As cloud adoption rises, so does cloud “sticker shock.” That tremendous savings seen from the switch to up-front CapEx investments in information technology to subscription mode soon gets soured as the rising monthly bills come in for services nobody knows where and when they are being used.

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Photo: Joe McKendrick

If you feel your organization is behind the curve with automating even the most routine parts of cloud, and cloud spending is an unseen disaster waiting to happen, don’t feel so bad — even the most informed financial experts are still trying to figure these things out. 

We’re talking about those who are part of a rising new discipline called “FinOps” — the practice of monitoring, measuring and mitigating the costs and value delivered from cloud. The perspectives of FinOps practitioners (yes, they are out there) provide a good look at understanding what lies ahead in cloud. Here, we see automation is still a struggle to fully attain, and cloud spending a big question mark.

These are the findings of the FinOps Foundation, a non-profit trade association focused on codifying and promoting cloud financial management best practices and standards, detailed in a recent survey of more than 800 FinOps practitioners from around the world with a collective $45 billion in annual cloud spend. “The dirty little secret of cloud spend is that the bill never really goes down,” says J.R. Storment, executive director of the FinOps Foundation. 

The results show massive adoption of public cloud spend, and the struggle to contain and optimize cloud spend. Nearly half of survey respondents (49%) had little or no automation of managing cloud spend. Of those with some automation, almost one-third automated notifications (31%) and tagging hygiene (29%.) Only 13% automated rightsizing and 9% spot use. This “indicates that companies are likely missing opportunities to optimize cloud spend,” the survey’s authors note.

Half of compute spend on public cloud was for on-demand, the highest-price service; and 49% for reserved, savings or committed use coverage, the next-costliest option. Only 13% was for spot use, the least expensive service, even though respondents identified 28% as being an “excellent” target for that option.

Getting engineers to act on cost optimization was cited by 40% of respondents as the biggest challenge, followed by dealing with shared costs (33%) and accurate forecasting spend (26%.)

The most oft-used tools used for managing cloud costs include AWS Cost Explorer, Cloudability (Apptio), CloudHealth (VMWare), Azure Cost Management, GCP Cost Tools, and Cloudcheckr. About half, 46%, use cloud native tooling as their primary technology, 43% use a 3rd party platform, and 11% use home grown tools or spreadsheets. At the same time, many FinOps practitioners still rely on data collection, collation, and analysis via spreadsheet. Almost all practitioners use a combination of tooling, while still relying on spreadsheets for some tasks — with forecasting being the biggest Excel use.

The survey’s authors project that significant growth is ahead for FinOps, the field of cloud financial management, as more companies accelerate their cloud plans, especially amid COVID-19, and struggle to contain and optimize cloud spend. The survey respondents predicted an over 40% growth in FinOps team size in the next 12 months. 

For the most part, FinOps is a part-time pursuit, and organizations need to buy into supporting efforts to monitor and manage cloud costs. Some challenges cited by respondents in the survey include the following:

  • Measuring real-time cost analysis between the various cloud providers.
  • Providing foundational education for engineering teams.
  • Having visualization of cloud architecture, versus cost of those parts of the infrastructure.
  • Facilitating robust tag enforcement, with easy ability to export cost and presentation to teams.
  • Enabling reporting total spend, cloud spend, service management spend and contract spend, the entire cloud spend picture.
  • Achieving container control, network and hardware integration at the scale and speed of cloud.”
  • Highlighting and fostering conversations around cloud cost management from a behavior change perspective.