The last few years have been pivotal for the digital-first economy, as the industry has witnessed a mega trend of shifting workloads and data to the cloud. The pandemic accelerated this trend, with work from home and remote working becoming the “new normal” and shifting to the cloud was no more a choice but a necessity.
“The latest insights from ISG research predict that Cloud spending will surpass US$350 billion by 2022 and continue to grow up to US$500 billion by 2025.”
But with opportunities come challenges. As companies increasingly build in the cloud, cloud bills are posing serious cost management challenges for businesses. “According to ISG estimates, about 28 per cent of the total cloud spending is wasted within the enterprise community, mainly due to idle, oversized or over-provisioned resources”. When the cloud environment isn’t correctly sized and the resources aren’t optimally utilized, bills may skyrocket. Constant monitoring and optimisation are extremely crucial in cloud adoption.
This has led to the development of FinOps as a new discipline, an evolving practice that enables organizations to get the maximum value out of the cloud, by forecasting and optimizing their cloud spending. This practice brings financial accountability to the variable spend model of the cloud, thus enabling organizations to make informed decisions on their cloud spending and design their cloud architecture in the most optimal way.
FinOps has become a must-have practice for all organizations which are present on the cloud, although establishing an in-house Finops team is not easy as it seems. According to a survey by FinOps Foundation, 30% of organizations found it challenging to find the right resources for their cloud cost optimization team. Since the implementation of FinOps often demands an organization-wide technology transformation, it is advisable for companies to approach a reliable and experienced FinOps partner. “ISG suggests that an organization needs to leverage third-party cloud cost management vendors to get the most benefits of cloud cost optimization.”
With the mushrooming of FinOps vendors offering their specialized services for organizations, choosing the right FinOps partner has become a challenge. Each vendor has unique capabilities and features to address the different pain points associated with cloud adoption. To choose the right FinOps vendor for your business, it is important to analyze and identify the challenges and priorities of your cloud transformation journey. While there may be several parameters to classify vendors, ISG has identified two broad categories and has further broken them down into sub-criteria.
The first category is FinOps Vendors by Platform, which comprises the comprehensive segmentation of the functionalities offered, along with the key vendors in that space(as shown in the table below)
Source: ISG Research
The second category is FinOps Vendor by Services, segmented with more focus on the service layer, along with platform and Saas capabilities. (as shown in the table below)
Source: ISG Research
Looking at these tables, we can see that each vendor has expertise in niche offerings. However, very few vendors have proven capabilities in providing holistic FinOps solutions using a combination of platform and cost optimization services. CloudKeeper, an end-to-end FinOps solution from TO THE NEW, has emerged as one of the leaders in this space when it comes to the segregation of vendors by Platform and Services.
CloudKeeper offers all-in-one cloud cost optimization capabilities and guaranteed savings of 5 – 15% on cloud bills at no extra cost and effort. It consists of a FinOps and Cost Management Platform and a team of FinOps experts who provide 24*7 monitoring, consulting and FinOps Services. While the other vendors claim to offer a good discount on specific offerings of AWS, CloudKeeper provides savings up to 15% on the entire AWS Bills without any commitments from the organizations whatsoever.
The Final Thoughts
For enterprises, FinOps has become a non-negotiable practice in their cloud transformation journey. A reliable FinOps partner could help organizations in overcoming any hurdles and hiccups and lead them towards better business outcomes.
Building and managing an in-house FinOps Department or Team requires a significant amount of time, expertise and investments, and it might turn out to be a sub-optimal business decision. On the other hand, a FinOps Partner would bring in their dynamic experiences and maturity of working with a wide range of companies and could integrate well with the system, providing the best cloud cost optimization tools and services.
Before finalizing a partner, you must figure out your cloud optimization requirements and zero in on the partner who could deliver the maximum value in terms of offerings and advantages. To reap the full benefits of Cloud Transformation, it is imperative to embrace changes not just at an operational level, but also in the mindset and behaviour towards cloud financial management practices.
“Based on ISG’s estimates, the FinOps Market is expected to grow at a rate of more than 30 per cent YOY & there are high chances it will grow at a higher rate in the coming years.”
The future prospects of the currently nascent FinOps vendor market look brilliant and would most certainly outperform any industry forecast. In short, now is the best time to find yourself the right FinOps partner.
To read the Whitepaper by ISG, click here
(The author is Mr. Narinder Kumar, COO, and Co-founder, TO THE NEW. and the views expressed in this article are his own)
