Reference
The terms used on this site
FinOps vocabulary gets used loosely, often to make a simple idea sound like a product category. Here is exactly what these words mean when we use them.
Definitions
- Monthly cost report
- A recurring report that summarises cloud spend, compares periods, shows budget status, highlights material changes, and keeps cost ownership visible. Costfluent generates it from the same data and rules used in the product.
- Allocation coverage
- The share of spend that can be attributed to a team, product, customer or cost centre. Higher coverage makes budgets, reports, and ownership discussions more useful; unallocated spend should remain visible rather than being assigned by guesswork.
- Realised savings
- The reduction observed on the bill after a change was implemented, as opposed to the reduction estimated beforehand. Estimated, implemented, and verified savings are different states and should be reported separately.
- Effective savings rate
- What you pay compared with the relevant on-demand list price after commitments, credits, and negotiated discounts are considered. The rate is meaningful only when its scope, period, and price basis are stated.
- Shared cost
- Spend that serves several teams or products and cannot be attributed to one - a Kubernetes cluster, a shared database, an observability bill. Splitting it is a business decision rather than a technical one, so the method should be written down and agreed rather than inferred by a tool.
- Unit economics
- Technology cost expressed per unit of business activity: per customer, per order, per document, per API request. Converts an infrastructure number into one that a pricing or product decision can be made against.
- Technical gross margin
- Revenue minus the technology cost of delivering it. Tells you whether growth is improving the business or just enlarging it, which a rising revenue line on its own does not.
- FOCUS
- An open specification from the FinOps Foundation for normalizing billing data across providers. Support for the specification does not by itself prove that a particular provider, dataset, or import path works end to end.
- Showback and chargeback
- Showback reports allocated cost to the responsible team. Chargeback posts that cost to an internal budget or ledger. Costfluent describes allocation as showback and does not claim to perform accounting chargeback.
On written guides
There is no library of downloadable guides here yet. There will be, once there is something to write that is not already written better elsewhere. In the meantime the product pages describe the actual mechanics, and the FinOps Foundation publishes a genuinely good framework that we are not going to paraphrase and put our logo on.
The fastest way to learn this is on your own bill
Definitions are easier to follow when the numbers are yours. The Free plan lets you apply them to a small AWS or Azure environment.