The promises of cloud are relatively well-known – instant, practically limitless capacity, making operations scalable with the press of a button. If your business objectives change or you need to respond to market fluctuations, you can decrease your consumption just as easily. It offers additional data protections, is simple to procure, and is geographically dispersed.
Yet there are challenges often faced when organizations look to capture the business value enabled by cloud. In a recent webinar, Apptio’s Alex Hullah joined J.R. Storment, Executive Director of the FinOps Foundation, to discuss the challenges reported in the 2021 State of FinOps Report.
The challenges encountered most frequently by cloud practitioners coalesced into three main themes – visibility, team empowerment, and applying cloud financial management, or FinOps, principles beyond public cloud spend. Their discussion made clear that the key to solving for these requires a mix of best practices, proper tooling, and cross-functional business alignment to achieve operational efficiency – and realize the “promises” – of cloud.
Challenge 1: Allocating costs for full visibility
Successful cloud financial management is dependent upon the ability to visualize your cloud cost and usage information. After all – if you can’t visualize it, how can you effectively manage it? To gain full visibility, it is critical to have the ability to categorize all public cloud spend and usage.
Cloud cost management is complicated by the fact that cloud costs are variable in nature and charged in a myriad of ways (in fact there are over 500 thousand different SKUs across the three major providers), which makes aggregating charges and understanding costs in a multi-cloud environment extremely challenging. And without that ability, it is nearly impossible to measure the effectiveness of procurement decisions, and ultimately, the value cloud brings to your organization.
That’s why organizations are turning to practices like FinOps to provide the proper foundation for managing cloud costs. In fact, a recent survey by The FinOps Foundation showed that FinOps teams grew in size by more than double over the past 12 months – and are expecting team size to double again over the next year!
The foundation of industry-accepted best practices can then be supported by the proper cloud cost management and optimization solution. The right tool can automatically normalize detailed information from the vendor billing files, provide capabilities to map spend to organizational constructs, allocate container and shared service charges, and inform sound decision-making that improves the unit economics – and increases the business value – of cloud.
Challenge 2: Empowering teams & driving accountability
Unfortunately, even with the right processes and tools in place, it takes cross-functional understanding, support, and ownership to deliver an effective cloud financial management practice. Infrastructure procurement decisions are typically dispersed across engineering and DevOps teams, so properly enabling them to take action is critical. This includes not only providing them with relevant insights and recommendations but also well understood workflows and a means to measure the ROI of actions taken. This requires integration between the FinOps and DevOps tools used every day by engineers and developers – making it seamless to action recommendations and measure realized savings.
Currently, this is the top challenge faced by FinOps teams, as highlighted by the State of FinOps report. It inspired our Apptio engineers to develop “Policy Driven Rightsizing,” a closed-loop integration with Jira Software and Jira Service Management that helps organizations manage the full lifecycle of rightsizing tasks.
Ensuring organizational alignment also requires leaders and operational teams to have access to relevant information wherever and whenever they need it. Cloud cost management and optimization solutions must have customizable reporting capabilities, with the ability to surface or hide information based on role or permissions.
Reports should be easily shared, provide up-to-date data and analytics, and maintain granularity with full data retention across any time period to fully scale accountability across an organization. Additionally, teams should work together to establish key performance indicators (KPIs) to provide a north star to decision-making that balances business objectives with infrastructure procurement decisions. Through this process, teams can agree on key tradeoffs – like when to accept higher costs to accelerate a revenue-generating activity – and readily report back on outcomes.
Challenge 3: Looking beyond IaaS
Cloud financial management is multi-faceted, and to address infrastructure as a service (IaaS) only ignores spend across key related areas. Financial management of a full cloud ecosystem must also contemplate non-IaaS spends, like software as a service (SaaS) and on-prem commitments.
The FinOps practice can be applied across each of these elements and can bring together a holistic management perspective, but it must be supported by the right solution to help teams manage across these different environments. Not a team to shy away from tough challenges, the Apptio team has been working to develop key innovations to address the various financial management needs and challenges of each of these cloud elements, and better support our customers along their cloud journey.
Late last year, we introduced Cloudability SaaS and Cloudability Shift, two new solutions that expand our cloud financial management capabilities, and enable customers to analyze, optimize, and plan investments across the entirety of their technology portfolio, regardless of service type (e.g., infrastructure, platform, or software), provider, delivery model, or deployment destination (e.g., public cloud, private cloud, or on-premises).
The challenges of cloud are continuously evolving and expanding but are far outweighed by the amazing feats teams are able to accomplish through its use. We are inspired by the stories of our customers, pioneering through unchartered territories to deliver the value of cloud into their organizations, and unlock savings to fund new initiatives. Sign up for a free trial today to see how we can help you.