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With the cloud becoming such an integral part of the IT strategies of so many enterprises, it’s natural that managing the expense of all these services would be an emerging priority for executives.
Although the cloud is touted by providers as a way to potentially save money because of greater efficiencies and shared expenses, an abundance of cloud-based resources can also lead to cost runaways if not managed properly. That’s where FinOps comes in.
What is FinOps?
Blending the terms finance and operations, FinOps is a business discipline and set of best practices and technologies for optimizing enterprise cloud spend.
The FinOps Foundation’s Technical Advisory Council further defines FinOps as “an evolving cloud financial management discipline and cultural practice that enables organizations to get maximum business value by helping engineering, finance, technology, and business teams to collaborate on data-driven spending decisions.”
The foundation, a program of the Linux Foundation dedicated to advancing people who practice the discipline of cloud financial management through best practices, education, and standards, says at its core FinOps is a cultural practice for managing cloud costs — one in which everyone takes ownership of their cloud usage supported by a central best-practices group
The term “FinOps” comes from the DevOps software development model, with the addition of the financial component, and emphasizes communications and collaboration among various teams involved in the use of cloud services.
“The FinOps market is white hot today, growing faster than both IT general and public cloud spending,” says Jevin Jensen, research vice president of Intelligent CloudOps Market service at IDC. “I expect this to continue as IT budgets will be under increasing pressure in 2023. FinOps culture change and the rapidly advancing cloud cost transparency tools offer an excellent opportunity for enterprises to realize tremendous cost savings.”
How does FinOps work?
As a practice, FinOps operates by bringing together representatives from IT operations, development, finance, and procurement, as well as business unit leaders, Jensen says. Doing so gives the organization a central, cross-functional team focused on optimizing the enterprise’s outlay in the cloud.
“Enterprises can create a single source of truth for cloud spending,” Jensen says. “Additionally, they can develop metrics and set goals for each metric, including forecasting cloud spending, targeting saving opportunities, and benchmarking...