-suites and developers alike can be motivated to implement win-win practices, as well as GreenOps-specific practices.

The five FinOps practices outlined here are only a few examples. For those eager to truly understand the impact of their cloud use, integrating Greenpixie's emissions data into their existing FinOps dashboards can monitor the environmental impact of every decision made in the cloud, as well as plan for future transformations and migrations.