Optimizing Cloud Costs, Enhancing FinOps Practices and Microsoft Contract Negotiations for a Leading Finance Company in Norway (Formue AS)

FinOps Consultant | Microsoft Advisor

In the dynamic world of cloud operations, clarity and control over costs are paramount. This became especially evident when a leading finance company in Norway sought help to optimize their cloud costs, improve FinOps practices, and renegotiate their Microsoft contracts. Their journey is a remarkable example of what expert freelance guidance and collaboration can achieve. 

Understanding the Challenge 

The finance company faced a significant hurdle: they couldn’t fully comprehend their cloud bill. With an annual 4M NOK commitment for Microsoft 365 (M365) and other products, alongside 5M NOK Azure consumption, their IT department struggled to manage costs effectively. The existing CSP contract lacked strategic negotiation, leaving them with minimal savings opportunities. 

To tackle this, following key services were provided to the customer: 

  • FinOps implementation 
  • Microsoft Licensing C Optimization 
  • RFP Creation and Negotiation Support with Suppliers (CSP, LSPs) 

The tools leveraged to deliver these services included: 

  • OptScale for FinOps 
  • Microsoft Native Azure Tools 
  • Lucidity (Storage) for Proof of Concept 
  • M365E3 + CoPilot 

Their CTO summed up the situation with this simple yet pressing statement:
“We currently don’t understand our cloud bill!” 

The Objective 

The company’s goals were ambitious yet clear: 

  • Achieve long-term cost optimization for their Microsoft stack. 
  • Establish a robust and transparent FinOps framework. 
  • Renegotiate the CSP contract for M365 and Azure to secure better terms. 

A Strategic Approach 

I developed a comprehensive plan to address these challenges, combining advanced tools, expertise, and a collaborative mindset. 

FinOps: Laying the Foundation 

  1. Assessment & Maturity Level Definition: Conducted a detailed FinOps maturity assessment across key domains. 

  1. Tool Implementation: Introduced tools like OptScale and Azure Cost Explorer to enhance visibility into cloud spending. 

  1. Storage Optimization: Migrated data to cost-effective long-term storage tiers, such as Blob storage in Hot, Cool, and Archive modes, reducing costs without compromising performance. 
  1. Compute Rightsizing: Collaborated with administrators to right size compute resources, resulting in a 20% cost reduction. 
  1. AHUB Savings: Additional savings were achieved through the implementation of Azure Hybrid Use Benefit (AHUB) with the new Microsoft contract adding subscriptions for Windows Standard to the CSP mainly driven by the 72% of the cloud consumption is in the compute area. 
  1. Process Setup: Developed a streamlined process for rightsizing resources, applying AHUB benefits, and implementing reserved instances. Saving  Plans currently not in place but to be considered as a next step. 

Microsoft Optimization: Refining Licensing Efficiency 

  1. License & User Profiling: Replaced high-cost M365E5 licenses with more cost-effective M365E3 and E1 licenses, achieving a 20% savings. 
  1. Usage Optimization: Removed unassigned licenses, ensuring only active/assigned users contributed to annual commit costs. 
  1. PowerBI Visualization: Implemented PowerBI visualization solutions tailored for 20 users, either through M365E5 or Power BI + Microsoft Fabric configurations. 

RFP Creation & Contract Negotiation: Securing Long-Term Gains 

  1. Engaged multiple suppliers (2 LSPs and 4 CSPs) to create a competitive environment. 
  1. Decision Matrix Example 

  1. Conducted negotiations resulting in a 3 year long-term CSP agreement with double-digit discounts. 
  1. Successfully negotiated and designed a customized final Reseller contract with the agreed discount for 3-years on Microsoft products (CSP) with an audit clause for the customer. Integrated specific SLA clauses for CSP Services. Implemented, on demand of the customer, the DORA (Digital Operational Resilience Act) Framework as part of the contract. 

 

The Results Speak for Themselves 

By the end of this 9-month project (March–December 2024), the outcomes were transformative: 

  • 35% overall savings on cloud costs. 
  • 10x cost-to-savings ratio, underscoring exceptional value. 
  • A transparent, sustainable FinOps framework empowering the IT team to maintain these gains. 

Client Feedback 

Marius Jahren, CTO of Formue AS, shared his thoughts:
“Your support and effort really made a difference for us – not only the results and savings directly but also the competence and knowledge you have equipped the team with during the process.” 

Conclusion 

At Appstrato, we proudly celebrate the success of the freelancer-supported engagements, highlighting the power of the gig economy service delivery model. This project showcases how strategic planning, innovative tools, and expert freelance contributions can revolutionize cloud cost management. 

The work didn’t just deliver cost savings; it equipped the client with a framework for ongoing success in their cloud journey. Let this story inspire organizations to embrace the agility, expertise, and value the gig economy brings to technology-driven transformations. 

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