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The Trouble with FinOps

IT leaders in the face of increased economic headwinds are looking to reduce cloud computing costs but it’s turning out to be more challenging than many of them anticipated. Cloud infrastructure is typically provisioned by developers using infrastructure-as-code (IaC) tools with little to no supervision. The reason for this is developers have longed argued that waiting for an IT team to provision cloud infrastructure took too long. Developers would be more productive if they just provisioned cloud infrastructure themselves.

However, after ten years of cloud computing it’s become apparent there are a lot of cloud infrastructure resources being wasted. Developers that don’t pay the monthly bills for cloud services tend to view the infrastructure resources made available as essentially being infinite. It’s usually not until someone from the finance department starts raising cost concerns that developers even become aware there might be an issue.

As part of an effort to bring some order to what has become a chaotic situation, IT leaders in collaboration with finance teams have been embracing financial operations, a methodology for embedding programmatic controls withing developer workflows to reduce costs. Otherwise known as FinOps, these efforts are trying to strike a balance between promoting innovation and making sure cloud costs are if not outright reduced at the very least become more predictable. In fact, FinOps and platform engineering, a methodology for centralizing the management of DevOps workflows at scale are going to be naturally linked.

The challenge is that adopting best FinOps practices is not quite as easy as it might seem. A survey of 500 executives, engineers and developers at companies with over 5,000 employees in the U.S., Canada, United Kingdom and Australia conducted by Wakefield Research on behalf of CloudBolt Software, a provider of a platform for managing distributed computing environments finds more than three-quarters of respondents (76%) said they will have to wait two to three years to see real FinOps-driven results.

Almost every respondent (98%) works for an organization that already has a formal FinOps team (82%) or is actively considering adding one (16%). More than half of existing FinOps teams (54%) were formed just 12 months ago or less, the survey also found. The trouble is, only one of the 500 respondents claimed to achieve any material value from FinOps to date.

A total of 45% of respondents also questioned FinOps efficacy in the real world. Specifically, 15% flagged FinOps as being “theoretically easy but harder in practice,” with another 13% regarding it as “much ado about nothing.” Another 10% said it is “nothing more than a suggested framework,” while 7% labeled FinOps as “a necessary evil.”

Nevertheless, a full 89% described FinOps as the silver bullet for reining in the complexity of cloud cost management, with 68% noting that FinOps is among their organization’s most strategic priorities for 2023. The average size of a FinOps team is now 4.1 people, with the “director level” being the senior-most leader on the team 53% of the time, the survey noted.

A total of 71% noted that achieving this year’s IT goals without a FinOps practice would pose a significant challenge, with 74% reporting that FinOps is now on par with ITOps, DevOps, SecOps and other IT disciplines. In addition, 71% of respondents said funding for FinOps initiatives increased in 2023, with 58% reporting key performance indicators (KPIs) and metrics to the C-suite or board of directors.

Developers, of course, tend to jealously guard their prerogatives. Convincing them to give up their divine right to provision cloud infrastructure with little regard for cost is going to be a challenge simply because each one of them only consumed so much. The part they don’t appreciate until someone makes it plain is how much all those cloud instances wind up costing the organization in the aggregate when the tab inevitably comes due at the end of every month.

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