FinOps is more than just a buzzword—it’s a necessary strategic practice that unites technology, finance, and business teams to ensure that every dollar spent on cloud services delivers maximum value. As cloud computing becomes increasingly integral to business operations, balancing cost with performance and scalability is challenging. FinOps best practices provide the framework to achieve this balance, turning cloud expenditures into strategic investments that drive tangible business outcomes.

This guide explores essential FinOps best practices, helping your organization manage cloud costs effectively and align cloud spending with your business objectives for long-term success and improved cloud ROI.

Top FinOps Best Practices to Maximize Cloud ROI

It’s essential to follow FinOps best practices to manage and optimize cloud costs effectively. These practices can guide your organization toward maximizing cloud ROI and ensuring that every dollar spent on cloud services delivers substantial value.


1. Achieve Cloud Cost Visibility


Visibility into cloud costs is the foundation of FinOps best practices. Without it, managing cloud expenses effectively is impossible. A multi-faceted approach that combines granular monitoring, tagging strategies, and advanced reporting capabilities provides comprehensive transparency and supports informed decision-making.


2. Optimize Cloud Commitments


Optimizing cloud commitments is critical to reducing costs without sacrificing performance. You can significantly lower your cloud spend by strategically using long-term commitment options and leveraging discounted pricing models.


3. Continuous Rightsizing


Rightsizing is a FinOps best practice that aligns cloud resources with actual usage needs, avoiding overspending and under-provisioning.


4. Implement Cost Governance and Accountability


Cost governance is a critical FinOps best practice for controlling cloud expenses across the organization and ensuring that every dollar spent contributes to business value.


5. Automate and Schedule Non-Production Environments


Non-production environments like Dev, Test, and QA often run continuously, leading to unnecessary costs. Automating their management is a FinOps best practice that can yield significant savings.


6. Conduct Regular Well-Architected Reviews

The AWS Well-Architected Framework offers a structured approach to evaluating and optimizing your cloud architecture. Regular reviews are essential for maintaining cost efficiency and aligning your cloud environment with best practices.

Understanding The FinOps Lifecycle

The FinOps lifecycle, as outlined by the FinOps Foundation, is at the heart of effective cloud financial management. It’s an iterative process that involves continuously refining strategies and workflows across three key phases: Inform, Optimize, and Operate. Each phase is crucial in helping organizations manage their cloud costs more effectively, aligning cloud spending with business objectives and driving maximum value.

1. Inform Phase: Gaining Insight and Visibility

The Inform phase focuses on building a clear and accurate picture of your cloud usage and costs. It’s about turning raw data into actionable insights that empower teams across the organization to make informed decisions that enhance overall cloud strategy.

2. Optimize Phase: Enhancing Efficiency and Reducing Costs

After gaining insights and visibility in the Inform phase, the next step is to translate this understanding into actionable strategies during the Optimize phase. The Optimize phase is about identifying and implementing strategies to improve cloud efficiency and reduce costs without compromising performance or scalability.

3. Operate Phase: Ensuring Continuous Improvement

The Operate phase integrates FinOps into your organization’s culture and daily operations. It operationalizes insights and optimizations from previous phases to continuously refine cloud financial management practices.

Common Challenges in Implementing FinOps Best Practices

Implementing FinOps best practices is a journey that involves overcoming several challenges, especially in large and complex organizations. By understanding these challenges and applying thoughtful solutions, your organization can successfully integrate FinOps practices and realize the full benefits of optimized cloud financial management.

1. Siloed Teams

2. Lack of Visibility

3. Resistance to Change

Elevate Your FinOps Strategy with CloudBolt

Leveraging a robust platform is crucial to successfully implementing FinOps best practices and achieving maximum ROI. CloudBolt’s comprehensive financial management platform offers a range of capabilities designed to support each phase of the FinOps lifecycle:

Conclusion

Mastering FinOps best practices is essential for organizations looking to optimize cloud costs while driving innovation and performance. By focusing on visibility, accountability, automation, and continuous improvement, your FinOps strategy can transform cloud spending into a strategic investment that fuels business growth.

By adopting these practices, leveraging emerging trends, and utilizing CloudBolt’s comprehensive platform, your organization can ensure that its cloud investments are not just cost-effective but also aligned with long-term business goals. If you’re ready to elevate your FinOps strategy and achieve maximum ROI, consider exploring how CloudBolt can enhance your cloud financial management. Contact us today for a personalized demo and see how CloudBolt can transform your cloud operations.

Cloud cost management is a critical aspect of modern IT operations. Understanding and controlling these costs is crucial as organizations increasingly rely on cloud services. With global cloud spending projected to reach $805 billion in 2024 and expected to double by 2028, implementing effective strategies like showback vs chargeback is essential for maintaining financial control and optimizing resource use. This article will help you understand these differences and choose the right approach for your organization, particularly within FinOps.

Understanding IT Showback

What is Showback?

Showback is a less stringent cost allocation method that provides visibility into IT resource usage without direct billing. It generates reports that show the costs associated with each department’s activities, promoting transparency without financial enforcement. In the context of showback vs chargeback, showback is foundational in maturing your organization’s cost management strategy. Using showback, organizations build departments’ awareness and understanding of cloud costs. This prepares teams for a potential transition to chargeback, where financial accountability is introduced based on the cost insights gained during the showback phase.

