Our thoughts on the future of digital innovation and the cloud.
The FinOps Foundation recently released their 5th annual State of FinOps report. This year, there were 861 respondents, representing organizations who total a combined $69 billion annually on cloud spend.
The top priority for FinOps Practitioners this year was the same as the 2024 report, workload optimization and waste reduction. This was a priority for 50% of the practitioner respondents, indicating that organizations are still looking for ways to save on their cloud spend. The next top priorities are allocation of cloud spend and accurate forecasting.
The ranking of the future priorities for the next 12 months shows some shifting in priorities over the current ones. Governance and policy at scale has moved into the top spot, and as the report notes, this is likely due to the need for increased governance and policy rigor in a FinOps practice as it matures to continue to see cost optimizations. Workload optimizations and waste reduction is still in the number two spot, and very much still a priority for almost a third of all respondents. The next two answers, managing costs beyond public cloud and getting to unit economics both increased five positions over last year, also good indicators of the overall maturing of internal FinOps practices in the respondent organizations. Enabling automation and managing AI/ML spend, while both further down, are the other two answers that moved up four positions each this past year.
Other interesting highlights from the report include:
- FinOps Practitioners think that organizational alignment and executive sponsorship is what they will need most to be successful, with investing in tools came in as close second.
- When asked about plans to increase efforts by the different FinOps domains, practitioners are planning to increase efforts or remain constant in 20 of 22 domains, while plans to reduce efforts would only be expected in 1.5 domains on average.
- Scopes of management within FinOps practices is also increasing, with 2/3rds planning to incorporate managing SaaS applications, almost half will include licensing and 39% will incorporate private cloud.
- Over half of respondents will adopt FOCUS into their data ingestion, but many expect limitations such as time constraints and skill levels to introduce challenges to their adoption plans.
- While rolling AI costs into FinOps to manage is top of mind for many practitioners, sustainability plans have remained mostly unchanged and an area of very low focus for many.
- Collaboration between intersecting disciplines across teams as well as within integrated teams was compared against the responses in 2023, and there have been increases in the collaboration in almost all areas. Sustainability collaboration within integrated teams is the only category where there was a reduction in the remaining an outlier in this response as well.
These responses indicate some very positive trends in the maturity levels of FinOps practices among the members of the FinOps Foundation. Priorities shifting from a pure cost saving focus to more process and governance related focus as well as the expectation that more areas of cloud spend would be brought under the purview of the FinOps practice both are excellent indicators that current FinOps practices have already experienced cost optimizations in a satisfactory way and are now moving on to the next phase of FinOps management. Simply put, the “low hanging fruit” opportunities to save on costs have already been achieved and now more complex priorities are coming to the forefront of the cloud cost management teams.
While organizational alignment was still identified as the most important thing that needs to be in place to achieve success in FinOps, this answer did decrease in the percentage of respondents that felt this was still an outstanding requirement for them over last year, and tooling increased to come in a close second on that answer. This indicates that executives are seeing the value in their organization’s adoption of FinOps and now practitioners are investigating third party tools to enable continued maturity.
Considering adopting a practice internally for your organization? Give the Invero team a call for some information on how to get started.
Content has been shared or adapted from the State of FinOps by FinOps Foundation with permission from the FinOps Foundation under a Creative Commons Attribution 4.0 International License following Attribution 4.0 International (CC BY 4.0).
