Top 7 FinOps trends for 2023 cloud admirers best not to bypass

Organizations have recently moved their infrastructures to the cloud. It's the right choice considering cloud benefits for business. So, what is the problem? Companies must deal with cloud bills that might need to look more optimistic. Cloud costs increase every year! Let me share my thoughts on cloud cost optimization methodology capable of handling this particular pain, aka FinOps. And here, we will discuss FinOps trends, covering the main FinOps directions we should focus on in 2023.

Given cloud service usage becomes uncontrollable, managing the cost of cloud utilization, in other words, FinOps, becomes essential. FinOps includes various disciplines and business processes such as data-driven analytics, cloud engineering, cloud automation, financial operations, and operational reengineering, performing in a single, seamless, and interactive flow.

FinOps: Take cloud costs under control

The State of FinOps 2021 report states that despite organizations recognizing cloud cost growth as a cloud challenge, only 15% of organizations have mature cloud cost management. At the same time, in 2022, many enterprises plan to implement FinOps and cloud cost management for cloud and multi-cloud platforms.

Source: finops.org

While organizations used local infrastructures before the cloud, getting new resources was time-consuming but quite straightforward. For example, if you needed more capacities for your data center, you went to the financial department of your organization, and they purchased them for you. Of course, this model wasn't perfect, but the budget was under control, and the teams knew who was responsible for the process. With the appearance of cloud computing, everything changed.

IT experts encouraged leveraging cloud technologies as they deliver numerous benefits to the business. At the same time, organizations started to experience problems: every DevOps could request more capacities, and resource consumption got out of control. In most cases, organizations cannot track how much money they spend effectively. As a result, we needed to add financial awareness to cloud management. FinOps means cloud cost optimization, and nowadays, a FinOps engineer or a FinOps team is a critical element of IT organizations. A FinOps manager is a principal job role while not abrogating the responsibility of each IT organization team member for cloud cost allocation.

FinOps trends 2023

1. Cooperation rocks, but the expert team drives FinOps

Public cloud admirers are well aware – cloud management takes lots of blood, sweat, and tears. Moreover, with increasing cloud leveraging, handling costs becomes a piece of hard work. Most companies cope with this challenge by implementing a dedicated FinOps team to manage cloud costs, which is a great decision, considering the FinOps team is the cement that holds FinOps initiatives together. Them being an overarching role, FinOps practitioners help various departments with aspects of FinOps that cannot be centralized: management with reporting, business with quantity management, procurement with negotiation data entry, finance with reconciliation and chargebacks, and IT with cost strategy.

2. Cloud spending is an overall concern.

FinOps teams are responsible for FinOps – an axiom requiring no proof. However, FinOps does not begin and end with a single person or team. Those who succeed with FinOps effectively eliminate silos and bridge key teams together. Leadership, finance, operations, development, and more stakeholders and individual experts have roles to play. A FinOps-led organization has several teams collaborating, and in the process, they all benefit.

For example, development teams can innovate faster and make smarter, data-driven decisions about the balance between speed, quality, and cost. With FinOps, everyone takes responsibility for using the cloud. Cross-functional teams work together to better manage cloud providers and rates. Ultimately, instead of creating conflict, friction is reduced to establish smooth alignment with business objectives.

3. Cloud observability and 24x7 reporting are must-haves.

Organizations may underestimate the effort required to implement high-end cloud observability – gaining accurate insights from the state of your system when moving to the cloud. Cloud data is a complex process, with things becoming more tangled in multi-cloud infrastructures, which may well include many teams and individuals. So it is far beyond critical to understand what goes on inside the infrastructure to effectively control and manage cloud processes.

FinOps pros and every other cloud budget careful experts address observability challenges to sophisticated cloud platforms that are supposed to:

• Give you an overview of the entire infrastructure.
• Continuously monitor resources in multi-account and multi-cloud environments.
• Provide insights and AI-powered recommendations to help quickly detect issues before they affect businesses
• Detect security vulnerabilities
• Quickly generate data reports and architectural diagrams for financial and security compliance auditing.

