97 Things Every Cloud Engineer Should Know

Chapter 68. FinOps: How Cloud Finance Management Can Save Your Cloud Program from Extinction

Deepak Ramchandani Vensi

Transformation Director at Contino

Time and again we see organizations run into some pretty big cloud finance headaches:¹

• Cloud spending is much higher than expected.

• The cost benefit can’t be seen from the datacenter lift-and-shift.

• Too much is spent on licenses and services that the organization doesn’t have control over.

But the problem is not the cloud; it’s the cloud consumption model! The organization’s financial approach to consuming the cloud is inherently flawed.

The cloud has fundamentally shifted the way organizations purchase technology. But while organizations dedicate a lot of time and attention to transforming familiar disciplines such as engineering, security, governance, and operations to operate in a cloud-first world, their finance and procurement functions are still geared for consumption of traditional on-premises IT.

This causes a host of issues. A few common ones include the following:

• Inability to manage the shift from capital expenditures (CapEx) and operating expenditures (OpEx)

• Inability to easily forecast tech spending

• Inability to control the self-service cloud consumption model

How can finance and procurement adapt to the new world of the cloud? Enter FinOps.

What Is FinOps?

FinOps is an approach to managing and operating ...