I posted this question last week to FinOps folks. I got a lot of great answers in the comments. Thanks to all of you who reacted!
If you did not have the time to read through all those comments, I summarize it here in this nugget (bite sized knowledge blog post).
First, let’s clarify what 730 is:
730 is the number of hours in an average month.
And here is how to calculate it:
First, the number of hours in a year is:
365 days x 24 hours = 8760 hours
Then, divide this by 12 to get the hours in an average month:
8760 hours / 12 months = 730 hours
I have put the word average before ‘month’ for a reason.
Months have different lengths varying between 28 and 31 days. If you happen to compare January to February without adjustment for the number of days, your difference is a whopping 8.7% drop from January to February (or in reverse January has 10.7% more days than February). Not a negligible difference for comparing monthly values in business.
Skip the next paragraph.
Like to split hairs? Yes, I know, February goes up to 29 days in leap years (except every 400 years), but let’s jump over this for the sake of simplicity. You celebrate your birthday every year even if you were born on 29 February, don’t you?
So, who likes to be average?
730 does. And I like 730`s averageness. It allows me to use it for quick napkin calculations of monthly costs of cloud services where the unit rate is most often given for an hour (but sometimes billed by the second).
Like compute. Like compute is often the top item in your bill, too.
When I look at those tiny fractional compute unit price figures, for example, $0.0042, with the supernumerous zeroes, my eyes are getting wet, the balls are falling out, and the cogwheels in my brain start to squeak.
Bring 730 to the rescue!
Do the life-saving multiplication and let the bigger numbers save our souls. Honestly… which one is easier to grasp and compare?
| Instance name | Hourly rate | Monthly rate* |
|---|---|---|
| t4g.nano | $0.0042 | $3 |
| m5.2xlarge | $0.3840 | $280 |
| c7a.4xlarge | $0.82112 | $599 |
| x2idn.24xlarge | $10.0035 | $7303 |
* Monthly rate calculated with 730 hours, rounded to whole dollars
Marketing loves obscure stuff. Like $99.97 instead of the $100 bucks straight talk. A scientific kind of deception. Bit grey zone. Sometimes borderline fraud. Watch out for yourself and do the math that makes your life easy.
Back to 730.
The good news is that the heavyweight providers have also realized the usefulness of 730 and use it in their pricing calculators. Words matter, they are not cost calculators as that could leave a bitter aftertaste.
A word of warning.
Different providers use different numbers for what a month is. Just make sure to check out and compare figures accordingly.
What else 730 is useful for?
You can use it to normalize your monthly cost figures for comparison. In contrast, normalizing for 30 days will rip 5 days off the year (-1.37%) since 12 x 30 is just 360 and not 365. Another good option for comparison is to work with daily averages or daily consumption rates.
You can also use 730 to amortize your costs. Just divide your equal monthly payments (e.g. commitment fees) by the figure and apply to all days throughout the 365 days of the year.
You can also use it for extrapolation and do simplified forecasts and planning estimations. Multiply the 730 hours-based monthly cost by 12, and you get an exact annual figure for 365 days.
I even got an insightful suggestion of its usefulness as the Time To Live (TTL) for non-critical environments. Nice one! Even so, Time to Live is a loaded expression. Even philosophical. But I will not cross that boundary here.
I hope you learned something and enjoyed it! That’s my pleasure! Keep learning and subscribe to the FinOps Builders blogletter!
I cover an eclectic mix of FinOps, engineering, business intelligence and management topics. All things useful to build a strong practice and sharpen your profile.