With increasing use of different cloud services, it can be easy to lose track of cost management. The FinOps framework helps companies get their cloud spending back under control. Matthias Hirschmann, Cloud Solution Architect and FinOps specialist at Swisscom, explains in an interview how FinOps works, how to use the framework and where the potential savings lie.
What distinguishes cloud cost management with FinOps?
Matthias Hirschmann: The aim of FinOps is to align the flexibility of the cloud with business requirements. In addition to efficient use, this includes controlling and allocating expenditure. We merge customers’ finance (Fin) with the existing world of DevOps (Ops). Certified FinOps experts analyse the current situation and work with the IT, Business and Finance teams to identify potential for optimisation.
So you look for hidden potential for cost optimisation?
Increasing cloud cost efficiency is one of the main goals of FinOps. But that’s not all. Objectives can also include driving a cultural shift towards more efficient use of the cloud, cross-team collaboration and cloud-related professional development.
So there’s more than just one approach to implementing FinOps?
Yes, there are different approaches, and a framework like this can be too much of a good thing for medium-sized companies. The FinOps Foundation’s FinOps framework consists of a total of 18 disciplines, which we prioritise depending on customer requirements. In our experience, we already achieve goals such as cost reduction and cost transparency by applying the five to eight most important disciplines.
Why is there a lack of transparency in the cloud?
With the shift from the traditional method to business-oriented purchasing and development, procurement has become much more decentralised. Corporate IT and software developers can turn to hyperscalers to obtain a virtual machine, container services or databases in the cloud. Other areas, on the other hand, purchase complete Software as a Service offers.
Where does the greatest potential for optimisation usually lie?
Implementations and migrations often start with the highly flexible pay-as-you-go billing method. However, if this flexibility is never used, up to 72 per cent ends up being overspent on virtual machines, for example. This is a lot of capital that is unnecessarily lacking in innovation projects.
You’ve supported several FinOps projects. How big are the potential savings usually?
Cost optimisation can be identified in every company. Initially, the potential cost savings quickly add up to 30 per cent. So it’s worth going down this road together.
After a FinOps cost optimisation, the entire cloud management should be transparent and cost efficient. Why is monitoring still needed?
That’s true, at least to begin with. Cloud infrastructure is scalable, and new versions, services and discount options offered by hyperscalers require regular engagement with cloud usage. In addition to growth and innovation, company acquisitions also change the situation, which may have just been corrected. Nowadays, cloud usage is also purchased with the company, and the cycle of informing, optimising and establishing is restarted.
Do companies still need external FinOps specialists for this, or can capabilities be developed internally?
Both routes are possible, and there’s a wide range of options for collaboration. We provide immediate assistance with our initial FinOps analysis. These savings free up financial resources within the company so that they can implement FinOps in the long term. One aim of further FinOps cooperation might be to transfer the necessary knowledge to the company. Initially with individual employees who act as a bridge to internal IT and, depending on their size, can later set up their own FinOps team. Of course, Swisscom can also procure the entire FinOps framework as a managed service. We then analyse, optimise and monitor the entire cloud usage on an ongoing basis and in regular cycles.
Optimising cloud costs with FinOps
Does your company have its public cloud costs under control? Create transparency together with Swisscom. With FinOps, we analyse your current cloud management in terms of technology, business and finance. In many completed projects, we’ve achieved cloud cost savings of around 30%.
How can the long-term use of FinOps in companies be successful?
I see the openness to question existing structures as a prerequisite. It also helps for this cultural shift to have the backing of management. Incentives must be created to encourage the exchange of teams across the company.
Does the support of Swisscom make this happen?
Absolutely. As public cloud experts, we are constantly dealing with our customers’ workloads. And as Swisscom, we have a presence throughout Switzerland. In addition to flexibly offering our services in multiple languages, I also see the physical proximity to our customers as an advantage. This makes it possible to develop an understanding of cloud usage, constantly question existing resources and implement the improvements we discover.
In other words, Swisscom’s support makes it happen, but the customer is part of the team and is therefore part of the success.
