Published on October 30, 2023- Cloud transformation plays a pivotal role in driving innovation and digitalization in today’s technological landscape. The shift from legacy IT infrastructure (such as data centers) to cloud-based services is imperative for organizations aiming to foster agility, innovation, and speed in achieving business objectives. Cloud service providers (CSP) tout key differentiators such as agility, innovation, and time-to-value as key drivers to accelerate digital transformation projects.
The public cloud is increasingly becoming the preferred platform for hosting data analytics–related projects, including business intelligence, machine learning, and AI applications. However, many organizations find the “move to cloud” to be a turbulent flight due to challenges such as lack of resources/expertise, security concerns, and cloud cost management issues.
The decentralized resource provisioning approach inherent in cloud solutions presents a challenge in governing the costs of on-demand resource allocation/utilization. The cloud also requires a paradigm shift from traditional cost management and procurement methods, favoring operating expenses (OpEx) over capital expenditure (CapEx).
The pay-as-you-go model of cloud services enables organizations to accelerate innovation and digital transformation projects while providing a wide range of resources and services on demand. However, managing cloud costs effectively is a significant challenge. The Flexera 2023 survey indicates that 82 percent of enterprises and SMBs struggle with cost management during their cloud journey.
In response to these challenges, the FinOps framework has emerged as a strategic approach to optimize cloud investments and maximize return on investment. FinOps promotes cross-functional collaboration between technology, finance, and operations to align cloud spend with business objectives and improve the procurement process with cloud providers, negotiating better discount rates and plans.
As organizations seek agility and innovation, cloud computing enables the rapid prototyping and launch of products and services, reducing time to market. However, it also presents governance challenges, leading to under-estimated cloud requirements and the waste of cloud resources. The traditional “lift and shift” approach is not cost-effective for cloud architectures, as highlighted in the Oomnitza report, where more than half of surveyed companies admitted to wasting at least 10 percent of their cloud budget on underutilized, unmanaged, and unattended cloud resources.
FinOps, as a cloud management discipline, breaks down silos between technology, business, and finance to improve cloud unit economics. It emphasizes transparency, real-time consumption data, and reports to facilitate informed decisions and improve financial forecasting and planning for cloud transformation.
Cloudera’s cloud-native platform, CDP, offers capabilities that align with the FinOps journey, enabling organizations to improve their cloud investments and avoid cloud overruns. These capabilities include providing visibility into workload spending, offering consumption reports, resource tagging, cloud spending optimization, Cloudera Observability tools, and chargeback features to track workload resource costs.
In conclusion, FinOps serves as a transformative framework for organizations to maximize their cloud investments and achieve financial accountability in their cloud transformation journey. By leveraging the FinOps approach and Cloudera’s capabilities, organizations can navigate the complexities of cloud cost management and ensure efficient cloud infrastructure usage.