Based on the current economic turmoil, businesses are looking for ways to do more with less. As a result, cost optimization in the cloud has become top of mind for the C-suite.

Since FinOps is geared toward optimizing and making the cloud more efficient, ProsperOps Inc. is an automation platform for FinOps meant to enhance cloud savings, according to Chris Cochran (pictured), co-founder and chief executive officer of ProsperOps.

“The way to think about ProsperOps is we’re an automation platform,” Cochran explained. “We’re sort of watching passively at all the things the engineering or DevOps teams are doing in the environment. We push all of that data through an optimization algorithm that says, ‘Given all the changes that are happening in the environment, what are the discount instruments or the rate optimization opportunities that allow the customer to end up paying less?’”

Cochran spoke with Lisa Martin, industry analyst for theCUBE, SiliconANGLE Media’s livestreaming studio, during a CUBE Conversation in advance of the “Analytics and Cost Optimization” AWS Startup Showcase on June 8. They discussed why it’s pivotal to automate FinOps and the role that ProsperOps plays in helping companies realize their objectives. (* Disclosure below.)

How rate optimization comes to play

As cloud usage becomes a burning issue, the need for rate optimization is front and center. ProsperOps makes this a reality, which enables enterprises to use the cloud dynamically, flexibly and elastically, Cochran pointed out.

“We focus very closely on rate optimization, and that’s sort of a new term. And a lot of people, a lot of engineers think about usage optimization: How do you use less cloud?” he asked. “The complement to that is rate optimization, and that’s all about how do you pay less for what you use? That’s really what our platform focuses on. We do that for AWS compute today.”

The ProsperOps-Amazon Web Services Inc. partnership is intended to unlock the value of the cloud. The collaboration makes enterprises to realize more savings through automated rate optimization, according to Cochran.

“I think the way AWS looks at it is if I help my customers or I use partners to help them optimize 60% of their bill on things like compute, those dollars end up flowing to other parts of the AWS portfolio,” he noted. “Our provocation is that if you are really automating the use of these discount instruments, you can achieve results much higher than you previously imagined.”

Measuring optimization with a FinOps metric

For the rate-optimization strategy to be effective, ProsperOps uses an outcome-based metric called “effective savings rate” to maximize FinOps. The ESR shows various parameters, such as discount instruments, residual income and savings plans for better outcomes, according to Cochran.

“When it comes to rate optimization, I think the challenge is how do you speak in terms of the outcomes?” he asked. “There really wasn’t a great metric that gave you an outcome-based view, sort of a return on investment equivalent metric, and so the effective savings rate is something we worked on very early. It’s really how our entire model is tuned.”

With at least a 40% ESR target, ProsperOps pushes the FinOps narrative forward. In fact, ESR is similar to return on investment in a savings plan because the essence is to have a clear view across all the compute resources, Cochran pointed out.

“It’s given us a chance to really understand the state of rate optimization in general,” he stated. “What the data will tell you is even though we’re in a world with lots of great tools for telemetry and reporting, etc., you have to be above the 75th percentile of AWS optimizers to be getting a 20% effective savings rate. What we target for our customers is 98%, or the 98th percentile, which means that your effective savings rate goes up to greater than 40%.”

Here’s the complete video interview, and be sure to check out SiliconANGLE’s and theCUBE’s upcoming “Analytics and Cost Optimization” AWS Startup Showcase event on June 8:

(* Disclosure: ProsperOps Inc. sponsored this segment of theCUBE. Neither ProsperOps nor other sponsors have editorial control over content on theCUBE or SiliconANGLE.)

Photo: SiliconANGLE