According to the Real State of FinOps study from CloudBolt Industry Insights, 98% of companies polled now have a formal FinOps team or are actively considering adding one. Yet, 76% believe they will have to wait 2-3 years to see real FinOps-driven results, and only 1 out of 500 respondents claimed to achieve any material value from FinOps to date.
"Rarely in the history of business has there ever been a new discipline that has emerged and been adopted as rapidly as FinOps," says Craig Hinkley, CEO of CloudBolt Software.
"Our study shows that 98% of companies either have a formal FinOps practice or are planning to implement one. Thats partly due to the amazing work of the FinOps Foundation. But it is also an indication of just how vitally important cloud financial management has become."
This 10th edition of CII, based on a survey of 500 executives, engineers, and developers at companies with over 5,000 employees in the US, Canada, the UK, and Australia, was conducted by Wakefield Research in May-June 2023. The data reveals that FinOps on its current trajectory remains a story of great promise, but more needs to be done to achieve true progress in taming cloud cost complexities and to realise tangible material value from FinOps frameworks and investment.
It is clear that FinOps has finally come into its own, seizing the spotlight as organisations across industries recognise its transformative potential and make it a cornerstone of their financial strategies.
FinOps goes mainstream More than 4 in 5 companies (82%) now have a formal FinOps team in place (and another 16% are actively considering adding one) but more than half of existing FinOps teams (54%) were formed 12 months ago or less. And a whopping 89% of respondents view FinOps as the silver bullet for reining in the complexity of cloud cost management. What's more, the average size of a FinOps team is now 4.1 people, with the Director-level being the senior-most leader on the team 53% of the time.
Budgets & KPIs
According to 71% of respondents, funding for FinOps (including people and technology) increased in 2023. Additionally, FinOps KPIs and metrics are now being reported to the C-Suite or Board of Directors at 58% of organisations.
FinOps elevated to strategic
According to the study, 68% of respondents highlight the importance of FinOps within their organisation's strategic priorities for 2023. Further, 71% indicate that achieving this years IT goals without a FinOps practice would pose a significant challenge. And 74% say that FinOps is now as important as traditional IT-related areas including ITOps, DevOps, SecOps, and other common disciplines.
In addition to the anticipated delay in material impact and lack of tangible FinOps-driven results to date, other concerns linger such as:
Stuck on the basics
While advanced capabilities like cost allocation, chargeback implementation, automated remediation, anomaly detection, and more are hot topics across the FinOps crowd, most respondents are still struggling to get the foundational components right. Specifically, 48% cite commitment purchases (reservations and savings plans) as their highest priority. 46% of engineers and developers people actually applying FinOps to their work still believe that basic visibility and reporting is lacking. Interestingly, executives rated that capability as their lowest priority at 36%.
It is supposed to take a village
According to the key tenets of FinOps, organisational success is the responsibility of everyone involved in Cloud. Surprisingly, only 9% of respondents saw it that way, with the majority (57%) saying ownership belonged to a designated team or a specific leader.
Despite all the enthusiasm, 45% of respondents nearly half question FinOps efficacy in the real world. Specifically, 15% flag FinOps as being theoretically easy but harder in practice, 13% regard it as much ado about nothing, 10% say it is nothing more than a suggested framework, and 7% label FinOps as a necessary evil.
"FinOps has rapidly evolved from a niche concept to a critical discipline embraced by organisations worldwide," says Kyle Campos, CTO of CloudBolt Software.
"While there are challenges to overcome, the growing adoption of FinOps teams and the increasing recognition of its strategic importance demonstrate the market need and potential," he says.
"By leveraging the right tools and fostering a culture of shared responsibility, companies can accelerate FinOps impact to the business no one can afford the risk of falling behind while waiting 2-3 years to see results.
"Entropy, waste, friction these are the default traits of an enterprise (really any organisation). The winners forcefully and decisively push against that to create virtuous cycles, efficiency, and velocity."