Why Your FinOps Efforts Are Failing

If you follow this blog, you know that my focus is on using my cloud architectural skills, informed by FinOps principles, to analyze, understand and educate about the sources of cloud costs – specifically on the Azure platform but the concepts apply to any public cloud.

Because of the writing, speaking and video creation I do on this topic, colleagues in various firms (some I know personally, others who’re parasocials) share their stories about their organizations’ cost management and optimization efforts. After several years, I’ve begun to notice common themes and, to be blunt, a thread of failure.

Let’s dive into why.

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One.) You’re treating cost management as an engineering or ops function alone

Colleagues are reporting to me that when they try to put a cost management plan in place – or even a full FinOps practice – there is an emphasis on technical skill. Of course, understanding a platform is essential to knowing where optimization opportunities can be found but this is only one part of the puzzle, as shown in this graphic from the FinOps Foundation:

You can be a serverless hero or have completely mastered Kubernetes (if such a thing is possible) but those accomplishments alone will have zero impact on your effectiveness when it comes to cost optimization.

Two.) You Don’t Use Cost Observability Tools and If You Do, They Aren’t Available to Everyone

Whether you use one of the available cost observability tools (such as PowerBoard) or cloud platform native cost management UIs, (for ex. the Azure Cost Management Interface) it’s critical to build observability – the act of constantly monitoring costs, distributing the task of monitoring across teams and using these observations to forecast spending – into your practice. I’m not seeing this in organizations and my colleagues, after some honest conversation, admit they aren’t doing it.

Three.) You Don’t Tie Cloud Cost to Business Outcome

For most organizations, there’s a large (and growing) line item – the cloud bill – which creates headaches and uncomfortable conversations with Finance. These conversations happen because you aren’t tagging cloud assets for business insight but also because there’s a larger disconnect between the consumption of cloud technologies and the business reasons for that consumption. It’s one thing to know you spent 1 million Euros on a cloud database and another to know that database is part of a customer-facing platform which generated 10 million Euros in revenue.

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Conclusion

Your cloud cost optimization efforts are failing. You know it, I know it, we’re just not willing to say it aloud. These efforts are failing because although everyone is talking about FinOps, fewer are actually pursuing it and building a practice. Cloud is treated as an extension of older IT patterns; as an engineering task or after-thought. It is possible to do better: the first step is acknowledging the failure and adapting to the requirements for creating an effective cloud cost management workflow.

You should:

• Admit there’s a problem
• Don’t expect that the methods that got you into the situation can be used to solve it (adding more ops and dev people to cost management is a FinOps anti-pattern)
• Expand your understanding of the role of cloud technology from tech alone to a holistic view of business solutions directly tied to outcomes
• Tag your cloud assets for business insight
• Get serious about observability

And while you’re here, let’s review the basic principles of FinOps by viewing this video I created last year: