Practise vocabulary for the FinOps lifecycle (Inform, Optimize, Operate), unit economics, cost per transaction, cloud bill anatomy, and cloud waste vocabulary.
0 / 5 completed
1 / 5
FinOps (Cloud Financial Operations) is best described as:
FinOps (FinOps Foundation) is defined as a cultural practice — not a tool or accounting method. Its core principle: "A FinOps team enables engineers to make cost-aware decisions while finance gains the variable spend visibility they need." The FinOps lifecycle: Inform (visibility) → Optimize (actions) → Operate (ongoing management).
2 / 5
The "Inform" phase of the FinOps lifecycle focuses on:
Inform = visibility. Most organisations start with poor visibility: a single cloud bill that cannot be attributed to specific teams or products. Inform phase builds: cost allocation tagging, dashboards (by team, service, environment), anomaly alerts, and forecasting. "You can't optimise what you can't see."
3 / 5
"Unit economics" in a FinOps context means:
Unit economics transforms "we spent $500K on cloud" into "we spent $0.003 per API call" or "$2.40 per customer per month". This makes costs actionable: "our cost per transaction increased 30% this quarter — which service change caused it?" Unit economics enables engineering and finance to speak the same language about cloud efficiency.
4 / 5
Cloud "egress costs" on a cloud bill refer to:
Egress is notoriously expensive: AWS charges $0.09/GB for data leaving a region to the internet. A service streaming 100TB/month of video = $9,000/month in egress alone. Multi-cloud architectures often discover that data transfer between clouds costs more than the compute savings. CDNs help reduce egress by caching at the edge.
5 / 5
"Cloud waste" vocabulary refers to spending on:
Gartner estimates 30-35% of cloud spend is waste. Common waste categories: idle/stopped EC2 instances still billed, unattached EBS volumes, unused Elastic IPs ($3.65/month each), over-provisioned RDS, forgotten load balancers, S3 without lifecycle policies. FinOps programmes typically target 20-30% cost reduction in year one by eliminating waste.