Benefits of Showback

Challenges of Showback

Understanding IT Chargeback

What is Chargeback?

Chargeback is a method where individual business units or departments are billed for their specific consumption of IT resources. This allocation ensures each department is financially accountable for its usage. Understanding showback vs. chargeback is crucial, as chargeback is often the next logical step after implementing showback. Organizations use showback to build transparency and awareness of cloud costs. Once departments clearly understand their resource usage and its financial implications through showback, they are better prepared to transition to chargeback, where they are held financially responsible for their consumption.

Benefits of Chargeback

Challenges of Chargeback

Showback vs Chargeback: Key Differences and Similarities

When considering showback vs chargeback, it’s essential to understand how they compare in various aspects:

AspectChargebackShowback
DefinitionBilling mechanism charging departments for usage.Reporting mechanism showing departments their costs.
PurposeTo ensure departments pay for what they use.To promote transparency without financial penalties.
AudienceFinance or accounting personnel.IT or departmental managers.
TimingPost-consumption with detailed reconciliation.Real-time or near real-time visibility.
GranularityHighly detailed and granular data.Less granular, often averages costs.
Cost AttributionAssigns specific costs based on usage.Provides overall cost information without billing.
FlexibilityFormal approach with strict accountability.Informal, focusing on awareness and planning.

Step-by-Step Guide to Implementing Showback and Chargeback

Successfully implementing showback and chargeback in your organization requires a thoughtful and structured approach. Below is a detailed guide to help you navigate each stage of the process.

Implementing Showback

  1. Set Up Tracking Mechanisms
    The first step in implementing showback is establishing accurate and comprehensive tracking mechanisms. This involves integrating tools to monitor and record cloud resource usage across all departments. By tagging resources and setting up detailed logging systems, you ensure that every instance of resource consumption is captured. Engaging with your IT team to configure these tracking systems properly is crucial, ensuring they align with your organization’s specific needs. The accuracy of these tracking mechanisms will directly influence the effectiveness of your showback process.
  2. Generate and Distribute Reports
    Once tracking mechanisms are in place, the next step is to generate showback reports that detail the costs associated with each department’s resource usage. These reports should break down costs by project, team, or any other relevant category, providing clear and actionable insights. It’s essential to ensure that these reports are user-friendly, with visualizations and summaries that make complex data more accessible. Regularly distributing these reports—weekly, monthly, or quarterly—helps maintain transparency and keeps departments informed about cloud expenditures.
  3. Educate Departments
    A critical component of a successful showback implementation is educating departments on interpreting and using the data provided in their reports. Hold workshops or training sessions where you walk through the reports, explain critical metrics, and demonstrate how to use the insights for decision-making. This education phase is essential for building a culture of cost awareness and ensuring that all departments understand the implications of their resource usage. Empowering departments with the knowledge to manage their cloud costs lays the groundwork for a more cost-efficient organization.
  4. Encourage Cost Awareness
    With departments now equipped to understand their showback reports, the focus should shift to fostering a culture of cost awareness. Encourage departments to regularly review their cloud spending and consider the financial impact of their resource consumption. This can be done through periodic meetings, where teams discuss their showback reports and brainstorm cost-saving strategies. Making cost awareness a regular part of departmental discussions promotes responsible resource usage and sets the stage for more efficient cloud cost management.

Transitioning from Showback to Chargeback

  1. Evaluate Readiness
    Transitioning from showback to chargeback is a significant step, and assessing whether your organization is ready for this change is essential. Begin by evaluating how well departments have adapted to the showback process. Are they actively engaging with their reports? Do they understand their resource usage and its financial implications? If departments consistently use showback data to optimize their spending, this is a strong indicator that they are ready to take on the financial responsibilities associated with chargeback. This readiness assessment should also include evaluating your financial systems to ensure they can handle the complexities of chargeback billing.
  2. Introduce Cost Allocation Models
    As you prepare to transition to chargeback, introducing cost allocation models is a crucial step. These models should be carefully designed to reflect the true cost of resource usage while ensuring fairness and transparency. Start by selecting or customizing a cost allocation model that aligns with your organizational structure and financial goals. This model might allocate costs based on direct usage or incorporate additional factors such as infrastructure overhead or support costs. Once a model is chosen, gradually introduce it to the departments, explaining how costs will be allocated and billed. This gradual introduction helps departments adjust to the new financial responsibilities without feeling overwhelmed.
  3. Integrate with Financial Systems
    The next step in transitioning to chargeback is to ensure that your chosen cost allocation model seamlessly integrates with your organization’s financial systems. This integration is critical for accurate billing and financial reconciliation. Work closely with your finance and IT teams to set up automated processes that pull usage data directly from your cloud monitoring tools into your financial systems. These automated processes reduce the risk of errors and streamline the chargeback process, making it easier for departments to manage their budgets. Additionally, all stakeholders should be trained to use the integrated systems to track and manage charges effectively.
  4. Monitor and Adjust
    After implementing chargeback, it’s essential to continuously monitor the system’s effectiveness and prepare to make adjustments as needed. Regularly review the accuracy of cost allocations, the timeliness of billing, and the overall impact on departmental behavior. Are departments managing their budgets more effectively? Has there been a reduction in unnecessary cloud spending? Use these insights to fine-tune your chargeback model, making it more precise and responsive to the evolving needs of your organization. Maintaining flexibility during this phase ensures that your chargeback implementation remains fair, accurate, and beneficial to all parties involved.

