In the rapidly evolving world of cloud computing, managing costs efficiently has become a critical challenge for enterprises. As cloud adoption accelerates, the complexity of pricing models and the need for better financial discipline have given rise to FinOps—a practice that merges financial management with cloud operations. Hitesh Bhardwaj, Senior Vice President of Solutions and Services at Cloud4C, shares his insights on the evolution of cloud pricing models, the challenges organizations face in managing cloud costs, and the pivotal role FinOps plays in achieving financial and operational efficiency. In this interview with itVARnews, Hitesh discusses the benefits of FinOps, the importance of collaboration between finance, technology, and business teams, and the future of cloud cost management What’s your view on the evolution of pricing models of the cloud over the last few years?
Hitesh Bhardwaj: While traditionally the cloud was perceived as a technology disruptor or means to enhance IT capabilities, it would fast become a necessity for maintaining market competitiveness by 2028, per Gartner. In sync, global public cloud spending is expected to skyrocket from $679 Billion currently to over a trillion dollars by the same year.
CSPs had long anticipated the trend. Over the years, they have introduced strategic pricing shifts to ease cloud adoption, accelerate operations on the cloud, and manage expenses better. AWS introduced per-second billing back in 2017, which is now an industry norm. Spot instances and reserved instances allow access to unused compute and discounts on longer-term contracts, respectively. Cloud-native services and APIs have shifted from traditional licensing models to consumption-based pricing, measured at the milli-second level.
CSP’s cost management tools have evolved as well, often rewarding multi-cloud strategies with integrated billing for ease of enterprise usage. The advent of FinOps, augmented with AI-ML, is a revolution allowing better financial discipline, automated governance, and ROI maximization across multiple platforms with ease. I see cost management becoming seamless and more data and AI-driven in the coming years, even as cloud landscapes and architectures vastly increase in size and complexity.
What are the specific challenges organizations face while managing cloud costs? How does FinOps help as the emerging solution for managing cloud costs?
Hitesh: 94% of IT leaders in a survey claimed that their cloud costs were rising, and 82% of business executives claimed it was the biggest challenge on the cloud. The reasons are diverse. First and foremost, lack of visibility into cloud costs as businesses increasingly venture into hybrid and multi-cloud strategies to leverage best innovations. Complicated cloud pricing, regardless of recent initiatives from CSPs’ end is another roadblock; complex egress fee policies render little visibility to business users.
In addition, ineffective resource utilization balloons up cloud sprawl; an estimated 20-30% of compute being just wasted due to over-provisioning or governance issues which add to the bills. Data silos between different vendor platforms thwart one-stop visibility and impact transparency of one platform’s costs over the other. Finally, the technical skill gap; cloud ecosystems are ocean-like with tens of thousands of SKUs/services/custom parameters and it requires dedicated cloud engineers to cut through the noise.
What are the core principles of FinOps that you believe are most critical for effective cloud cost management? Hitesh: I’ve three talking points here. FinOps must not be viewed as another fancy term to spend monitoring and billing management; rather it’s a financial discipline to maximize returns on cloud and technology investments thereby contributing to business growth. Therefore, it requires establishment of a war room with experts from engineering, finance, procurement, and business teams to data-align and make collaborative decisions. Secondly, AI-ML-based governance, monitoring, and automated processes are key to reducing the manual overload in assessing billing reports, justifying spending, and gaining business impact insights to make informed decisions. Augmented FinOps is the way forward, making FinOps a proactive strategy inspired by real-time data rather than a reactive one. Thirdly, and perhaps most importantly, FinOps must be integrated with security and compliance-first strategies. Every cloud investment made must be analyzed from those angles to prevent severe repercussions, penalties, and probable market blacklists in the future.
How has implementing FinOps changed the way finance, technology, and business teams collaborate?
Hitesh: FinOps is all about people plus processes plus deep technologies. The contemporary cloud billing SOP is that the engineering team makes the infra-side decisions within a blanket IT budget and the monthly bills are routed to finance/accounting teams for execution. FinOps changes that single-way bridge prerogative into a more collaborative and organic approach involving engineering, finance, technology, and business teams. A common dashboard enriched with financial and KPI implications, workload performance, and cost impact of every cloud service investment is provided to all BUs. A FinOps COE representing all these departments regularly monitors the insights and convenes to make decisions in the best interest of the end-user experience and operational and revenue goals, ensuring financial accountability at all levels.
At Cloud4C, for instance, our proprietary SHOP platform renders a FinOps module which integrates billing and performance APIs from all the top hyperscaler cloud/other platforms as required, combined with our own intelligent observability metrics. Dedicated FinOps experts, in association with 25 Centers of Excellence, interpret those results and help customer organizations make informed decisions. We charge based on a ‘pay-as-you-save’ model that has historically ensured 100x value back on every dollar spent on FinOps services.
