“You discover your cloud architecture is immature when you’re surprised by the bill.” That’s what John Roese, global chief technology officer of Dell Technologies, said in a recent Wall Street Journal article—“CIOs Still Waiting for Cloud Investments to Pay Off.”
In today's rapidly changing IT landscape, cloud has become the backbone of modern business operations. Cloud is a way to keep pace with the competition. It provides levels of scalability, flexibility, and speed that data centers can’t afford. And while cloud is a way to lower IT costs, it can prove to be more expensive than expected. Why? Because the proper cost management strategies have not been put into place.
That’s where FinOps comes into play. FinOps is a cloud financial management approach aimed at optimizing cloud spending.
Let’s explore the three ways that FinOps helps companies get their costs under control and meet changing needs. I’ll sprinkle in some capabilities of the OpenText FinOps solution—Hybrid Cloud Management X (HCMX)—to make things tangible.
1. Identifying and eliminating sources of waste
The first step in cutting cloud waste is to gain visibility into spending across multiple clouds, teams, and resources. You need to consolidate all that spending (and cost) data and put it into an easy-to-interpret format that shows changes in real time. This sets the foundation for effective cost management.
HCMX does that and more. With HCMX, you get a complete, unified, real-time view of spend and usage across all clouds. It enables showback by mapping costs to projects, business units, and cost centers. And it provides personalized views—allowing teams and leaders to see their spending data without distracting noise from other sources. Not only can everyone make more informed decisions, but they are also more motivated to be financially responsible, accountable, and resource efficient.
Once you know your costs, you need to take control of them. FinOps provides guidance for ongoing budget management, and HCMX gives you the means. For example, you can set spending expectations and limits with warning alerts when overages are about to occur. When you stop reckless acts of provisioning it’s easier to plan your investments and stay on budget.
FinOps—and HCMX—also lean on AI for cost control. For example, HCMX leverages machine learning algorithms to look at cloud usage patterns and auto-generate savings recommendations—suggesting that you take advantage of the commitment-based discounts cloud vendors offer. Recommendations like these can lower cloud costs by as much as 72 percent.
Given that a large portion of most IT budgets is allocated to cloud services, cutting costs by even a small percentage can result in significant savings.
2. Engaging engineers with workflows and unobtrusive guardrails
According to the 2023 FinOps Foundation survey, empowering engineers to take action and be more financially responsible has been the top concern of FinOps practitioners for the past three years.
Engineers play a crucial role as the primary consumers of cloud services, yet companies often struggle to involve and engage them in FinOps. In particular, their validation of AI recommendations is essential in determining which actions are worth executing. The most effective approach therefore involves combining AI-powered recommendations with human input (most frequently input from engineers), which can be facilitated by automating workflows. Workflows bring recommendations directly to engineers' interfaces, enabling them to take action directly from the platform and resulting in a best-of-both-worlds solution that combines the power of AI and human input. HCMX stands out from the competition by delivering on this promise of an effective combined AI-human approach, made possible by its foundational building blocks: a modern self-service portal and a powerful built-in engine for automation and orchestration.
The second challenge pertains to implementing proactive cost controls for provisioning to prevent overprovisioning and costly surprises caused by engineers. However, it is crucial to do so without impeding their productivity or limiting their flexibility.
With HCMX, you can answer this challenge by establishing self-service guardrails that allow engineers to perform their tasks without incurring unexpected costs. Guardrails can enable engineers to provision only cost-effective, company-compliant resources; disallow specific regions or instance sizes; or create approval flows that are tied to specific scenarios requiring additional validation. Safety measures like these put business leaders at ease and give engineers the peace of mind to work without fear of making mistakes.
3. Building a Bridge to GreenOps—A Look Ahead
“By 2024, 80% of G2000 companies will capture their carbon data and report their enterprise wide carbon footprint using quantifiable metrics compared with 50% today,” according to IDC FutureScape: Worldwide Sustainability/ESG 2023 Predictions. And in the Forbes article, “GreenOps Carbon Footprint Trends Closer to Cloud Developer Efficiency,” we learn that environmentally conscious cloud consumption decisions are being made at every level of the business.
As companies step up their sustainability efforts, GreenOps practices are being incorporated into the FinOps. That means companies will soon be able to measure the carbon footprint of their cloud operations, identify areas where they can improve their sustainability, and make informed tradeoffs between cost and carbon.
“Integrating environmental sustainability practices into FinOps makes sense,” said Srikanth Natarajan, a chief technology officer at OpenText. “FinOps is clearly positioned to track cloud spend and usage. Integration of FinOps with asset management and software management has already occurred, so all puzzle pieces are in place for tracking and managing the environmental impact too."
Don't miss our upcoming event:
FinOps Virtual Forum | May 3-4, 2023 | Live session daily at 8:00 a.m. PDT | 5:00 p.m. CET
Want to learn more?
Explore the resources below to learn how to get more cloud for your money with HCMX—the OpenText FinOp solution.
- View all HCM blog posts here.
- Visit our webpage.
- What is FinOps?
- Watch our virtual roundtable event with guest presenter David Linthicum.
For any other questions or a free demo request, please don't hesitate to reach out to us. We'd love to hear from you!