Adapting Fast in FinOps: Key Insights and Strategies from FinOps X Europe 2024

Last week’s FinOpsX Europe 2024 brought together the brightest minds and innovators in the field of cloud cost optimization. As FinOps continues to expand its influence, the conference offered a deep dive into the latest trends, challenges, and opportunities facing businesses today. Here’s a look at some of the key themes and insights that emerged from this pivotal gathering.

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FinOps Is Shifting Left

The concept of “FinOps shifting left” is transforming how organizations approach cloud spending by embedding cost awareness and management from the very inception of software development. Rather than treating cost as a later-stage operational concern, modern FinOps practices ensure that it becomes a critical factor during initial product design discussions.  

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At its essence, shifting FinOps left focuses on integrating financial considerations as fundamental design parameters. This involves collaboration between leadership, finance, product, and engineering teams to establish cost requirements, set realistic profitability targets, and maintain a continuous feedback loop for cost monitoring and optimization.  

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Cost-Driven Design: A New Paradigm

Historically, costs were often an afterthought, addressed only when products reached deployment and unexpected bills surfaced. This reactive mindset led to cost overruns, inefficient architectures, and limited opportunities for optimization. By incorporating cost considerations during the product design phase, organizations can set and validate realistic cost and value parameters upfront. Such foresight may even lead to halting projects that fail to meet cost-effectiveness criteria, saving substantial time, money, and effort down the line.

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Proactive FinOps practices mean embedding cost requirements at every stage:

• Product Design: Establishing clear cost and value metrics early, supported by detailed cost/benefit analyses, ensures alignment between business objectives and infrastructure decisions. This is where cross-functional collaboration sets the foundation for successful and cost-effective products.

• Build Phase: Engineers and architects must align with the “design-to-cost/value” principle, making trade-offs that balance cost, quality, and speed. Leveraging cost optimization frameworks like those provided by major cloud vendors ensures best practices are followed during the build.

• Operate Phase: Continuous cost monitoring and adaptation are essential. Real-time governance, tagging strategies, anomaly detection and forecasting enable teams to identify cost drivers, optimize resources, and maintain a culture of cost-awareness throughout the product life cycle.

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GreenOps is Gaining Traction

The rise of GreenOps, integrating environmental impact metrics into FinOps practices, was a major highlight at FinOpsX Europe. Both enterprises and major vendors like IBM are adding carbon footprint KPIs to their dashboards, it’s clear that sustainability will soon become a standard component of IT management.

While many hyperscalers (large cloud providers) still lack comprehensive carbon data, the market is moving toward sustainability-driven FinOps practices, offering companies a chance to assess and reduce their environmental impact alongside cost considerations. GreenOps offers powerful incentives, not only by minimizing carbon emissions but also by aligning businesses with emerging regulations and growing consumer demand for climate-conscious practices.

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The Expansion of the FinOps scope to SaaS and beyond

FinOps’ influence is no longer confined to traditional public cloud spending. As SaaS usage is predicted to make up over 40% of global cloud spend in 2024, expanding the scope of FinOps to manage SaaS costs has become essential. Companies like Priceline have already centralized SaaS cost data, improving cost visibility, accountability, and decision-making.

This broadening of FinOps scope is no accident; it responds to the distributed procurement and variable cost nature of SaaS. The FinOps Foundation recently expanded its framework to reflect this reality, emphasizing the need for new capabilities to manage technology costs holistically. This shift enables organizations to achieve a comprehensive understanding of their technology spending and optimize unit economics across SaaS, data centers, private clouds, and more.

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Conclusion

The evolution of FinOps is both exciting and challenging. Shifting left, embracing sustainability with GreenOps, and expanding to encompass SaaS management represent pivotal steps in this journey. At Tangent Works, we’re committed to navigating this new terrain and helping organizations leverage these trends to maximize their cloud investments as FinOps and GreenOps are not about saving money, but rather about leveraging the full potential of the cloud to make more money whilst lowering the carbon footprint of our new digital world.

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Article by Sam Verdonck, Chief Growth Officer at Tangent Works

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