Implementing Chargeback

  1. Establish Clear Communication Channels
    Successful chargeback implementation hinges on clear and consistent communication between IT, finance, and departmental leaders. From the outset, it’s essential to establish communication channels that facilitate regular discussions about cost allocation, billing processes, and financial accountability. This communication should be top-down and involve feedback loops where departments can voice concerns or seek clarification. By fostering open dialogue, you can prevent misunderstandings and ensure that everyone is on the same page regarding the objectives and processes of chargeback.
  2. Set Up Reconciliation Processes
    Chargeback inherently involves financial transactions, making regular reconciliation processes essential. Establish procedures for reconciling departmental charges against actual usage to ensure accurate and fair billing. This might involve monthly or quarterly financial reviews, where discrepancies are identified and corrected. Involving finance teams in these reconciliation processes helps maintain financial integrity and builds department trust. Accurate reconciliation also prevents conflicts and reduces the risk of economic disputes.
  3. Update Cost Allocation Models
    Over time, your cost allocation models may need to be updated to reflect changes in resource usage patterns, organizational structure, or financial priorities. Regularly review these models to ensure they remain aligned with the goals of your chargeback strategy. Updating cost allocation models might involve adjusting how costs are distributed across departments, incorporating new services into the billing structure, or refining the metrics used for cost calculations. Keeping your models up-to-date ensures that your chargeback system remains relevant and continues to drive the desired financial outcomes.
  4. Manage Departmental Reactions
    As departments adjust to the financial responsibilities introduced by chargeback, it’s natural that some resistance or concerns may arise. Proactively managing these reactions is vital to a smooth implementation. Hold meetings to address any issues, provide additional training where needed, and ensure that departments understand the long-term benefits of chargeback, such as increased cost control and more strategic resource use. By providing support and addressing concerns, you can help departments navigate the transition and embrace the accountability that chargeback brings.

How CloudBolt Powers Showback vs. Chargeback

Effectively managing cloud costs requires the right tools that provide transparency and empower organizations to take action. CloudBolt is a comprehensive solution that offers robust capabilities that streamline showback and chargeback processes. By leveraging CloudBolt’s advanced features, organizations can gain deeper insights into cloud usage, automate cost allocations, and drive accountability across departments. Whether your organization is just beginning its FinOps journey with showback or is ready to transition to a chargeback model, CloudBolt provides the tools to support your strategy and maximize cloud efficiency.

Showback with CloudBolt

Chargeback with CloudBolt

By integrating these capabilities, CloudBolt empowers organizations to manage cloud costs effectively, whether utilizing showback, chargeback, or transitioning between the two. Its flexibility and powerful features ensure your cost management strategy aligns with your organizational goals and scales with your needs.

Conclusion

Both showback and chargeback offer unique benefits and challenges. By understanding these differences and aligning them with your organizational goals, you can make an informed decision and implement the most effective strategy.

CloudBolt’s powerful tools and features can significantly enhance your organization’s ability to manage and optimize cloud spending, ensuring that resources are used efficiently and responsibly. 

Ready to take control of your cloud costs? Discover how CloudBolt can transform your cost management strategy. Contact us today to schedule a demo or learn more about our platform.

Ready to Optimize Your Cloud Costs?

Transform Your Cost Management Strategy with CloudBolt

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Frequently Asked Questions (FAQ)

What is the main difference between chargeback and showback? 

Chargeback involves billing departments for their resource usage, making them financially responsible for their consumption. This contrasts with showback, which provides visibility into usage without enforcing direct charges, allowing departments to see their costs without financial consequences. The choice between these approaches depends on the organization’s maturity and goals.

How can showback reports enhance cloud cost management practices?

Showback reports offer a detailed view of resource usage, fostering greater cost awareness among departments. By regularly reviewing these reports, organizations can identify usage patterns, optimize resource allocation, and better plan their budgets. Over time, these insights help determine when it might be appropriate to introduce chargeback to enforce financial responsibility.

What tools can help implement chargeback and showback effectively? 

Tools like CloudBolt excel in managing both showback and chargeback by providing detailed visibility, automation, and integration with existing financial systems. These tools streamline the reporting and billing processes, ensuring accuracy and reducing administrative overhead. Choosing the right tool is crucial for ensuring your cost management strategy is effective and scalable.

How can organizations measure the success of their showback or chargeback implementation?

Success can be gauged by improved cost visibility, increased departmental accountability, and optimized resource usage. Metrics such as reduced cloud waste, accurate cost allocation, and timely budget adjustments indicate whether your showback vs chargeback strategy is effective. Regular reviews and adjustments help ensure the strategy meets the organization’s needs.

Why is it important to choose the correct cost management strategy? 

Selecting the appropriate cost management strategy—whether showback, chargeback, or a combination—ensures that cloud resources are used efficiently and that financial accountability is maintained. The right strategy supports organizational growth by fostering cost-conscious behavior and avoiding unnecessary spending, aligning with immediate and long-term business objectives.

