Enterprises in the region can transform cloud spending from a liability into a competitive advantage through better visibility and control. How?
Cloud computing as a concept promised to transform IT from a capital-intensive burden into a nimble, scalable utility. Yet for many organizations, the reality has been a surge in spending that is now difficult to predict or control.
After a three-year pandemic, and the fulminant effects of rushed digitalization and generative AI democratization, an estimated 90% of enterprises in the Asia Pacific region (APAC), according to IDC projections, now juggle multiple public clouds, each with its own billing models, security protocols, and management challenges.
The result? Spiraling cloud costs that often outpace business growth.
What led to such a cloud liability?
Several factors contribute to runaway cloud spending:
- Decentralized purchasing: Teams can spin up resources on demand, often without oversight or coordination.
- Lack of visibility: Organizations struggle to monitor usage and spending in real time, especially across hybrid or multi-cloud environments.
- Complex billing: Cloud providers offer intricate pricing models that make it hard to forecast and allocate costs accurately.
- Overprovisioning and sprawl: Unused or underutilized resources accumulate, driving up bills.
- Reactive management: Many firms address costs only after receiving a surprising invoice, rather than proactively optimizing usage.
Introduction to enhanced FinOps
One practical framework for aligning cloud spending with business value is Financial and DevOperations (FinOps), where the DevOperations part refers to the integration of software development and IT operations to address the cost controls.
FinOps is not a product, but a set of cultural and operational practices that bring together finance, engineering, and business teams to manage cloud investments collaboratively. Gradually, AI has been enhancing FinOps by automating cost analysis, forecasting, and anomaly detection. Intelligent algorithms can sift through vast amounts of usage data, flag inefficiencies, and even recommend or enact optimizations in real time. As cloud environments grow more complex, these capabilities are becoming essential.
One critical factor in FinOps cloud cost control is to confer observability into cloud infrastructure. According toSimon Lee, Senior Vice President and Managing Director (Asia-Pacific and Japan), New Relic: “Real-time visibility into cloud usage is critical for cost control. With intelligent observability data, organizations can take a more fine-grained approach to optimizing spend while monitoring for performance impacts.”
Practical strategies for cloud leaders
To move cloud from a cost center to a competitive edge, consider these actionable steps:
- Build cross-functional FinOps teams
- Bring together finance, engineering, and business stakeholders
- Foster a culture of shared accountability for cloud spend
- Invest in visibility and observability
- Deploy tools that provide real-time insights into usage and costs
- Use observability data to identify waste and performance bottlenecks. According to Lee, “empowering engineers with observability lets them address performance issues earlier and estimate the cost impact of different services.
- Leverage AI and automation
- Use AI-powered analytics to detect anomalies, forecast spend, and recommend optimizations
- Automate rightsizing, scheduling, and decommissioning of cloud resources
- Establish clear policies and guardrails
- Set budgets, alerts, and approval workflows for cloud resource provisioning
- Regularly review and refine policies as usage patterns evolve
- Educate and incentivize teams
As FinOps is not the only way to tackle cloud costs, consider these complementary approaches where viable:
- Cloud cost management platforms: Verifies all users and devices before granting access.
- Third-party audits: Engage external experts to review cloud architectures, identify waste, and recommend improvements.
- Contract negotiation: Work with cloud vendors to secure better pricing, volume discounts, or reserved capacity agreements.
- Containerization and serverless: Adopt architectures that scale automatically and minimize idle resources
- Open-source tools: Explore open-source options for monitoring and cost analysis
Lee added: “The future of FinOps will be significantly shaped by advancements in AI and enhanced intelligence tools. Integrated platforms can further tailor and optimize cloud resource allocation by dynamically adjusting to real-time usage patterns and business needs. AI will play a crucial role in conversational elements through predictive analytics, offering organizations more precise forecasts and cost-saving opportunities. The ultimate aim is to maintain peak performance while managing costs effectively, ensuring that resources are utilized efficiently.”
