Cost models help engineering teams understand the financial impact of a product or architecture before it reaches production. But what makes a model useful, how accurate does it need to be, and what happens when real usage differs from the assumptions? In this episode, Mike speaks with Mariano Szklanny, Principal Operations Manager at Okta, about how cost modelling connects engineering decisions to pricing, margins, and business risk. Mariano shares a real example where a cost model exposed duplicated fixed infrastructure costs early enough for the team to change the architecture. He also explains how Okta decides which projects require modelling, how models are built and validated across teams, and how production data is used to compare assumptions with reality. What You’ll Learn How a cost model changed the architecture of an Okta feature The difference between a cost model, budget, forecast, and cloud calculator Why models should begin with unit cost before forecasting total spend How to identify the fixed and variable costs that matter most How Okta decides which products and features require cost modelling Why cost models are also communication tools for Engineering, Product, Finance, and Pricing How AI reduced the time required to build a model from one or two months to roughly one or two weeks Why Mariano replaced spreadsheets with interactive applications How instrumentation allows teams to compare assumptions with production usage Why cost modelling should enable business decisions rather than simply block spending Episode Chapters 00:00 Why engineering teams need cost models00:49 A cost model that changed an Okta architecture03:06 What Okta does and Mariano’s path into FinOps06:05 What is a cost model?09:10 Cost models versus budgets, forecasts, and cloud calculators11:38 How Mariano builds a cost model13:28 Unit costs and adoption scenarios14:19 How AI has changed the modelling process16:35 How long does a cost model take to build?18:05 Deciding which projects need modelling21:10 How Product, Engineering, Pricing, and Finance work together24:11 Instrumenting products and validating models after deployment27:17 Balancing cost with growth, security, and reliability30:16 Advice for teams getting started About Mariano Szklanny Mariano Szklanny is a Principal Operations Manager at Okta, where he combines a software engineering background, a Computer Systems Analysis degree, and nearly a decade at software consultancy Southworks with financial skills. He builds product cost models that surface financial risks and opportunities early and help protect margin. Mariano joined Auth0 as Engineering Operations Manager in late 2015, reporting to the CTO and co-founder, and has been at Okta since its acquisition of Auth0 in 2021. Cloud cost management found him at Auth0 when he was asked to investigate a runaway AWS bill. The results led Finance to bring him onto the team and expand the work from cost optimization into profitability. Today, he works across Product, Engineering, Pricing and Packaging, and FP&A, connecting engineering and product decisions to what they cost to operate at scale. Mariano Szklanny on LinkedIn This episode is sponsored by Frugal AI.