As cloud computing becomes integral to modern business operations, organizations face significant challenges in managing and monitoring their cloud environments. According to Gartner, the sheer volume of spending—over $599 billion in 2023—combined with the complexity of cloud environments has escalated the need for better visibility. Moreover, the lack of cloud visibility has been linked to numerous high-profile security breaches, exposing businesses to vulnerabilities and compliance risks.

What is Cloud Visibility?

Cloud visibility refers to an organization’s ability to view its cloud infrastructure, usage, and spending comprehensively. This visibility typically involves tracking the utilization and performance of resources such as virtual machines, storage, databases, and networking components while analyzing spending patterns across services, projects, and departments to identify opportunities for cost optimization.

Cloud visibility is crucial for several reasons. IT teams can gain insights into resource utilization and application performance, security analysts can monitor potential threats, and finance teams can benefit from tracking and optimizing cloud spending. Cloud visibility bridges gaps between IT, security, and finance teams, ensuring cohesive and informed decision-making. This seamless integration enables businesses to align their technology investments with strategic goals.

Why is Cloud Visibility Hard to Achieve?

As cloud use cases evolve and software proliferates, gaining a holistic view of an organization’s entire cloud ecosystem becomes increasingly tricky. This complexity is exacerbated by sprawling cloud landscapes that generate a deluge of data in logs, metrics, and traces. Managing this data without the right tools can be overwhelming, obscuring potential security threats and performance issues.

Moreover, cloud environments are rarely uniform. Many organizations leverage a mix of public clouds (such as AWS, Google Cloud, or Microsoft Azure), private clouds, and on-premises data centers. This fragmented landscape is rugged to consolidate without a clear strategy, posing additional challenges for cloud and multi-cloud visibility.

Critical Areas of Cloud Visibility

Cloud Cost Visibility

Cloud cost visibility revolves around monitoring cloud computing expenses for more efficient resource allocation and cost optimization. This involves various cloud spending categories, such as resource usage, software licenses, data transfer fees, and SaaS procurement. However, tracking and understanding how these areas contribute to cloud spending is no easy feat. Common obstacles include:

Overcoming these challenges allows organizations to leverage more cost-effective cloud networks while boosting the capacity for scaling and proactive cost optimization. Businesses must leverage cloud cost visibility tools like CloudBolt’s platform to implement cost-saving automation, optimize software procurement, gather real-time insights, and scan billing for redundant or shadow subscriptions.

Cloud Security Visibility

Cloud security visibility focuses on security posture management, with organizations monitoring their environments to ensure watertight safety and compliance. Important security areas include user activity, resource access, network traffic, shadow IT, malware identification, unauthorized access attempts, and more. Achieving complete cloud security visibility enables proactive threat detection and security issue remediation before any significant escalation. However, organizations can encounter several obstacles:

Cloud security tools, such as Security Information and Event Management (SIEM) software, can help navigate these pitfalls by collecting, analyzing, and correlating security data. Cloud Security Posture Management (CSPM) solutions provide real-time insights and recommendations to prevent potential cyberattacks. Organizations can also implement robust Identity and Access Management (IAM) practices to control access to cloud resources and invest in organization-wide security training.

Cloud Access Visibility

Cloud access visibility shifts focus to understanding and monitoring how users interact with cloud resources. Organizations must track user activity, access privileges, and permissions to visualize the overall access landscape. This visibility is vital for security and compliance concerns, as mistakes or rogue actors can lead to costly data breaches and lawsuits. Some of the main hurdles include:

Gathering insights into cloud access visibility is essential for enhanced security and cost optimization. By leveraging IAM solutions to centralize user provisioning, access control, and permission management, businesses can monitor user activity to identify suspicious behavior and implement strong password policies.

How to Improve Cloud Visibility: A Comprehensive Checklist

Enhancing cloud visibility is a continuous journey. Here’s a comprehensive checklist to help you enhance your cloud visibility:

1. Develop a Comprehensive Asset Inventory: Catalog all cloud resources, including virtual machines, databases, storage, and network components.

2. Continuous Monitoring and Reporting: Implement real-time monitoring tools for continuous insights into cloud resources.

3. Embrace Automation: Automation reduces human error and improves operational efficiency.

4. Adopt a Multi-layered Security Approach: Utilize advanced security tools and practices to safeguard data.

5. Integrate with Existing Systems: Align visibility tools with current infrastructure for seamless data flow.

6. Conduct Continuous Risk Analysis: Proactively manage risks with automated analysis solutions.

7. Implement Data and Network Segmentation: Segmentation enhances security and optimizes resource allocation.

8. Leverage Cloud Orchestration Tools: Use orchestration tools to optimize cloud operations.

9. Encourage Cross-functional Collaboration: Align IT, finance, and operations teams for cohesive visibility efforts.

10. Regularly Review and Update Strategies: Adapt visibility strategies to align with changing environments and technologies.

Implementing these strategies can give you greater control over your cloud environments, improve efficiency, and drive business success.

