The Cloud Chronicle with Elias Khnaser
Debunking FinOps: 6 Reasons Why You May Not Need It for Cloud
Cloud cost management is important, but adding FinOps into the mix might be more trouble than it's worth. Here's why.
- By Elias Khnaser
- 06/26/2023
The introduction of cloud computing in business transformed the digital landscape and fundamentally altered how organizations manage their operations. Given the dramatic increase in cloud spending, the concept of FinOps -- short for "financial operations" -- emerged to create a framework for financial governance in organizations using cloud services.
However, the assertion that every organization must adopt FinOps is not always applicable. Let's delve deeper into why organizations may not necessarily need FinOps.
Reason 1: Not Every Organization Has Significant Cloud Spend
The most apparent reason why an organization might not need FinOps is that not all businesses have extensive cloud expenses.
Smaller organizations or businesses that are not heavily tech-oriented may not use cloud computing to an extent where a specialized financial management framework is required. For these businesses, conventional financial operations are often enough to manage and monitor expenses.
Reason 2: It’s Not Fundamentally Different
Many organizations already have efficient financial management systems in place, which effectively control and monitor cloud expenses. These existing systems, often guided by years of experience and adjustments of the on-premises environment, are well capable of managing cloud costs in conjunction with other expenses. Injecting FinOps into this mix may result in unnecessary complexity, and may even disrupt well-established systems.
Reason 3: DevOps Should Own the Budget!
The responsibility for managing cloud costs should be decentralized and assigned to the application DevOps teams. By giving ownership of the budget to the teams responsible for developing and operating the applications, there is a stronger incentive for them to optimize costs and make efficient use of cloud resources. It also encourages a sense of accountability and fosters a culture of cost consciousness.
When teams have a direct stake in the financial outcome of their cloud usage, they are more likely to prioritize cost optimization efforts throughout the application's lifecycle. This ownership model also promotes a closer alignment of technical decisions with business goals, as teams are motivated to ensure that their architecture remains optimally aligned with the evolving needs of the organization.
Cost optimization in the cloud must be part of operations. Rather than treating it as a separate, centralized function, it must be regarded as a continuous and distributed effort that runs alongside the development and deployment of applications. Just as teams are responsible for ensuring the reliability, scalability and performance of their applications, they are also responsible for managing and optimizing the associated costs.
Reason 4: Overheads and Resources
FinOps requires investment -- not only in terms of money, but also time and resources. Organizations need to employ or train individuals who understand both the financial aspects and the technicalities of cloud computing. For businesses where cloud spending is not a significant part of their budget, the return on this investment may not justify the cost and effort of implementing FinOps.
Reason 5: Cloud Vendor Management Tools
Cloud vendors today often provide comprehensive tools and resources for cost management and optimization. These include budget alerts, detailed usage reports and even recommendations for cost savings. For organizations with straightforward cloud operations, these tools may be more than sufficient for managing their cloud finances.
Reason 6: The Role of Consultants and Third-Party Services
The increasing trend of outsourcing complex tasks also extends to financial cloud management. Specialist consultants and third-party services can provide targeted advice and solutions for managing cloud costs, without the need for an organization to adopt
an entirely new operational framework.
Final Thoughts
While FinOps offers a specialized framework for organizations with substantial cloud expenses, it isn't a one-size-fits-all solution. Each organization needs to assess its needs, existing systems and resources before deciding whether FinOps is the right approach. In some cases, businesses might be better off refining their existing financial management practices and using available cloud vendor tools or third-party services.
Remember, the ultimate goal is effective financial governance, and there are various paths to that destination.
About the Author
Elias Khnaser is a thought leader in the areas of cloud computing and digital disruption. Until recently, Elias was research vice president at Gartner, where he focused on private, hybrid and public cloud computing. Today, Elias continues to conduct research and advises customers and vendors on all aspects of cloud, edge and datacenter transformation strategies. Elias has written and co-authored six books, dozens of online video training courses and hundreds of articles for VirtualizationReview.com, InformationWeek and Forbes. He is a frequent keynote speaker at leading technology conferences like Gartner Catalyst, Citrix Synergy and others. Elias publishes weekly on his YouTube channel (@ekhnaser) and hosts "Let's Talk Shop with Eli," a biweekly podcast dedicated to cloud, data and analytics, and technology trends. He also publishes a monthly column, "The Cloud Chronicle with Elias Khnaser," on Redmond Magazine.