Got a grip on your cloud spend? The bean counters are coming for you…

Cloud spend

Techies may have enjoyed breaking silos to go cloud native, create DevOps and digitally transform their companies, but the accountants are on their way and looking to bring their cloud spend under control.

A group of cloud practitioners has banded together to create a FinOps Foundation devoted to codifying best practices for managing public cloud spending by companies, which is due to hit $360.2bn by 2022 according to Gartner figures.

The effort is the brainchild of cloud spend tracking platform Cloudability. As well as codifying best practices, the organisation will develop certifications for both the tech  and finance sides of the house. Founder members include Atlassian and Just Eat, and Cloudability cofoudner JR will be president of the foundation.

Cloudability CMO Jay Wampold said that DevOps and the urge to ship code faster had been a major driver of cloud spend: “They went around IT and were spending and most companies didn’t worry about it too much at the time because they were driving massive growth in their digital initiatives and the relative spend to IT was still fairly small.”

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But, he continued, we’re getting into a world, “Where companies are not only further investing in those digital initiatives, they’re also looking to migrate data center workloads into the cloud, and cloud spending is now material.”

Storment cited the case of one client whose spending had “crossed a threshold into nine figures a year….the CFO said whoa, the revenue line is growing slower than our cloud spend line – we need to bring those two curves back.”

This sort of situation inevitably “kicks off tension” between the finance and technology teams he said, and there was a need to break down barriers between finance and tech.

CTO Eric Onnen said that he didn’t think exerting more financial control would cramp developers, “For the most effective practitioners this becomes another set of efficiency metrics. Nobody wants to be the engineer who deploys the code that uses 2 per cent of the CPU over the month.”

But it was inevitable he said, that “Now that you have unbounded consumption potential, the engineering side of the house needs to be more cognisant of how they’re affecting the business.”

No trade group worth their salt is going to launch an industry initiative without some supporting research. Cloudability collaborated with 451 Research to probe what US and UK organisations were doing to control their cloud spend.

Amongst other things, they found that 85 per cent of respondents had overspent their cloud budgets, but while 51 per cent of finance respondents saying they’d overspent on cloud, just 37 per cent of IT people believed they had.

Most have minimal visibility into their cloud spend, with 82 per cent relying on spreadsheets, manual tracking or cloud vendors’ own tools.

Bizarrely, 73 per cent of US respondents and 81 per cent in the UK still managed their cloud spend on a capex rather than opex basis. This despite cloud vendors long touting the accounting advantages of putting IT spending on your credit card and making it an operating spend.

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