Types of Cloud Visibility Tools

There are several types of cloud visibility tools, each offering unique features and benefits:

1. General-purpose Cloud Visibility Tools

These tools, such as AWS CloudWatch and Google Cloud’s operations suite, provide a high-level overview of cloud environments. They track data from infrastructure, data centers, and SaaS resources, offering a starting point for building complex visibility solutions. However, these tools often lack detailed context for specific issues and typically work only within a single cloud provider.

2. Use Case-specific Visibility Tools

These tools focus on specific areas, providing more detailed insights:

3. Customizable Tools

These tools allow organizations to tailor their functionality based on specific needs, such as integrating with on-premises systems or focusing on particular cloud providers. Customizable tools offer tailored solutions and flexible integration, which can be beneficial but may incur higher costs and complexity in customization.

The right toolset is critical for achieving the visibility required to support informed decision-making. The right tools empower organizations to align technical operations with financial goals, optimizing cloud investments.

Conclusion

Cloud visibility is critical for modern organizations seeking to optimize their cloud environments. CloudBolt’s financial management platform not only enhances visibility across your cloud assets but also integrates cost management, automation, and orchestration tools, making it easier for your teams to manage and optimize cloud spending successfully. Contact us today to learn how CloudBolt can help you streamline your cloud operations and drive greater efficiency.

Frequently Asked Questions (FAQ)

What is the cloud visibility scale?

The cloud visibility scale typically refers to a framework or set of metrics used to assess the visibility of cloud environments. It encompasses various dimensions, such as the extent of monitoring, the clarity of data on resource utilization, and the effectiveness of security measures. This scale helps organizations determine how well they can observe and manage their cloud infrastructure, ensuring optimal performance, cost management, and security.

What is code-to-cloud visibility?

Code-to-cloud visibility refers to the ability to trace and monitor the code journey from development through deployment into the cloud environment. This visibility ensures that organizations can track how code changes impact cloud resources, performance, and security. It plays a crucial role in DevOps and continuous integration/continuous deployment (CI/CD) processes, enabling teams to detect issues early and optimize resource usage throughout the entire software development lifecycle.

What type of cloud reduces visibility?

Cloud deployment models, particularly public clouds, can reduce visibility due to the shared infrastructure and lack of control over underlying hardware and networks. In contrast, private or hybrid clouds, where organizations maintain more control, can offer greater visibility. Additionally, multi-cloud environments can complicate visibility due to the fragmented nature of managing multiple providers. Tools like CloudBolt can help mitigate these challenges by providing integrated visibility across various cloud types.

Broadcom’s acquisition of VMware in December 2023 has led to a huge upheaval in the virtualization and cloud market landscape, leaving many VMware customers and partners feeling abandoned, disillusioned, and downright outraged.  

Just scroll through the r/vmware subreddit and you’ll find post after post of complaints about the Broadcom acquisition and its negative impact on everyday VMware users.  

Below are five standout Reddit posts that perfectly illustrate the disruption and chaos that IT leaders are experiencing in the VMware acquisition aftermath.    

1. The never-ending renewal nightmare 
Broadcom screenshot 1

This Redditor sums up the growing frustration among VMware customers since Broadcom took over. They detail the bewildering experience of receiving a perpetual renewal quote from Broadcom, only to have it backtracked without providing a new subscription quote. They are left in a state of limbo, without support, and bracing for an exponential price hike. These conditions can swallow smaller businesses whole, prompting many loyal customers to consider other options. This user’s experience is just one of many examples of how Broadcom’s approach is turning a once-reliable service into a source of frustration and uncertainty. 

2. Short-term gains, long-term losses
Broadcom screenshot 2

This Redditor describes a call with a customer who is facing significant challenges with Broadcom’s acquisition of VMware. The customer, previously happy with his annual renewal rate of $160K, now faces a forced migration to Term SKUs which costs an eye-popping $1.6 million—a 900% increase! Not being to use features such as Core Disable or Intel SST-Profiles only adds insult to injury. While Broadcom might see quick financial gains with this approach, they are resolutely driving away loyal customers, which may lead to significant long-term losses.  

3. Astronomical cost increase
Broadcom complaint 3

While Broadcom has its eye on generating more revenue from Fortune 500 companies, smaller companies are losing massive revenue if they stick with Broadcom. This Redditor says their 5-year costs are set to jump from $2.5 million to a jaw-dropping $138 million. This is another case that shows Broadcom’s aggressive pricing model is unsustainable for many customers, driving them towards cheaper alternatives. 

4. Mid-training layoffs
Broadcom complaint 4

As if the changes in product and pricing aren’t enough, one Redditor reports an obstruction to their VMware courses due to instructor layoffs. The complaint zeroes in on the fact that the course had yet to be completed when this happened, and the instructors were left to their own devices to finish (literally). These decisions show a lack of consideration for both customers and employees, leading to significant disruption and a loss of trust. The user’s empathy for the affected instructors and criticism of Broadcom’s actions is likely a sentiment shared by many.  

5. Higher education hit hard
Broadcom complaint 5

Finally, another Redditor highlights the severe financial impact Broadcom’s new pricing model is having on higher education institutions. They detail a staggering price increase, with the cost of their VMware infrastructure soaring from $17K to $470K for a three-year subscription—over a 1000% hike for the same hardware and licensing. In a sector like higher education where budgets are often tight, this gives them no choice but to find the nearest exit.  

