In a multicloud world, in which different workloads are distributed in different clouds, which at the same time coexist with a traditional on-premises infrastructure and in many cases, also with the mainframe, more and more companies are beginning to see how despite its benefits, cloud costs are difficult to control.
It is not surprising, therefore, that one of the main concerns of the financial departments of these same companies is to understand exactly whatDue to the nature of these expenses (the “whats, hows and whys”) and if possible not only measure them properly, but also contain them. To these questions, the hyper-scalars themselves have responded for some years with a term that is increasingly heard in these departments: FinOps. Theoretically, here we find a management practice that promotes the sharing of responsibility for a company’s cloud computing costs and infrastructure between the IT and DevOps teams and the finance department. And the question is…does it work?
If we ask those responsible for the Spanish company Orizon, not much. In fact, the company assures that this trend, which is prevailing especially in large organizations, is little more than a “masking to hide serious performance problems of the critical technological infrastructures that support the business.” Ángel Pineda, CEO of Orizon, comments that this trend, which is not new, has increased significantly as a result of the migration to the cloud of many organizations without their “clean” technological resources to assume “blind” digital transformation strategies. In other words: many companies that had a legacy Importantly, they have turned to the cloud more out of a “fashion” than out of a real need, which has skyrocketed their costs in exchange for few real benefits.
On the other hand, Orizon warns that cost optimization has to go beyond the company’s on-site cloud, since cost control must be global. But what’s more, as they explain, even companies that want to apply this new approach have few tools to do so, not to mention that there is no really clear methodology. This translates for Pineda into the fact that currently “less than 20% of large organizations in our country address efficient FinOps strategies consistent with an appropriate approach.”
“Integrating the financial with the technological is correct, but it does not make sense when that integration aims to tackle uncontrolled and unpredictable cost overruns, as their possible causes and origin are not known, both inside and outside the cloud.” “This means,” adds Pineda, “that FinOps does not serve to plan and optimize investments in technology according to business objectives, which would be desirable, but only as a tool to negotiate mere extra costs that, due to poor performance of the technology “At its origin, it causes a loop of recurring and growing financial deficit.”
For the company, the origin of this problem is the growing complexity of cloud infrastructures, the lack of talent necessary to manage them properly and, as a consequence, an extra cost in human capital that was not necessary in on-premises environments. And without wanting to demonize the cloud, “it has many advantages, but companies have to be clear about why they go to the cloud and if it makes sense”, at Orizon they are convinced that for many companies it has become a real “headache.” which is not easy to solve and which is causing, when possible, companies to begin to repatriate certain cargoes. And as Orizon concludes, companies assume extra costs of around 45% in their cloud migration projects, which are the result of the replication of their inefficiencies in this environment and the hidden costs of cloud services.