Reducing Waste and Managing Commitments Top Key Priorities for FinOps Practitioners

PR Newswire
Thursday, February 22, 2024 at 1:00pm UTC

Reducing Waste and Managing Commitments Top Key Priorities for FinOps Practitioners

PR Newswire

FinOps Foundation's Annual State of FinOps Survey Reflects Maturing FinOps Practices, Impact of Economic Pressures, Increasing Priorities of Automation and the Impact of AI/ML Costs

SAN FRANCISCO, Feb. 22, 2024 /PRNewswire/ -- The FinOps Foundation, a part of The Linux Foundation's non-profit technology consortium focused on advancing the people and practice of FinOps, today released research showing that reducing wasted cloud spend is the number one priority for FinOps practitioners in the past year. The fourth annual State of FinOps survey also found that 'ensuring executive support and organizational alignment' is seen as what is most needed to overcome that challenge.

We saw some major shifts in the data this year: for the first time in four years, the focus moved away from 'empowering engineers to take action on costs.' Now, the top priorities are reducing waste, managing commitment discounts, and improving cost forecasting.

The cost of using Artificial Intelligence, which didn't surface in previous State of FinOps surveys, is a rising concern, primarily for those spending $100M+ annually in the cloud. While some are looking to leverage AI in their practices, the immediate concern is how to manage the growing cost of AI services offered by the cloud service providers. "AI, rather than initially helping, is actually starting to negatively impact cloud bills for large spenders and is directly impacting margins due to increased spending in the cloud," said J.R. Storment, Executive Director of the FinOps Foundation. "This survey will help the Foundation better understand practitioners so we can improve education and other initiatives to help FinOps practitioners get the most value out of the cloud to drive efficient growth."

The survey included 1,245 respondents from over a thousand companies, ranging from small to massive, with an estimated combined annual cloud spend of $55 billion.* On average, the respondents spent $44 million annually on cloud initiatives.

Key survey findings include:

  • Compute spend continues to be the most optimized. Practitioners are starting to look into additional areas of spend, such as storage, databases, and containers, however there is still more room for improvement.
  • After reducing waste, managing commitment-based discounts was the No. 2 priority, cited by 43% of respondents, up from just 7% of respondents a year ago.
  • Forecasting returns high on the list of priorities for organizations, signaling a need to achieve predictability in cloud spend.
  • AI/ML is not yet impacting smaller organizations, however large spenders see it as an increasing priority.
  • Small to medium-sized companies are looking to use more automation, while large enterprises—often with more mature FinOps practices—are shifting their focus to unit economics.

The global economy is having an impact on FinOps, and cloud efficiency is clearly top-of-mind for organizations. FinOps teams are enabling companies to get the most value out of their cloud spend, driving innovation through experimentation with technologies like artificial intelligence and machine learning, but FinOps practitioners are looking for more support from the wider organization and executive team.

For more information, read the Foundation's full perspective on the State of FinOps 2024.

*Based on the middle range of reported spend

About the FinOps Foundation
The FinOps Foundation is a non-profit trade association focused on advancing the people who manage the value of cloud. It is made up of tens of thousands of FinOps practitioners, service providers and cloud technology providers including those in 48 of the Fortune 50. Grounded in real-world stories, the FinOps Foundation delivers connections to peers, certification, and open source best practices through programs like FinOps Certified Practitioner, the annual FinOps X conference, a FinOps Certified Enterprise program, and FOCUS (FinOps Open Cost & Usage Specification).

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SOURCE FinOps Foundation