These posts are just a glimpse into the larger sentiment among VMware customers surrounding Broadcom’s acquisition. For a more comprehensive view, check out our latest CloudBolt Industry Insights Reality Report: VMware Acquisition Aftermath, which reveals data from 300 IT decision-makers on what they are planning to do next. 

CII Reality Report: VMware Acquisition Aftermath

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It’s an exciting time to be in the Cloud Cost Management and Optimization space. The landscape is quickly changing as the needs of today’s complex multi-cloud environments continue to evolve and more innovation is required for enterprises to fully realize the potential of their cloud environments. It’s more critical than ever to future-proof your organization with solutions designed to grow with your needs. 

That’s why we’re thrilled to be named a Strong Performer—ranking among the top three vendors in the strategy category—by Forrester Research in their latest “The Forrester Wave™: Cloud Cost Management and Optimization Solutions, Q3 2024” report. This placement solidifies for us our forward-thinking approach and distinguishes us from first-generation vendors. 

In other words, CloudBolt’s Augmented FinOps platform is primed for the future. From its vision to its product roadmap, our solution is building towards what’s next in the CCMO space rather than what’s immediate and short-lived. If you’re a cloud leader looking to future-proof your strategy and maximize long-term cloud ROI, look no further: the future is here and it’s with CloudBolt. 

Click here to access the full Forrester report and learn more about our innovative capabilities and approach. 

By the time J.R. Storment finished his opening keynote, “The Future of FinOps,” at FinOps X 2024 in San Diego, it was clear that FinOps had made significant progress even within the last year. As he exclaimed on stage, while nine out of ten Fortune 100 companies had a FinOps practice last year, nine out of ten Fortune 100 companies are actually in attendance this year. In other words, most top companies are active participants in the FinOps community.  

Similarly, while Google and Microsoft both showed support for the conference last year, there was a deafening absence from Amazon Web Services, leaving many members feeling unsettled. Today, Amazon Web Services, Google, and Microsoft shared a stage on the “Cloud Panel – VPs from AWS, Google, and Microsoft” keynote. Oh, how times have changed. 

However, despite these massive strides in the FinOps community, there’s no denying the subtle tension in the air. Simply sit in any breakout session, no matter the topic—and there are plenty to choose from—and you’ll find yourself addressing the same root problem: how to create a culture of FinOps at your organization.  

“Yes, hearing ideas from conferences like these is great,” said Smarsh Senior FinOps Engineer Deana Solis in the “Adopting FinOps: Advanced Tips & Tactics” panel moderated by CloudBolt Chief Technology Officer Kyle Campos, “but how do you meet stakeholders at your company where they are?” Judging from the laughs and sighs of recognition in the room, this is a reality attendees know all too well.  

Another clear theme that emerged from Day 1 of FinOps X is that no matter where you are on the maturity scale, FinOps is continually iterative. Elly Rauch, manager of cloud FinOps at The Walt Disney Company, referred to this in her “Burn Down the Past – Forecasting at Disney” keynote as “burn it down” moments, where you essentially throw away old methods that worked to a certain point and start over from scratch to continue making progress. She had her moment early on in her FinOps career, but is willing to strike a match in an instant if needed.  

This relentless adaptability and willingness towards change is at the heart of FinOps. As Tammy Burnitt, senior IT manager of FinOps and network services capacity management at Shell, said as another panelist for “Adopting FinOps: Advanced Tips & Tactics,” “You’re going to do this many many many times.” “This,” in this case, is evangelizing to naysayers every step of the way in your FinOps journey. No matter if you’re in the crawl, walk, or run stage (though the FinOps Foundation is quick to remind us where we all fall with large “There are no runners” banners plastered down the conference halls), every FinOps practitioner must be willing to start fresh with a new persona.  

Lastly, FOCUS (FinOps Open Cost and Usage Specification), a unifying format for cloud bills created by FinOps Practitioners, cloud software vendors, and cloud IaaS providers, made a big splash on the main stage today, which had rippling effects on many sessions thereafter. The FinOps Foundation proudly announced that the General Availability of FOCUS Version 1.0 is ready for adoption. This is big news for FinOps practitioners who want to spend less time on data ingestion and normalization, and more on strategic analysis—i.e., everyone. 

All in all, it was a jam-packed day of education and networking at FinOps X. Storment kicked off the day emphasizing that this conference is our “home” where we don’t have to explain what FinOps is to anyone. We’re all in the know. Or, as Eric Mulartrick, FinOps lead at Boomi and third panelist at “Adopting FinOps: Advanced Tips & Tactics” said with a familial sense of safety, “There’s a lot of weird people like us here.”  

To another day with weird people tomorrow!  

“We’d love to have you join our team,” he said. Eeks! I screamed in my head. You did it, Joanne! 

I happily accepted the role on the spot, hung up the phone, and this time really screamed.  

One week later, I started my first day as the senior content marketing manager at CloudBolt. 

Now don’t take my giddy excitement for inexperience—this is by no means my first rodeo. I’ve done content marketing at tech companies for quite some time now (10 years, to be exact) and have managed topics such as digital transformation, cloud computing, and AI across multiple industries. I can write technical articles, produce in-depth webinar series, and interview thought leaders like the best of them. 

There’s just one problem: I don’t know anything about FinOps. 