4. Resource tagging strategy and tagging policy guidelines are vital.

Assigning metadata to the cloud resources as tags, simple labels consisting of customer-defined keys, and a value that makes it easier to manage cloud resources is a magnificent and frequently underestimated practice. Companies of any size face the challenge of having a centralized framework to enforce consistent tagging on cloud resources and creating/leveraging Tag Policies to help teams standardize tags across resources in cloud architecture. Adopting operational platforms that enable automated tagging is an excellent solution to address this dare. Automatically created tags allow experts to implement a cost-monitoring mechanism for efficient governance strategies to streamline operational processes and group resources for increased visibility and effective cost management.

5. Best cloud-saving models are mandatory.

FinOps strategy should be carefully planned based on analytical data of cloud ecosystems. But here, it will be helpful to provide information about effective ways to optimize cloud costs, which can become effective steps of any custom FinOps strategy.

For FinOps to work, you need:

• Detect and get rid of the waste (unattached snapshots, volumes, AMIs, Elastic IPs, etc.) that has been draining costs.
• Choose the right size for your instances. Choosing the right family, size, and type of machines that won't add to your cloud computing bills is no easy task, especially without a solution that provides timely cloud size recommendations.
• Establish an optimal schedule for the machines. Scheduling automatic start/stop for cloud resources implemented in data-driven hibernation policies is one of the simplest yet highly effective solutions for saving cloud costs.
• Adopt an effective spot management strategy. Confidently converting even business-critical machines to spots requires a perfectly designed spot instance management strategy.
• Reserve resources or/also skillfully use savings plans. Effectively planned and managed reservations can help you get significant discounts.

6. Metrics matter: Establishing FinOps KPIs.

The budget-minded cloud infrastructure holders should define cost metrics, which are mapped to business metrics, and technical or utilization metrics. FinOps KPIs differ from regular IT or DevOps KPIs. Here we propose the following 5 of them for you to progress toward bigger cloud savings.

• 5% orphaned resources level. It is quite time-consuming for engineers to dive into the cloud waste ocean, especially without excellent equipment. But you might be surprised how much you can save by handling them regularly. Just make sure the level of waste never breaks the 5% limit.
• 0% idle machines. Some instances could be running for no reason at all. Establish an optimal schedule for them, scheduling automatic start/stop hours or shutting them for good if you don’t need them.
• 90% of resources should be tagged. Having 90% of your taggable items tagged is a great milestone. Over time, you can always push that percentage higher.
• 80-90% of the resources are reserved or covered by a Saving Plan. The only exception to this 80-90% rule is if you’re able to prioritize Spot Instances above reservations, which doesn’t work for every business. But with a well-designed spot management strategy, 80-90% mode can be applied to the spot converting system.
• 90% forecast accuracy. Effective forecast accuracy avoids surprises for company executives and investors.
• 50% of automated recommendations implemented. 50% and more automated. Ideally, AI-based recommendations from mature cloud offerings, like Uniskai, will ensure that the organization can maximize value from cloud investment.

7. FinOps tooling to be fully equipped

While FinOps platforms and more “traditional” cloud cost management tools serve similar purposes, FinOps solutions typically target a different audience. Traditional cloud cost management is a reporting feature that shows an organization's cloud resources and how much those resources cost. A small proportion of management typically views these reports. Preferably, FinOps-targeted platforms are designed for members of a multidisciplinary FinOps team, with analysis and reporting tailored to finance, engineering, and other core disciplines. In addition, sophisticated FinOps platforms provide recommendations, ideally AI-based, for actionable optimization, allowing the FinOps team to improve cloud performance and reduce costs.

Final thoughts: Uniskai – an ultimate FinOps trend

Bearing in mind cloud service usage becomes uncontrollable, managing the cloud costs, in other words, FinOps, becomes crucial. In addition, 60% of CxOs plan to move more workloads to the cloud in 2023, and leveraging sophisticated cloud cost management solutions to understand and optimize cloud spending is vital.

Uniskai by Profisea Labs is an innovative and unified FinOps platform capable of handling all the most painful points felt by engineers and IT managers who face increasing pressure to cut down IT costs, but only in a way that doesn’t do any damage to business value. Uniskai helps users visualize cloud assets, maximize cloud utilization, reduce cloud waste, and lower cloud spending while pursuing business goals.