As the “CFO” of my family, I meticulously scanned utility bills late one night. As I looked through each line, I was confused and frustrated. I couldn’t understand the spike in costs and what was causing it. There was a confusing mix of kilowatt-hours, supply and transmission costs, and local fees. A very similar phenomenon is happening with cloud spending.
My job at IBM is to create automation solutions that help organizations solve their efficiency and observability problems in the IT industry. Cloud and hybrid cloud technologies, the foundation for today’s digital transformation, offer many benefits, from cost savings to flexibility, security, and automatic software updates. However, all benefits come with various costs that can be difficult to measure and manage.
Why is cloud spending difficult?
The difficult part about cloud spending is that it’s too complex to fully understand what your cloud costs will be. Surface-level cloud spending is very easy to track, but when you get down to things like Kubernetes workloads (how software is deployed, scaled, and managed within the cloud), AI model inference and provisioning, and cost predictions are very difficult and often prohibitive. This is not accurate because there are too many unaccounted spaces.
Some crevices are canyon-sized while others are difficult to spot. Remember, this is not even the pinnacle of cloud complexity. The situation will only get worse.
Consider this situation in the spirit of starting an AI initiative. Organizations tend to accept high associated cloud costs upfront in order to generate more revenue and profits. But that way of spending is not sustainable.
Free download: 5 tips for managing your IT budget (TechRepublic Premium)
What is FinOps and how does it help you manage your cloud spend?
Managing cloud costs is so important that the IT industry has established practices to manage them. FinOps, as it is known in the industry, is an operational framework for managing cloud costs from engineering to operations. In fact, according to Civo’s 2024 Cloud Cost Report, 60% of organizations have increased their cloud spending in the past year, with 40% saying their costs have increased by more than 25%.
As companies cut resources for efficiency and consider larger macro factors such as price increases and spending on new technologies, CFOs need more support and visibility.
How can partnering with the CIO and using automation help CFOs address cloud costs?
CIOs will help their CFO colleagues by adopting FinOps practices based on AI technologies that reduce the burden of tracking, tagging, and continuously tracking operations teams to understand how budgets are being spent, and easily provide real-time visibility and decision support. You can.
The cloud operates in real time, but is predictive and predictive in a way that improves visibility and automates resource management, observability, and cost transparency.
See also: How AI is changing the cloud security and risk equation (TechRepublic)
Automation can reduce costs by over-provisioning CPU/GPU, memory, and storage. This can help you observe application health and proactively resolve issues. Automation can also provide a holistic, detailed analysis of how your cloud costs are growing.
Collaborating with CIO colleagues and implementing automation solutions can help take the headache out of CFOs. CFOs must be able to manage budget expectations while innovating and spending to keep the business on track.
CFOs, CIOs, engineers, DevOps, and cloud/AI team leaders must work together to solve this problem. Synergies that align your business and financial results help you maximize your potential while reducing spending. A good FinOps posture means everyone has equal visibility and responsibility for their spending.
Download: Year-round IT budget template (TechRepublic Premium)
Is it worth investing in a FinOps automation solution?
yes. The additional initial cost of purchasing a FinOps automation solution will be recouped within two years. We are confident it can be completed within 12 months.
Implementing a FinOps automation solution is important. Get it done right from the start, maximize connectivity, efficiency, and collaboration, and watch your cloud spending and CFO stress disappear.
Some old financial advice has never been more prevalent than it is now. Live within your means. Bills shouldn’t surprise you or make you sweat, and CFOs shouldn’t make you pay for overspending.
Bill Lobig is responsible for IBM IT automation software product management. It includes a variety of technologies that help people and organizations optimize their technology spending and ensure the health and performance of their applications.
Bill has worked in the enterprise software space for over 25 years in a variety of engineering and product management roles spanning unstructured data/content management, information lifecycle governance, business process management, machine learning and AI, application modernization, FinOps, and IT. operate. Bill graduated summa cum laude from the University of Maryland, College Park.