The Meaning of FinOps 

When I first heard the term “FinOps,” I naturally assumed it was short for “financial operations,” which entails managing financial transactions, budgeting, and accounting within an organization. I then considered the word “fintech” and thought perhaps it was related to financial technology innovations like digital payments or blockchain. But to my surprise, FinOps is nothing of the sort. The name is actually a portmanteau (or what I’d like to say, a mashup) of “Finance” and “DevOps.” But DevOps is a common methodology for software development—what does that have to do with finance?   

To get to the bottom of my confusion, I visited the FinOps Foundation for its official definition, which reads as follows: “FinOps is an operational framework and cultural practice which maximizes the business value of cloud, enables timely data-driven decision making, and creates financial accountability through collaboration between engineering, finance, and business teams.” The definition also accompanied a comprehensive framework including principles, personas, domains, and capabilities. Before me was an entirely untapped universe—and oh, was I diving in. 

A few days later—with multiple moments coming up for air—I think I finally understand. Rather than simply managing money, FinOps is about making money. It’s taking a strategic and agile approach to cloud spend and making real-time proactive decisions that produce the highest return on investment for the business. With this approach, the cloud functions as less of a cost center that keeps the rest of the business running and more of a profit center that directly pours more money into the business so it not only runs but grows. What do you think—am I on the right track? 

Learning from the Best at FinOps X 

Luckily for me, my education journey isn’t stopping any time soon. In fact, I’ll be getting a 2-day crash course when I make a pit stop at FinOps X, an annual conference hosted by the FinOps Foundation, in San Diego from June 19 to 22. Along with end-user practitioners, subject matter experts, and thought leaders, I’ll be soaking in the real-world FinOps stories and best practices from companies leading the way in innovation.  

Here is my list of top sessions that I want to attend: 

And of course, I’m not going to miss the panel that our chief technology officer Kyle Campos is hosting on Thursday, June 20, Adopting FinOps: Advanced Tips & Tactics. 

While I might be joining the party a little late, I’m glad to be here at a time when FinOps is evolving before our eyes. There’s still much to do in this space and learn from one another. I’ll be furiously taking notes at FinOps X, but if you see me, be sure to tap me on the shoulder and say hi! I’d love to meet you, hear your story about journeying into FinOps, and have you be part of mine.  

Imagine this: A cost anomaly is detected in your environment. You receive an automatic alert that the appropriate team has been notified to take immediate action. In just a matter of minutes, the issue is resolved, and AI and machine learning begin ingesting the data and further training the system. You sit back, take a sip of coffee, and dive into more strategic work. 

Pretty cool, right? This vision represents an ideal future of FinOps automation—where company culture, operations, and technology are so aligned that insight-to-action occurs in minutes, sometimes even seconds! 

As it stands today, however, the insight-to-action process can take weeks or months. That’s because the current state of FinOps automations is more like a series of episodic human activities than true continuous automation. FinOps practitioners still use spreadsheets or disparate tools to manually pull and aggregate data from various cloud providers, reconcile discrepancies, and analyze costs. Each step, from identifying cost-saving opportunities to implementing optimizations, is interrupted by approvals, reviews, and coordination among multiple stakeholders. This fragmented approach is extremely time-consuming and prone to inaccuracies.  

Traditional FinOps Automation 

To further illustrate this, consider the typical FinOps workflow broken down into four main steps: Acknowledge, Assign, Approval, and Action.  

Each of these steps introduces pauses and waiting periods, creating a disjointed, stop-and-go process that significantly delays the implementation of cost-saving measures. 

The Right, Shift-Left, Approach 

So how do companies overcome the roadblocks they’re facing in FinOps automation? The answer is clearly not to offload work to FinOps or DevOps teams themselves, which only adds to the unrealistic burden of managing an ever-growing complexity of cloud environments manually. Instead, it is shifting resolution left to advanced technology solutions that are designed to be the force multipliers to achieve the scale, accuracy, and automation required to truly solve advanced cloud cost problems such as waste reduction, chargeback/show back, unit economics, and optimized workload recommendations at the point of provisioning. 

CloudBolt’s Augmented FinOps solution is designed to address these challenges head-on by transforming episodic FinOps automation into a continuous, efficient, and impactful process. With our new capabilities, CloudBolt customers can leverage the following:  

Continuous Automation with Augmented FinOps 

To revisit the FinOps workflow illustration from earlier, here’s how the process looks like now with CloudBolt’s Augmented FinOps in action: 

At scale, these automated steps result in enormous savings and waste reduction, moving from simply sporadic gains to an ongoing, cumulative pile of benefits.  

While we may not yet be soaking in FinOps’s perfected state of automation, CloudBolt’s Augmented FinOps moves us one step closer to the collective vision. By drastically reducing insight-to-action lead time, eliminating manual toil, and enhancing collaboration, our new service advisor experience empowers organizations to maximize their cloud ROI and achieve seamless, efficient cloud operations.  

To learn more about CloudBolt’s Augmented FinOps, talk to us at FinOps X or visit cloudbolt.io/demo today. 

Since Google released it to the open-source community ten years ago, Kubernetes has quickly become a cornerstone technology for orchestrating and managing software containers and microservices. According to a Cloud Native Computing Foundation (CNCF) survey, Kubernetes is used in 96% of global businesses, and its adoption rate is not slowing down. 

