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Reasons leaders should instill FinOps and CloudOps culture in their businesses

Posted by Celene Robert

June 28, 2022

Business owners in every sector are embracing cloud computing, enabling them to offload responsibility for upgrading and fixing physical servers to someone else. Additionally, cloud data storage takes away businesses’ technical conundrum of where to store their vast amounts of data. 

End-user spending on public cloud services will exceed $482 billion in 2022, an increase of 21.7% since the year previous, according to Gartner. Meanwhile, public cloud spending is expected to surpass 45% of all business IT spending by 2026 versus less than 17% in 2021.

The cloud network comprises a variety of physical hardware, such as switches, servers and backup devices, as part of their infrastructure. In addition to leasing cloud storage space on a monthly or annual basis, companies also manage and store software licenses in the cloud. 

However, organizations that require the presence of cloud resources in multiple locations may generate enormous bills, which in turn limits cloud adoption. Enter the cultures of CloudOps and FinOps, both of which are increasingly being adopted by businesses eager to manage their spending on cloud computing.

While FinOps refers to the practice of managing cloud costs, CloudOps refers to the practice of managing the delivery and optimization of cloud operations. The goal of adopting CloudOps and FinOps culture is to build a transparent and defined process that efficiently uses the cloud and keeps cloud costs to a minimum. 

So, what is pushing businesses to prioritize FinOps and CloudOps culture? Simple: Doing so can help companies spend more strategically, improve delivery speeds and determine where to cut costs.

Core principles of FinOps

FinOps is shorthand for “cloud financial operations,” “cloud financial management'' and “cloud cost management.” It comprises a set of best practices that guides businesses and customers to manage their cloud spending. 

Successful implementation of the principles of Cloud FinOps, shown below, helps businesses better match cloud expenses to their actual needs: 

1. Visibility

– Ensuring transparency on cloud spending lets stakeholders make better decisions.

2. Optimization

– Optimizing cloud expenses requires ensuring a cost-effective infrastructure.

3. Control

– Cloud usage should be monitored and controlled. 

4. Collaboration

– Ongoing collaboration between IT and management enables global teams to make more informed business decisions about cloud usage.

Talk to us about how our outsourced business services can be one-and-done solution for establishing FinOps and CloudOps culture in your business.

Roles of a FinOps team

Companies should have either a dedicated FinOps team or a specialist who works to ensure that the cloud is utilized in a financially efficient manner. The FinOps team or specialist optimizes the costs of operating on the cloud, automates the purchasing and selling of resources in real time and automates the removal or rightsizing of underutilized resources.

The FinOps team’s day-to-day cloud cost management personnel may comprise:

• A cloud practices visionary

This specialist establishes cloud usage best practices and advises staff on how to effectively use cloud services.

• Executives

Senior leaders that control how the collaboration works and regularly review results.

• Engineers

Developers, cloud architects, and other technical personnel who follow cloud best practices, calculate cloud budget and expenses, and report any irregularities.

An effective FinOps practice will align cloud usage to the business’ goals to help the firm make informed decisions. The essential responsibilities of a FinOps team are:

• Devising cloud use strategy.
• Determining and adapting a cloud budget.
• Establishing cloud usage standard practices.
• Reviewing results and improving strategy as needed.

What is CloudOps?

When developers collaborate with cloud computing services to scale IT infrastructure as required, this practice is commonly referred to as CloudOps. Businesses are adopting CloudOps in an effort to keep their applications, software solutions and infrastructure running on the cloud. CloudOps may also refer to cloud operations such as data migration, infrastructure optimization, architecture building and device management.

Why has CloudOps come to the fore? Because cloud services are changing how businesses operate. Teams managing clouds can help businesses manage unexpected traffic spikes and load fluctuations that would otherwise result in overspending of cloud resources. Planning cloud utilization initiatives and measuring the effectiveness of cloud spending can help companies reduce overall cloud computing costs and build new products and features.

Benefits of Cloud FinOps

Cloud computing is often a top contributor to the cost of goods sold for SaaS companies or businesses mostly or entirely running on the cloud. If spending on cloud infrastructure spirals out of control, it can put the company's margins at risk — affecting everything from its pricing to its valuation. 

Adopting FinOps and CloudOps culture helps businesses understand the cost of different customers and the costs to support distinctive features in the context of whether their business is growing. Thus, it makes it easy to analyze:

• Pricing of all product features and products with low margins.
• Most and least-expensive customers and which customers can afford a high renewal rate.
• Most and least-utilized part of cloud architecture by the customers.
• How cloud costs will change with an increase in the number of customers.
• Relevant business metrics, such as cost per product feature or customer.

By adopting FinOps and CloudOps culture, organizations can optimize their cloud consumption. With real-time data insights and granular reports, every cloud consumer can obtain and understand cloud usage that allows them to:

• Compare the cloud resource utilization by time.
• Identify business units that need more resources.
• Understand users' consumption patterns.
• Manage their cloud budget.
• Detect and remove unused resources.
• Adjust resource size to usage.

Want more?

Escalon provides startups and small to midsized businesses with accounting, strategic finance, CFO services, taxes and support. Talk to an expert today.


Celene Robert
Celene Robert

Celene heads up the marketing at Escalon. Passionate about helping companies grow their business, she spends her days finding new ways to bring essential business services to startups, SMBs, and growth-minded companies. Based in the PNW, she’s the proud owner of 8 pairs of Birkenstocks and a sassy, cuddly cat.

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