As my mother’s “CFO”, I properly scanned my power expenses late one night. As I went through them, line by line, I was confused and frustrated because I didn’t realize how much money was going up and why. It was a confusing mix of watt time, supply and distribution costs, and regional costs. With sky paying, I’m seeing a trend that’s quite comparable.
My day job at IBM involves developing technology solutions to improve organizations ‘ efficiency and observability problems in the IT sector. As a basis for today’s electric change, cloud and cross cloud technologies offer many benefits, from cost savings to flexibility, security, and automated software updates, but, all the benefits come with different costs that can be difficult to measure and control.
What makes cloud spending difficult?
The difficult part about cloud spending is that it’s too hard to fully comprehend how much cloud will cost. Cost projections are extremely challenging and frequently wildly inaccurate when it comes to surface-level cloud spending because there are too many gaps not being taken into account when it gets down to things like Kubernetes workloads – how software is deployed, scaled, and managed in and across clouds – AI model inferencing and provisioning.
Some gaps are the size of canyons, and others are hard to spot. Remember, this isn’t the pinnacle of cloud complexity either, it will only worsen.
In order to launch AI initiatives, take stock of this circumstance. Organizations tend to be okay with initial high associated cloud costs to create more revenue and profit, however, that way of spending isn’t sustainable.
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What is FinOps, and how can it help manage cloud spending?
The IT industry developed a method to manage cloud costs because it is so important. FinOps, as it’s known in my industry, is an operational framework for managing cloud costs from engineering to operations. In fact, 60 % of organizations saw an increase in cloud spending this year, and 40 % of those claims saw an increase in costs of more than 25 %, according to Civo’s The Cost of Cloud Report 2024.
If you bring in the larger macro-factors of companies cutting resources for efficiency, inflationary price increases, and new technology spending, CFOs need more support and visibility.
How can using automation and working with CIOs help CFOs reduce cloud costs?
CIOs can support their CFO colleagues by adopting FinOps practices powered by AI technologies that make it easier to track, tag, and follow your operations team about how their money is being spent, giving you real-time visibility and decision support.
The cloud operates in real-time, but it can be predictable and forecasted in a way that improves visibility and automates resource management, observability, and cost transparency.
SEE: How AI Is Changing the Cloud Security and Risk Equation ( TechRepublic )
Automation can save by over-provisioning CPUs/GPUs, memory, and storage. It can assist in monitoring application health and taking proactive steps to fix bugs. Additionally, automation can provide a complete and detailed analysis of cloud cost growth.
Implementing automation solutions in collaboration with CIO peers can help a CFO get out of the hot seat. CFOs must be able to balance budget expectations with business innovation and spending goals.
CFOs, CIOs, engineers, DevOps, and cloud/A I team leads must tackle this problem together. The ability to align business and financial outcomes will allow spending to shrink while simultaneously maximizing its potential. Everyone has the same level of control over their spending, thanks to a good FinOps posture.
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Is it worthwhile to invest in a FinOps automation solution?
Yes. In less than two years, the additional cost of purchasing a FinOps automation solution will pay for itself, with the possibility that it will be implemented in a year.
It is crucial to implement a FinOps automation solution. Get it done right from the start – maximize the connectivity, efficiencies, and collaboration – and watch the cloud spending and your CFO’s stress melt away.
Never have been more popular than now to offer some dated financial advice:” Live within your means.” Bills shouldn’t surprise you or make you sweat, and CFOs shouldn’t pay the price for your overspending.
Bill Lobig is in charge of managing the IBM IT Automation Software Product Management. This includes a range of technologies that help individuals and businesses reduce their technology spending and maintain the health and performance of applications.
Bill has been in the enterprise software space for over 25 years holding various roles in engineering &, product management ranging from unstructured data/content management, information life cycle governance, business process management, machine learning &, AI, and Application Modernization, FinOps, and IT Operations. Summa Cum Laude graduated from the University of Maryland College Park, according to Bill.