Despite its widespread adoption and undeniable benefits, Kubernetes poses significant challenges in resource and cost management. The inability to monitor organizational usage or optimize a cluster’s resource utilization and allocation at scale leads to a staggering amount of cloud waste—about 47% of companies’ cloud budgets, as revealed by a StormForge survey. These challenges are not just hurdles, but pressing issues that demand immediate attention.

CloudBolt solutions are used by FinOps teams worldwide that strive to maximize the value of their cloud investments. Through our extensive interactions with these teams, we’ve witnessed the intricate complexities and critical challenges of managing costs within Kubernetes environments—challenges that conventional tools struggle to address effectively.

Recognizing the need for a transformative solution, we formed a technical partnership with StormForge earlier this year. By combining StormForge’s intelligent machine learning capabilities with CloudBolt’s Augmented FinOps offerings, this collaboration offers a powerful solution that enables users to manage Kubernetes resources with precision and autonomy. 

Understanding Traditional Kubernetes Resource Management

At its core, Kubernetes utilizes a set of mechanisms to control how a cluster allocates and consumes resources. A big part of this system is the concepts of CPU and memory ‘requests’ and ‘limits,’ which allow users to isolate container resources. Requests guarantee that a container gets a certain amount of resources, helping Kubernetes schedule pods effectively across nodes. Limits prevent a container from consuming more than its fair share of a resource, which can affect other containers running on the same node.

Despite its potential, Kubernetes often falls short in efficiency largely due to the complexity of managing resource requests and limits. Here, we explore three common approaches to Kubernetes resource management, each with its own set of drawbacks, highlighting the need for a more intelligent, automated solution.

  1. Non-specification of requests

While most developers know that CPU and memory requests exist in Kubernetes, many are unaware of how to set them carefully or why it is crucial. Instead, they usually focus on simply getting their applications running. This approach leads to an entire host of performance and reliability problems such as unstable environments where applications do not receive the resources they need, causing crashes or slowdowns during peak loads.

  1. One-size-fits-all approach

Organizations that experience the problems resulting from the first approach will then adopt a one-size-fits-all approach, which simplifies management in the short term but causes significant inefficiencies in the long term. Such an approach fails to consider the unique requirements of different applications or workloads. Developers, whose primary concern is the performance of their applications, tend to request more compute and memory than necessary which can quickly lead to significant overspending.

  1. Manual tuning of workloads

Finally, organizations that understand the need to set appropriate values for each cluster will tune their Kubernetes workloads manually. Doing so, however, requires a large amount of engineering time and resources to individually assess each application or service and meticulously adjust its resource needs. This process is particularly problematic at scale and must happen continuously, as resource needs change over time. It cannot be a set-it-and-forget-it solution, which makes it both time-consuming and prone to inefficiencies.

Machine Learning for Kubernetes Resource Management

StormForge and CloudBolt’s joint solution offers a new transformative approach to automating and optimizing Kubernetes resource management in real time. With its advanced machine learning, StormForge analyzes observability data and makes recommendations for container CPU and memory settings to optimize resource consumption and ensure cost efficiency and application performance.

How it works

StormForge’s solution integrates seamlessly into existing Kubernetes environments using a straightforward one-click installation process. Upon installation, a comprehensive analysis of observability data from your Kubernetes clusters begins. Here’s a step-by-step breakdown:

  1. Data Ingestion: StormForge ingests metrics from the Kubernetes cluster (kube-state-metrics and cadivsor). This includes CPU usage, memory demands, and other critical performance metrics.

  2. Analysis and Recommendations:
  1. Automatic Deployment:
apiVersion: apps/v1
kind: Deployment
Metadata:
  name: nginx-deployment
Spec:
  replicas: 3
  selector:
    matchLabels:
      app: nginx
  template:
    metadata:
      labels:
        app: nginx
    spec:
      containers:

name: nginx

        image: nginx:1.14.2
        resources:
          requests:
            cpu: 100m  # Adjusted from initial higher value
            memory: 200Mi  # Optimized based on usage analysis
          limits: 
            cpu: 200m
            memory: 400Mi
  1. Control and Customization:

Outcomes

The StormForge solution integrated into CloudBolt’s Augmented FinOps platform automates Kubernetes resource management, offering a scalable, machine learning-based approach that outperforms traditional methods in every aspect. It’s not just easy to use and continuously automatic, but also highly accurate. Customers can expect to save an average of 50% with StormForge, a significant amount considering the potential cost of Kubernetes for medium to large enterprises. As Mark Piersak, U.S. Bank vice president of container platform solutions, attests, the value of StormForge is undeniable: “The overall net savings on capacity has given us tremendous cost savings.”

Conclusion

As Kubernetes’ use continues to rise, clear cost visibility and accurate allocation control are more important than ever. StormForge and CloudBolt’s partnership ensures that Kubernetes clusters, along with the rest of the cloud, are not only clearly factored into cloud spending but optimized for maximum cloud ROI. Sign up for a demo to see the solution in action!

StormForge and CloudBolt will be at the FinOps X Conference in San Diego on June 19 to 22. Visit us at booth G8 to learn more about our solution!