J.R. Storment
FinOps Foundation
Key Insight: The practice of FinOps continues to evolve around several key themes that all point to its deeper integration into existing processes, business frameworks, and technology environments. Across the globe from the Americas, to Europe, and to Asia, FinOps is shaping up to be the driver of value realization for all kinds of organizations.
The FinOps Foundation was thrilled to bring FinOps X to Europe this year, where we found a community eager to engage with and learn from each other. Thank you to all who presented for delivering this high-quality content to your fellow Practitioners, and thank you to all who attended for your excitement and participation. Check out the full recording of Day 1 Keynote here:
Watch the full recording of Day 1 Keynote from FinOps X Europe in Barcelona in November 2024.
The Evolution of FinOps: Key Themes
J.R. Storment, Executive Director of the FinOps Foundation, walked us through the evolution of FinOps around a few key themes.
1. FinOps sits at the intersection of technology strategy and business strategy
The practice of FinOps extends vertically – both up to executive-level reporting for strategic decision-making, and down to individual contributors who build and manage your technology stack – and horizontally, by enabling data-driven collaboration between technology and business teams.
Watch this section of the keynote.
2. The scope of FinOps extends beyond the public cloud
The practice of FinOps was born to address the new cost management challenges that come with the variable cost model of public cloud, and Practitioners have developed skills in dissecting, allocating, optimizing, and reporting on high volumes of complex data with deep granularity.
Given the success that FinOps teams have had with driving clarity and value for public cloud, it is not surprising that business leaders are asking if FinOps can be applied to intersecting areas of technology spending, such as SaaS, Licensing, Private Cloud, and Data Center.
To reflect this development, the FinOps Foundation’s Technical Advisory Council has approved a new element in the FinOps Framework to capture the different segments of technology cost and usage data FinOps Practitioners are managing: FinOps Scopes.
Read: The Scope of FinOps Extends Beyond Public Cloud
Watch this section of the keynote.
3. FinOps continues to “shift left,” by considering cost earlier in the product development process
Each phase of the product life cycle offers opportunities to optimize cost. Not considering realistic cost forecasts, or only considering cost after deployment, can lead to unwelcome outcomes, such as surprisingly high cloud bills, lower than acceptable product margins, and reduced options for cost optimization due to earlier design decisions.
FinOps is continuing to shift from managing cost as an operational afterthought to a key consideration in the product design process. Data-driven business conversations about what to build, which features to include, and where to build it are now happening before engineers are handed requirements to start developing. FinOps teams can estimate, monitor, and optimize the unit cost of a product or service from inception to help drive cost-aware product decisions before architecture begins.
Read: Cost-Aware Product Decisions
Watch this section of the keynote.
4. GenAI comes to FinOps, and Practitioners must apply FinOps to AI spend
FinOps for AI: We are seeing a pattern today with AI that parallels the pattern we saw with cloud a decade ago: organizations are hungry to use this new technology at any cost, which can lead to an overcorrection and tightening of spending down the road. We encourage organizations to take a measured approach, applying FinOps to AI early on to avoid this boom and bust cycle.
A key consideration for FinOps Practitioners going forward is how to apply FinOps to AI spending. The considerations may be different in different environments, but some core Capabilities always come into play: usage/workload optimization, rate optimization, and helping the business use AI to generate value (and not using AI just for AI’s sake).
AI for FinOps: This year we saw Generative AI deployed by cloud providers to help customers get valuable insights out of FinOps data:
- Google Cloud announced that Gemini Cloud Assist can now be used to generate FinOps reports, summarize key insights, and write BigQuery scripts using natural language.
- Microsoft Fabric is now integrated with Microsoft’s Generative AI Assistant, Copilot, so customers can use natural language to create dataflows and pipelines, write SQL statements, build reports, or even develop machine learning models.
- AWS announced that Amazon Q can be leveraged by developers to ask questions about cost data in natural language and receive summaries, analyze trends, and engage in dialogue about the data in Cost Explorer.
Read: Clouds announce FOCUS support and GenAI tools at FinOps X
Watch this section of the keynote.
5. FinOps and sustainability teams increase collaboration to optimize both carbon and cost
As more organizations become reliant on technology and cloud computing to deliver goods and services, the impact of data centers on the environment has become central to the sustainability conversation.
Although less than 20% of FinOps teams are currently collaborating with sustainability teams, collaboration is expected to increase significantly (State of FinOps). Additionally, a shift is anticipated in the level of collaboration; today, collaboration amounts to information sharing, but going forward, tighter collaboration with shared responsibilities is expected. Just like in FinOps, engineering teams are a critical part of sustainability efforts, as they make infrastructure decisions that drive both costs and carbon emissions.
Read: FinOps and Sustainability Teams Collaborate to Optimize Carbon
Watch this section of the keynote.
6. FinOps is increasingly a concern for stakeholders across the organization
Gone (well, almost gone) are the days of lone FinOps Practitioners pleading with engineers to make cost optimizations to their applications. Today, we are seeing FinOps become a central tenant of operations for stakeholders across the business, from leadership, to technology, and to finance. These FinOps Personas are increasingly “bought-in” to the idea of measuring the value of cloud operations, rather than focusing on cutting costs. FinOps is beginning to be as it should have been all along: fully integrated into existing business processes.
Watch this section of the keynote.
HSBC Extends FinOps Beyond Public Cloud
Last year at FinOps X in 2023, we heard Natalie Daley, Head of Cloud Economics and FinOps at HSBC, discuss incorporating private cloud and on-premises costs into their FinOps practice for public cloud costs. This year, Natalie was back to share that they have begun the journey, and that she sees two core characteristics of FinOps that can help elevate the management of on-premises costs: data treatment & granularity, and a culture of collaboration.
Watch this section of the keynote.
FOCUS 1.1 is now available
Udam Dewaraja and J.R. Storment shared an exciting update to the FinOps Open Cost and Usage Specification (FOCUS™): after months of work and deliberation, the FOCUS Steering Committee has ratified version 1.1 of the Specification. This fourth release adds new Columns and improved metadata to deepen support for billing data generated by cloud service providers, giving Practitioners the ability to do more granular, multi-vendor analysis.
The community can expect incremental releases roughly twice per year over the next several years as the Specification is expanded to support SaaS datasets and other technology cost data.
Read: FOCUS 1.1 Now Available. Adoption Continues for Practitioners and Vendors
Watch this section of the keynote.
European Parliament leverages FOCUS to unify cost data
Neven Drljević and Julian Radu shared how the European Parliament is using FOCUS to unify data from different clouds for analysis by the European Commission for the European Parliament and other European Union organizations.
Watch this section of the keynote.
FinOps Foundation Governing Board Panel Discussion
Chris Reed (Priceline), Anne Johnston (Capital One), Jimin Li (Microsoft), and John Phillips (AWS) took to the stage as members of the Governing Board to discuss the key themes above and how they are playing out in each of their organizations.
Watch this section of the keynote.
Check out the Day 2 Keynote recap!
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FinOps Foundation Perspectives
