FinOps X Europe has finished and what a success! One of the hot topics discussed during the keynote was the concept of “Scopes”, which was driven by the expanding role of the FinOps team. Expectations of the FinOps team could range anywhere from visibility for more complete unit economics to optimization of licenses to renewal negotiations. And one of the clear questions was, when does it stop? Read on for more on that.
FinOps teams are taking on responsibilities beyond public cloud
One of the major announcements from FinOps X Europe was the introduction of “Scopes”. This term came out of a growing trend that FinOps teams are becoming responsible for managing spend outside of the public cloud. Statements like “Your FinOps team has been successful, can you do the same thing for SaaS?” or “We are going to live in a hybrid world, can you implement the same governance and visibility across public and private cloud?” are becoming more and more common. Responsibilities will range from optimizing SaaS licenses to calculating total cost of ownership (more on that later). With FinOps teams already short-staffed, this is going to be a challenge beyond simply expanding responsibility into new areas..
Applying Scopes to unit metrics
Although it is more work for the FinOps team (with likely no increase in headcount), expanding ownership beyond public cloud also comes with benefits. One of the clearest is the increase in accuracy when calculating unit metrics. Most organizations use 10s to 100s of SaaS applications, with many being costly. As organizations realize that not all applications are best suited for the cloud (remember when organizations would have goals of being 100% in the cloud by 2030?), spend is not only staying in the data center but may be migrated to it from the public cloud. Including this spend is critical in order to calculate many unit costs.
Where is the ownership line for FinOps teams?
To be determined! The FinOps Foundation added two scopes –SaaS and private cloud – with the expectation that additional scopes could be added in the future. While it may sound crazy today, some organizations have already begun to include labor as a scope in their unit metric calculations. Labor can range from anything including an account manager’s salary to averaging the cost of a support team to taking into account hourly wages for data center technicians.
What is the role of FOCUS in this?
FOCUS, the open-source project designed to normalize cloud data, was another hot topic. While it’s limited to cloud now, there is a growing demand to include SaaS tools. As FinOps teams take on broader responsibilities, using the same schema to integrate additional tools will simplify the process. More on FOCUS can be found here.
Organizations struggle to stay within budget
Yes, this statement is obvious. But what is not obvious is how to avoid it. During the Planning and Budgeting Chalk Talk, a few ideas were mentioned that are worth sharing:
- Phone a friend – organizations likely have different budgets across business units, and if they are heading towards exceeding their budget and know this early enough, there may be other business units that can pitch in and subsidize. If you do this though, be ready to return the favor in another way!
- “Cost Bash” – Sometimes costs will just increase unexpectedly. Similar to a bug bush, engineering teams could take off a sprint to focus on optimizing costs so that the interruption is to a minimum.
- Work with DevOps – This could be a secret weapon if going over budget. Not only can you “Shift Left” and optimize earlier in the pipeline, it may also give you access to additional resources.
Getting the right people at the table is critical
So, who should be there for FinOps discussions? Much of this is well captured in the FinOps Framework documentation and vital personas here, but one that is missing and worth thinking about is Human Resources. There is likely a correlation between changes in employee headcount and cloud spend (especially in development environments). Although engineering leadership may be aware of these changes, including Human Resources will ensure these changes are planned.
The right people are in the meeting, now what?
If the right people are at the table, it’s critical that budget progress is communicated early and often. With technology, it’s impossible to predict what advancements will be made that organizations can take advantage of to deliver more business value. One example of this is around AI. For those who haven’t heard of it, Artificial Intelligence has made a major splash in everything from generating code to predicting snow forecasts. Although powerful, it is also very costly. Organizations must be constantly re-evaluating new technologies which may justify an increase in budgets due to the increased business value.
The new CloudHealth user experience is going to be a game changer for Enterprises and MSPs
Saving the best for last! CloudHealth has been a top choice for organizations since 2012 and unsurprisingly, the FinOps market has changed since then. With the introduction of the new experience, CloudHealth has modernized for the FinOps user of tomorrow by improving multi-cloud oriented features like customizable dashboards, content sharing, and resource management. With the widest support of asset data in the FinOps market (CloudHealth offers unparalleled extensibility and API support, including collection of many asset types multiple times per day using cloud provider APIs), FinOps practitioners can use all of that metadata for evaluation. In addition to giving enterprises the flexibility to tailor CloudHealth to their organization, it also unlocks this data for MSPs to create playbooks for their customers around reporting and optimization and enable them to differentiate. The more creative and knowledgeable the MSP, the more unique the CloudHealth experience will be for their customers.
If you have any questions on any of this, or if you’re interested in a demo of the new platform, please make sure to reach out!
