The FinOps landscape in 2024 is characterized by a heightened focus on cost optimization, particularly through waste reduction and management of commitment-based discounts. This shift in priorities reflects the broader macroeconomic conditions and the need for organizations to align cloud spending with business value more effectively. Additionally, the FinOps Framework has undergone significant updates to better align activities with best practices that maximize the business value of cloud, reflecting the evolving nature of cloud financial management.
Key Trends and Insights
- Increased Focus on Cost Optimization and Waste Reduction: Organizations are prioritizing the reduction of waste and the management of commitment-based discounts as top strategies for cost optimization. This shift indicates a growing awareness of the need to align cloud spending more closely with actual business value and to leverage financial mechanisms offered by cloud providers for cost savings.
- AI and ML Costs: AI and machine learning (ML) costs are becoming a significant consideration for FinOps practices, especially for organizations with large cloud expenditures. The use of GPUs for AI/ML workloads presents new challenges in cost optimization due to their expensive and continuous provisioning. FinOps practitioners are adapting their strategies to manage these costs effectively and ensure that engineering teams are utilizing the full capacity of provisioned resources.
- Sustainability as a Growing Focus Area: There is an expectation that collaboration between FinOps and sustainability teams will increase, especially in Europe/EMEA. This trend is driven by regulatory pressures and a growing emphasis on the environmental impact of IT infrastructure. Practitioners are seeking more insights and tooling to integrate sustainability considerations into FinOps practices.
- Challenges in Implementing Advanced Capabilities: Many organizations are still working to implement or improve capabilities such as anomaly detection, granular business unit forecasts, and integration with budgets. There is increased executive attention on the accuracy and adherence to these practices, highlighting the need for more sophisticated tools and strategies to manage cloud costs effectively.
- Tooling and Automation: The average number of tools used by organizations for FinOps remains stable at 4.1, encompassing native tools, FinOps platforms, homegrown tooling, and capability-specific solutions. This indicates a continued reliance on a diverse set of tools to address the multifaceted challenges of cloud cost management.
- Collaboration and Community Engagement: The FinOps Foundation, an association with over 15,000 practitioners, plays a pivotal role in shaping the FinOps practice by providing a platform for collaboration, events, community engagement, and training. The foundation's technical advisory council has updated the definition of FinOps to reflect the evolving nature of cloud financial management, removing the exclusive focus on public cloud and emphasizing the operational framework and cultural practice that maximizes business value from cloud investments.
2024 FinOps Framework Updates
The FinOps Framework has been updated to reflect the present-day practice of FinOps and to better align activities with best practices that maximize the business value of cloud. The 2024 revisions include updates to the definition of FinOps, changes to simplify the Framework organization, improvements to the Domain and Capability names, and an augmented set of Personas and Capabilities that are central to modern FinOps practices.
- Updated Definition of FinOps: The definition has been revised to emphasize the shift from a focus on cost to a focus on value, and the expansion of FinOps beyond IaaS to other variable cloud costs.
- Persona Updates: FinOps Personas have been grouped into Core Personas and Allied Personas, reinforcing the collaborative nature required in implementing the FinOps Framework.
- Domain Updates: The Framework Domains have been updated to represent the four fundamental business outcomes of practicing FinOps: Understand Cloud Usage & Cost, Quantify Business Value, Optimize Cloud Usage & Cost, and Manage the FinOps Practice.
- Capability Updates: FinOps Capabilities have been augmented to encompass all areas in which FinOps is practiced today, reflecting the evolving landscape of cloud operations and the broadening scope of FinOps.
Conclusion
Overall, the FinOps landscape in 2024 is characterized by a strategic approach to cloud cost management, with an emphasis on reducing waste, managing commitments, and integrating considerations of AI/ML costs and sustainability into FinOps practices. The FinOps Foundation remains a central figure in guiding and supporting the community through these evolving challenges. The 2024 revisions to the FinOps Framework mark a significant advancement in aligning activities with current best practices employed by the FinOps community, providing clearer guidance for building and managing FinOps practices within organizations.
For further insights and detailed analysis, feel free to visit:
1. Data.finops.org for the full report and survey results (State of FinOPs in 2024)
2. https://www.finops.org/insights/2024-finops-framework/ (Key 2024 Changes to the FinOps Framework)
