The State of CloudOps in 2023: FinOps is still a work in progress

Effective CloudOps teams can control costs, improve security, optimize resources, and provide superior services across their cloud environments. These teams can also leverage FinOps, the cross-functional cloud financial management discipline and cultural practice that promotes visibility and collaboration to help organizations manage, optimize, and predict their cloud spend.

But how are organizations faring in their pursuit of FinOps success? Spot by NetApp partnered with Dimensional Research to answer this question and learn about the challenges that enterprises face in the cloud. The survey results were compiled into the 2023 State of CloudOps report, which examines how enterprises operate in the cloud. Participants answers questions about their operational activities, staffing and expertise, automation technologies, and FinOps practices. The report also compared data from similar studies conducted in 2022 and 2021 for trend analysis.

The 2023 State of CloudOps report revealed three key trends in enterprise cloud operations:

• Cloud operations remains a struggle for IT teams
• Automation is the key to CloudOps success
• Enterprise teams are embracing FinOps but still dealing with barriers

Following the first and second posts in our series, this final post will focus on the third finding: the trials and triumphs that organizations face on the FinOps journey.

FinOps adoption: the good, the bad, and the promising

First, the good news: nearly all (96%) of cloud decision makers believe that FinOps is an essential part of their cloud strategy. Over one-quarter of all respondents (26%) characterize FinOps as “extremely” important to the success of their company’s cloud strategy.

But now the bad news: while the vast majority of organizations recognize the importance of FinOps, they are still “crawling” or “walking” (versus “running”) towards FinOps maturity. Only 9% of respondents report that they have a mature FinOps practice. And 13% report that they don’t have any kind of FinOps practice.

However, there’s also the promising news: FinOps adoption may be progressing slowly, but it’s still a work in progress for many organizations. There are those that are just getting started developing their FinOps practice (21%) and more that have made progress with FinOps but are still working on it (30%).

FinOps challenges still plague organizations

FinOps is a highly beneficial practice that leads to greater collaboration, accountability, and governance among organizations. Yet FinOps is not a one-off project. It takes long-term focus to see success. Perhaps that’s why an overwhelming number (92%) of survey respondents report that their teams struggle with FinOps.

The top FinOps challenges for teams include:

• Reducing cloud costs (50%)
• Forecasting cloud spending (47%)
• Reducing waste and optimizing resources (44%)
• Allocating costs accurately (42%)
• Enabling automation of FinOps processes (41%)
• Driving adoption of FinOps across the organization (35%)
• Managing data and reporting (34%)
• Purchasing and optimal utilization of commitment-based discounts (30%)

“Other” responses included struggles with compliance, getting started, developing and implementing effective governance policies, managing vendor relationships, and navigating the changing landscape of cloud technology and pricing models.

Automation may be the key to success, but it’s another hurdle for teams

Challenges are not preventing companies from implementing automation of crucial FinOps processes. According to cloud stakeholders, 84% are already automating or have plans to automate key FinOps processes.

One area where automation can play a key role in reducing cloud costs is by automating the purchase of discounted cloud offerings (e.g., reserved instances, spot instances, Savings Plans, etc.). However, just 19% of respondents said that they’re using these discounted purchase options “very effectively to drive significant savings.” The majority, 59%, said they believe they could further reduce costs with those options if they possessed more expertise.

Surprisingly, 12% aren’t taking advantage of RIs, spot instances, and other options at all. The use of these purchase options is a key component of a FinOps practice, and paying on-demand pricing only makes it near impossible for an organization to achieve FinOps maturity.

What’s also interesting is that in the question on FinOps challenges, optimal usage of commitment-based discounts ranked last. Considering that data point with the above graph, it suggests that companies simultaneously struggle with implementing discounted offerings and de-prioritize them in favor of tackling more pressing FinOps issues.

Learn more about how teams can overcome FinOps challenges

The 2023 State of CloudOps report is based on an online survey of 310 IT decision makers in the United States responsible for public cloud infrastructure investments. All participants work for companies that have invested significantly in public infrastructure clouds (IaaS) and have more than 500 employees.

The full report covers everything we’ve highlighted in our three-part blog series around challenges, automation, containers, FinOps, and more. Get an interactive sneak peek at the report’s findings and download your copy today.