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Cloud Cost Management and FinOps Will Accelerate IT Operations in 2025
Futuriom's latest report highlights the critical role of CCM and FinOps in reducing waste, optimizing resources, and managing cloud spend effectively.
Industry Perspectives
September 30, 2024
3 Min Read
Alamy
By Juliana Costa Yereb, ProsperOps
Futuriom's 2024 Cloud Market Trend Report analyzes the state of modern cloud infrastructure and presents new insights into cloud cost management (CCM) and FinOps strategies in the AI era.
According to Futuriom, 84% of qualified IT professionals expect to increase their cloud budgets in 2024. These rising expenditures are a direct result of (1) mounting complexity in hybrid cloud environments and (2) the high computational needs of resource-intensive technologies like AI and machine learning (ML).
Research from Snow Software (now Flexera) indicates that 91% of C-suite leaders cite innovation as their top priority. Meanwhile, 86% of IT leaders believe the pressure to innovate and demonstrate ROI falls on their department. In other words, IT leaders must responsibly scale their operations without drastically escalating costs. But how?
Data indicates that CCM and FinOps are becoming pivotal to solving this conundrum. In the FinOps Foundation's State of FinOps report, IT practitioners identified the following areas as key priorities for 2024:
Reducing waste or unused resources (identified by 52%).
Accurately forecasting cloud spend (47%).
Managing commitment-based discounts (41%).
Allocating full cloud spending (40.5%).
Adopting FinOps across the organization (36%).
The report details how CCM and FinOps providers have historically tackled these diverse challenges. Providers are sorted into the following categories, with leaders identified in each:
Discount, Right-Sizing, and Reserved Instance (RI) Management: These tools seek to optimize cloud service rates through automatically scaled savings plans and RI management. This automation is crucial because it lets engineers focus on other cost optimization efforts, like right-sizing idle resources. Providers to watch include ProsperOps and Zesty.
FinOps (Cost Allocation, Showback, and Chargeback): Real-time network observation that delivers alerts and visualizations to IT teams. These solutions help organizations allocate cloud costs accurately, showing the financial impact of their cloud usage. Providers to watch include ProsperOps and Ternary.
Waste Detection and Compute Optimization: Designed to identify and eliminate wasted cloud resources, this tool optimizes compute operations to ensure efficient usage. It focuses on right-sizing and optimizing compute environments, particularly in Kubernetes. Providers to watch include CAST AI and PerfectScale.
Managing Costs of Data Observability and Pipelines: Data logging and observability can curtail cloud costs — however, left unchecked, they can also significantly increase expenditures. Additionally, observability tools can be complex and often require additional time for practitioners to truly understand how to enact derived insights. These tools ease the cost management process by "observing observability." Providers to watch include Chronosphere.
Networking, Security, and Storage Impacts on Costs: Networking is a substantial element of cloud costs, but it's complex to tamp these costs. These tools aim to ease the process by offering visibility into network connectivity, data transfer, and security. Providers to watch include Aviatrix and Prosimo.
Moreover, the Futuriom report explores another recent FinOps trend: consolidation. The market is currently saturated with point solutions, which can antithetically spike cloud costs. As a result, many organizations are pursuing CCM and FinOps solutions that converge one or several of the offerings above.
To complete the 2024 report, Futuriom partnered with FinOps and CCM leaders across the industry to understand current offerings and seek guidance on industry trends. The report borrows from internal research and external findings, including statistics from the FinOps Foundation.
About the author:
Juliana Costa Yereb is Senior FinOps Specialist at ProsperOps.
About the Author
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