What are the best practices you would suggest for cloud cost management? What metrics and KPIs are most important for tracking and managing cloud costs in organizations?
Hitesh: For one, blanket cost reduction might do more harm than good in the long run. A certain feature running on an infrastructure might be too costly and hence an eye-sore from a finance perspective but it could be a popular one driving commendable indirect revenue. Only alignment with business teams can give clarity on the latter. This is a simple example of having a FinOps-driven culture. At the core, it’s a six-step process. First is scoping existing cloud resource usage and fixed IT asset costs (checking anomalies in cost patterns). The second step would be to benchmark performance and track budget management, forecasting, measuring unit costs, etc. Third, architect the dashboards for real-time decision-making with BI tools and AI/ML technologies (Budget alerts, cost optimization opportunities, periodical spend analysis, etc). Cloud rate optimization comes next involving amortized costs, discounts and saving plans, commitment-based discounts, etc. Cloud usage optimization is the immediate next step that involves right-sizing of workloads, cost avoidance, application modernization strategies, etc. Finally, organizational alignments run on top ensuring collaborative processes, multi-department alignments, policy and governance developments, etc.
How is your organization assisting clients to implement FinOps in their organizations? What specific services or expertise have you built to to help your clients maximize investment returns on cloud?
Hitesh: Cloud4C is the world’s leading application-focused multi-cloud MSP and we integrate our capabilities across cloud, digital transformation, AI innovations, cybersecurity, and compliance, as well as extensive experience from serving top government organizations and Fortune 500 companies to deliver a valuable solution for businesses. Our FinOps-as-a-Service combines an intelligent proprietary platform (Cloud4C Self Healing Operations Platform or SHOP), Gartner leader ISV solutions such as Intel Granulate and Intel Cloud Optimizer, dedicated FinOps experts, and on-demand support from 25+ technology Centers of Excellence. Our offering extends to SMBs and enterprises alike running on multiple cloud platforms, vendor ecosystems, on-prem landscapes, and so on. Our offering integrates all of them into a single source of view for landscape manageability, risk monitoring, and ROI management.
We usually commence with a detailed FinOps assessment workshop before proceeding with the actual solution deployment. Top features include one-stop multi-cloud visibility, cost optimization, forecasts and budget tracking, proactive cost control, cost reporting and saving recommendations, observability monitoring, show-back-chargeback capabilities, and AI-driven automated governance. Our security and compliance monitoring and risk management intelligence powered by SHOP’s predictive and preventive maintenance capabilities render a truly enhanced, one-stop offering for enterprises regardless of their industry and landscape size.
Can you share any success stories where your FinOps services led to significant cost savings or operational efficiency?
Hitesh: Here is a recent success story. Operating across 25+ countries, this global education leader is a pioneer in online learning providing learning programs,materials and exam preparation kits to millions of students and thousands of organizations. They had opted for the cloud to deliver its worldwide online education services. However, rising cloud expenses and security gaps thwarted operations. The firm had to take a step back and evaluate its cost metrics to make more informed financial decisions on its IT operations.
We first carried out a detailed review of the provider’s cloud ecosystem to analyze workload performance, security, costs, and business sustainability. An intelligent financial governance framework was delivered rendering real-time business-level insights and the impact of their cloud workloads. Dedicated optimization strategies improved workload performance, agility, and overall security of the cloud landscape. The initiative saved close to 30% of IT TCO, a significant achievement considering their scale of operations.
How do you see the role of FinOps evolving in the next 3-5 years? How do you see the adoption of FinOps principles impacting the broader cloud computing landscape in the coming years?
Hitesh: Over the next 3-5 years, FinOps will expand beyond a niche practice to a more fundamental driver of any cloud strategy, or broader digital transformation, tech innovation initiatives powered by the cloud. While manual experts will be in charge of data interpretations and strategic decision-making, intelligent platforms will be at the core of the FinOps culture inculcating best practices and objectives from multiple BUs. I am kind of talking of an AI-powered autonomous financial governance platform that oversees and runs over and across cloud operations, monitors performance and cost metrics by automatically plugging in data from multiple landscapes, and assesses them in comparison to business KPIs plugged in by the engineering-finance-tech BUs, generates action-level technical recommendations for executive approval, and initiates corrective actions by itself. In short, the platform, supervised by dedicated experts and business heads, continuously optimizes and augments the cloudscape to ensure maximized ROI over cloud and tech investments. This will represent a paradigm shift toward how firms operate on and leverage the cloud for their current needs and business