What is “FinOps” - It’s probably not what you think.
What is “FinOps” according to Microsoft:
I’ll give you a hint and it’s not “Finance and Operations”
Understand what you are saying when you reference “FinOps” across Microsoft and other cloud based ecosystems.
FinOps is an operational framework and cultural practice that enhances the business value derived from cloud technology. It promotes data-driven decision-making in a timely manner and fosters financial responsibility. It gets achieved through collaboration among engineering, finance, and business teams.
FinOps is a discipline that combines financial management principles with cloud engineering and operations to provide organizations with a better understanding of their cloud spending. It also helps them make informed decisions on how to allocate and manage their cloud costs. The goal of FinOps isn't to save money, but to maximize revenue or business value through the cloud. It helps to enable organizations to control cloud spending while maintaining the level of performance, reliability, and security needed to support their business operations.
FinOps is about people, process, and technology
- FinOps typically involves using cloud cost management tools, like Microsoft Cost Management, and best practices to:
- Analyze and track cloud spending.
- Identify cost-saving opportunities.
- Allocate costs to specific teams, projects, or products.
FinOps involves collaboration across finance, technology, and business teams to establish and enforce policies and processes that enable teams to track, analyze, and optimize cloud costs. FinOps seeks to align cloud spending with business objectives and strike a balance between cost optimization and performance so organizations can achieve their business goals without overspending on cloud resources.
The word FinOps is a blend of Finance and DevOps and is sometimes referred to as cloud cost management or cloud financial management. The main difference between FinOps and these terms is the cultural effect that expands throughout the organization. While one individual or team can "manage cost" or "optimize resources," the FinOps culture refers to a set of values, principles, and practices that permeate organizations. It helps enable them to achieve maximum business value with their cloud investment.
FinOps: The operating model for the cloud:
FinOps.Org is a non-profit organization hosted at the Linux Foundation. The foundation is dedicated to advancing people who practice the discipline of cloud cost management and optimization via best practices, education, and standards. The FinOps Foundation manages a community of practitioners around the world, including many of our valued Microsoft Cloud customers and partners. The FinOps Foundation hosts working groups and special interest groups to cover many subjects. They include:
- Cost and usage data standardization
- Containers and Kubernetes
- Sustainability based on real-world stories and expertise from the community
Really appreciate how you highlighted that FinOps is more about culture and collaboration than just cost-cutting. It’s interesting how often people confuse it with traditional finance or just cloud budgeting. I recently came across a discussion on the difference between FinOps vs CloudOps, and it made me realize how both disciplines complement each other when scaling modern teams. Your point about aligning business goals with cloud value ties right into that.
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