FinOps Sees a Rapid Growth In Cloud Spend Adoption Amid Challenges

The current state of cloud financial management, FinOps is peculiar. It is sprinting while tackling hurdles.

FinOps, cloud financial management, is a combination of systems, best practices, and culture to increase organizations' understanding of their cloud costs and analyze how organizations can accommodate their cloud budgets while making the best choices for the business on the line of speed, cost, and quality.

The FinOps Foundation surveyed 804 practitioners from all over the world who had a collective $45 billion as their cloud spends. Half of those companies had more than 10,000 employees which implies that these big companies are key for FinOps growing adoption. According to reports, while FinOps is a popular choice, companies are having a hard time with containing and optimizing their cloud spends. FinOps Report 2021 shows that FinOps is now a necessity and has become mainstream for all budgets while also becoming a career path for most. This led to FinOps team size growing 75% in the last 12 months and expert 50% more growth next year.

Out of the 804 practitioners that were surveyed, 49% of them had little or no automation of managing cloud spend. Automation of cloud spend is one of the key disciplines of a FinOps practice. Out of those with some automation, 31% automated notifications, 29% automated tagging hygiene, 13% automated rightsizing, and 9% spot use. This states that most companies are missing changing to optimize cloud spends.

According to FinOps, their biggest challenge was convincing engineers to act on cost optimization, followed by dealing with shared costs, and accurate forecasting spends. Only 15% of the practitioners said they were in the "run" phase of maturity where they can improve a built-out processor where 44% are in the "crawl" phase.

Research shows that the more complex the company is, the greater their need for FinOps is. Still, only a few businesses have adopted this practice. FinOps found out that their practices are being used in different roles by companies that have adopted them. 43% are cloud financial management focused, 26% are IT and engineering or DevOps, 11% are executives, and 8% are cloud management solution vendor staff, 3% are in finance, and less than 1% are in procurement.

What Challenges Do FinOps Teams Face?

FinOps asked the respondents what common challenges they have been facing. 39% responded they find it difficult to get engineers to take action, 26% have difficulty in accurately forecasting cloud spends, 23% find it tough to fully allocate costs, 22% are unable to align their finance to tech teams, 33% say dealing with shared costs is challenging, 24% find reducing waste or unused resources difficult, 11% said container costs and 7% are finding non-laaS costs like SaaS challenging.

The analysis gives a picture that the top needs required by FinOps practitioners are making a roadmap for the need of FinOps capabilities in a company, benchmarking and KPI data to understand what great performance looks like, and making a platform or a tooling landscape to know what vendors solve which challenges.