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Results from the FinOps Foundation‘s latest survey indicate that automation is increasing but manual tasks still remain, and priorities are shifting as organizations mature in their adoption of FinOps.
Now in its third year, the State of FinOps survey is run by the FinOps Foundation and designed to give insights into the industry and how organizations are adopting the practice. Since its launch in 2021 the number of respondents has grown from just over 800 participants to 1,245 this year, representing somewhere in the region of $55 billion in cloud spend. The survey has 38 questions, many of which are carried over from prior years to show how the industry is trending. So let’s dig into our takeaways and what they mean for you.
First up is the most quoted question from prior State of FinOps surveys: “What are your organization’s key priorities?” And the results were surprising.
“Empowering engineers to take action” has been the top challenge for the last three years, but with this most recent release, it is listed as sixth. Looking at the list of challenges, this could be for a few reasons.
For example, as more organizations embrace automation, they depend less on engineers having to take that action. Automated rate optimization features can remove the overhead of managing reserved instances. The optimistic perspective is that engineers are proactively taking action, implementing optimizations from the FinOps team and buying into the vision.
Momentum is building in the industry, and as organizations become more aware of FinOps, they see the benefits of effective cost management and optimization. At FinOpsX 2023, Adobe discussed how its FinOps team was able to help drive efficiencies across the organization to fund some of the development and rollout of Firefly. Their ability to demonstrate these benefits ultimately contributed to buy-in at the organization level.
The top two challenges this year are related to optimization priorities. This will come as no surprise to many. We have seen a major focus on optimization for both usage and rate optimization. The survey results show that most organizations have significant opportunities to optimize workloads outside of compute, especially through automation. We’ll get into those results in the next section.
One way to look at these two points in combination is that they represent an acceptance at industry level that optimization needs to be an organization-wide concern. With cloud spend reaching an all-time high among enterprises, it has the attention of executives and board members. The survey results validate this with 49% of respondents choosing “executive buy-in” as a top challenge for adopting FinOps.
In our experience, when cost optimization is woven into the culture of an organization from the top down, years of trying to optimize and achieving mediocre results change to almost overnight success. Typical optimization tasks, like idle instances and disconnected volumes, are now well served by automation. Teams can focus their attention higher up the value chain but need more executive buy-in to make things happen.
One of the most interesting survey questions was about how companies are building automation into their systems and processes. While most companies have implemented some level of automation, the majority use it for detection, not remediation.
What’s keeping people from full automation? Embracing automation at a strategic level often happens in multiple phases, starting with alerting. Perhaps an underappreciated step, alerting is critical because change begins with awareness. Once that awareness loop is running, we must then build trust.
Building trust is by far the hardest part of implementing widescale automation. You shouldn’t expect organizations to wholesale automate all their systems. We often recommend an interim state of “alerting with approval.” For example, a user receives an email or alert, which they can manually approve to trigger an action. Though this empowers engineers to take action, it causes delays because the job must wait for a human to click a button. This interim phase is critical to establishing trust — but only if the alerts are consistently accurate and have commensurate actions. If this is the case, engineers can be confident in their platform’s capabilities and ideally expand automation to more parts of the system without waiting on a slow human.
The average number of tools has increased from 3.7 in 2023 to 4.1 in 2024. This is a worrying trend where practitioners feel that they have to stitch together multiple tools to get the mix of features they need. Vendors that have a broad base of capabilities and the ability to invest further will deliver the simplified operational landscape practitioners need to be efficient.
Last up, one of the exciting results from the survey is that although only 19% of respondents said that sustainability was a concern for their FinOps teams in 2023, that number has increased by between 30% and 40% in 2024, with EMEA showing most interest in sustainability. One of the drivers for this is the EU Corporate Sustainability Reporting Directive (CSRD). We expect more tech providers to release GreenOps dashboards and data sets to help customers meet their reporting requirements around their emissions from public cloud usage.
Automation is the leading message from this year’s survey. Effective automation mitigates repetitive tasks and allows humans to focus on higher-value activities. But automation requires trust. FinOps practitioners are struggling to enable more advanced automation use cases due to lack of trust. Kevin Clark’s article series on The New Stack offers great insights for new leaders, including advice on building trust.
As in typical hype curves, the push toward artificial intelligence (AI) and machine learning (ML) use cases is in delivering innovative features for business with little focus on cost, but that will change as adoption grows. FinOps teams need to prepare now for the inevitable executive conversations about cost when the reality begins to sink in.
VMware Tanzu was the first Premier Vendor member of the FinOps Foundation, dating back to 2020. We’ve been paying close attention to the trends in the State of FinOps survey over the years. Having members on both the Governing Board and Technical Advisory Council of the FinOps Foundation, Tanzu Cloud Health’s roadmap is leading many of these trends. Where gaps exist, we will pay close attention to our customers’ needs and to the results of industry surveys like the State of FinOps.
Read the full State of FinOps 2024 report and learn about CloudHealth’s latest innovations.
