This Paper is Part 3 of a three-part series on FinOps for SaaS. Use this Paper to review FinOps best practices to apply to SaaS cost and usage data, an overview of how to adopt FOCUS™ (FinOps Open Cost and Usage Specification), and see an example letter to convince your SaaS provider to conform to the FOCUS™ Specification.
By following these best practices, you can optimize your SaaS investments, reduce costs, and ensure compliance with licensing agreements.
FinOps Open Cost and Usage Specification (FOCUS™) is an open-source specification that defines clear requirements for cloud vendors to produce consistent cost and usage datasets such as public cloud and SaaS providers. Supported by the FinOps Foundation, FOCUS™ reduces complexity for FinOps Practitioners so they can drive data-driven decision-making. This specification is designed to help organizations manage their spending more effectively by ensuring billing and usage data is collected and normalized consistently . It is especially valuable for SaaS buyers who need consistent data to optimize cost, usage, and performance across multiple software solutions.
The FOCUS™ standard offers SaaS buyers a powerful set of tools to standardize cost and usage data, enabling them to better manage, monitor, and optimize their cloud-based software investments. By adopting this standard, SaaS providers can demonstrate their commitment to transparency and empower their customers to make data-driven purchasing decisions.
For more information about the key elements of the FOCUS™ specification that are particularly useful for companies purchasing SaaS visit the FOCUS™ website.
FOCUS™ simplifies how companies view and analyze their SaaS expenditures by normalizing billing and usage data across different vendors. This is essential when working with multiple SaaS providers, as it eliminates the need for time-consuming data wrangling across diverse formats and terminologies. For example, standard columns such as BilledCost, UsageQuantity, and AmortizedCost allow businesses to measure and compare costs uniformly across services.
The standard requires detailed reporting on both actual and amortized costs, helping SaaS buyers make informed decisions based on predictable expense structures. This transparency is critical for managing large portfolios of SaaS tools, where understanding costs associated with each service allows businesses to adjust consumption and optimize budgets.
FOCUS™ supports cross-cloud and multi-vendor compatibility, offering a consistent data format that can be applied to a wide variety of analytics tools. This compatibility enables companies to track key SaaS metrics (like utilization and efficiency) more easily and create actionable insights that can drive cost-saving initiatives or justify increased investments where necessary.
With FOCUS™, companies can ingest usage data into their internal analytics systems or BI tools, allowing for real-time monitoring of SaaS consumption. This capability is crucial for optimizing SaaS usage based on current data and adjusting services before costs spiral out of control.
FOCUS™ allows companies to compare costs across different SaaS providers consistently, reducing vendor lock-in risks. By having a common specification, SaaS buyers can compare solutions not only on features but also on cost and usage efficiency, leading to better procurement decisions and the ability to negotiate contracts based on transparent cost structures.
In summary, the FOCUS™ standard offers SaaS buyers a powerful set of tools to standardize cost and usage data, enabling them to better manage, monitor, and optimize their cloud-based software investments. By adopting this standard, SaaS providers can demonstrate their commitment to transparency and empower their customers to make data-driven purchasing decisions.
See Vendors Currently Supporting FOCUS™
[Your Company Name]
[Your Address]
[City, State, Zip Code]
[Date]
[Recipient’s Name]
[Software Publisher’s Company Name]
[Address]
[City, State, Zip Code]
Dear [Recipient’s Name],
As part of our ongoing commitment to maximizing cloud financial management through the FinOps Framework, we are increasingly aligning our procurement decisions with standards that provide transparency, consistency, and actionable insights into usage and cost data. One such standard is the FinOps Open Cost and Usage Specification (FOCUS™), which enables streamlined and accurate cloud cost management across multiple platforms.
We are reaching out to request that your organization adopts and provides electronic cost and usage data in the FOCUS™ standard format for your product(s) as a requisite for our and your other customers’s future purchases. Key aspects of the FOCUS™ standard that are particularly valuable to our operations include:
By adopting FOCUS™, your organization will not only facilitate our procurement process but also positively impact all of your customers and demonstrate a commitment to transparency and interoperability, which are essential in today’s rapidly evolving cloud and SaaS environments.
We encourage you to review the FOCUS™ standard, which is already supported by major cloud providers like Microsoft, AWS, Oracle and Google Cloud, and look forward to your confirmation that your solution will comply with these specifications.
Thank you for your attention to this matter. We look forward to continuing our relationship with a shared focus on enhancing cloud financial operations.
Sincerely,
[Your Name]
[Your Position]
[Your Company Name]
[Your Contact Information]
We’d like to thank the following people for their work on this Paper:
Licensing & SaaS
