CloudBolt Software, the leader in automating, optimizing, and governing hybrid-cloud, multi-tool environments for global enterprises, today released its latest research report, The Real State of FinOps. CloudBolt Industry Insights (CII) studies offer an objective and thorough examination of prevalent market trends and opportunities, helping to separate reality from the collective hope and hype. In doing so, cloud-oriented business leaders are able to gain a better understanding of the ever-changing landscape and make more informed decisions for their organizations.
“Rarely in the history of business has there ever been a new discipline that has emerged and been adopted as rapidly as FinOps,” said Craig Hinkley, CEO of CloudBolt Software. “Our study shows that 98% of companies either have a formal FinOps practice or are planning to implement one. That’s partly due to the amazing work of the FinOps Foundation. But it is also an indication of just how vitally important cloud financial management has become.”
This 10th edition of CII, based on a survey of 500 executives, engineers, and developers at companies with over 5,000 employees in the US, Canada, the UK, and Australia, was conducted by Wakefield Research in May 2023. The data reveals that FinOps on its current trajectory remains a story of great promise, but more needs to be done to achieve true progress in taming cloud cost complexities and to realize tangible material value from FinOps frameworks and investment.
It’s clear that FinOps has finally come into its own, seizing the spotlight as organizations across industries recognize its transformative potential and make it a cornerstone of their financial strategies.
FinOps goes mainstream – More than 4 in 5 companies (82%) now have a formal FinOps team in place (and another 16% are actively considering adding one) – but almost half of existing FinOps teams (44%) were formed 12 months ago or less. And a whopping 89% of respondents view FinOps as the silver bullet for reining in the complexity of cloud cost management. What's more, the average size of a FinOps team is now 4.1 people, with the “Director-level” being the senior-most leader on the team 53% of the time.
Budgets & KPIs – According to 71% of respondents, funding for FinOps (including people and technology) increased in 2023. Additionally, FinOps KPIs and metrics are now being reported to the C-Suite or Board of Directors at 58% of organizations.
FinOps elevated to strategic – According to the study, 68% of respondents highlight the importance of FinOps within their organization's strategic priorities for 2023. Further, 71% indicate that achieving this year’s IT goals without a FinOps practice would pose a significant challenge. And 74% say that FinOps is now as important as traditional IT-related areas including ITOps, DevOps, SecOps, and other common disciplines.
In addition to the anticipated delay in material impact and lack of tangible FinOps-driven results to date, other concerns linger such as:
Stuck on the basics – While advanced capabilities like cost allocation, chargeback implementation, automated remediation, anomaly detection, and more are hot topics across the FinOps crowd, most respondents are still struggling to get the foundational components right. Specifically, 48% cite commitment purchases (reservations and savings plans) as being one of their highest priorities. 46% of engineers and developers – people actually applying FinOps to their work – still believe that basic visibility and reporting is lacking. Interestingly, executives rated that capability as their lowest priority at 36%.
It’s supposed to take a village – According to the key tenets of FinOps, organizational success is the responsibility of everyone involved in Cloud. Surprisingly, only 9% of respondents saw it that way, with the majority (58%) saying ownership belonged to a designated team or a specific leader.
Still unconvinced – Despite all the enthusiasm, 45% of respondents – nearly half – question FinOps efficacy in the real world. Specifically, 15% flag FinOps as being “theoretically easy but harder in practice,” 13% regard it as “much ado about nothing,” 10% say it is “nothing more than a suggested framework,” and 7% label FinOps as “a necessary evil.”
“FinOps has rapidly evolved from a niche concept to a critical discipline embraced by organizations worldwide,” said Kyle Campos, CTO of CloudBolt Software. “While there are challenges to overcome, the growing adoption of FinOps teams and the increasing recognition of its strategic importance demonstrate the market need and potential. By leveraging the right tools and fostering a culture of shared responsibility, companies can accelerate FinOps impact to the business – no one can afford the risk of falling behind while waiting 2-3 years or more to see results. Entropy, waste, friction – these are the default traits of an enterprise (really any organization). The winners forcefully and decisively push against that to create virtuous cycles, efficiency, and velocity.”
To learn more, read the full report.
CloudBolt helps companies optimize, automate and better control hybrid cloud and multi-cloud environments. Providing industry-leading cloud financial management, automation and orchestration, and governance solutions for global enterprises and service providers alike, CloudBolt helps the organizations it serves to simplify complexity and rapidly maximize cloud value and impact. Backed by Insight Partners, CloudBolt has won numerous awards and has repeatedly been recognized as one of the fastest-growing private companies on the Deloitte Fast 500 and the Inc. 5000 lists. For more information, visit www.cloudbolt.io.