Cloud FinOps goes beyond simply saving money on cloud costs; it’s a comprehensive strategy to unlock the full business value of cloud operations. It fosters financial accountability for cloud spending across all organizational levels, promotes the identification and elimination of unnecessary expenses, and encourages a data-driven approach to inform cloud strategy decisions. Ultimately, FinOps helps businesses maximize the value they derive from their cloud investments – a key point of interest for stakeholders.
In the era of Artificial Intelligence (AI), the FinOps practice, known for its ability to deliver cloud optimization and cost savings, is undergoing a transformation
Let’s explore some key trends defining Cloud FinOps in the age of AI.
AI Trends to enhance Cloud FinOps adoption
As per the State of FinOps 2024 report by the FinOps Foundation, teams are investing in their forecasting capabilities to better predict cloud spend. The cost of running AI/ML is expected to have a big impact on FinOps practices in 2024. Organizations with a higher overall cloud spend see AI/ML as a rapidly increasing source of variable cost that needs to be managed.
In a general scenario, here are some trends FinOps practitioners can adopt, to leverage technology advantage of AI.
1. Advanced Predictive Analytics:
One of the most exciting applications of AI in cloud FinOps is advanced predictive analytics. By analyzing historical usage data, market trends, and even external factors, AI can forecast future cloud consumption patterns. This allows businesses to proactively scale resources, negotiate better pricing based on predicted usage, and avoid unexpected spikes in costs. Imagine being able to anticipate peak traffic periods and automatically scale up your cloud resources, only to have them scale back down during slower periods. AI-powered FinOps can make this a reality.
2. Automated Cost Optimization:
AI can automate many of the time-consuming and repetitive tasks associated with cloud cost management. This includes identifying and eliminating idle resources, recommending right-sizing options for virtual machines, and applying cost-saving recommendations across your cloud environment. AI can continuously monitor your cloud usage and identify opportunities for optimization, freeing up your FinOps team to focus on strategic initiatives.
3. Anomaly Detection and Root Cause Analysis:
Cloud bills can be complex and difficult to decipher. AI, in collaboration with extensive FinOps solutions, can identify anomalies in your cloud spending, such as sudden spikes in resource usage or unexpected charges. By analyzing usage patterns and historical data, AI can detect anomalies and pinpoint the root cause. This allows you to address issues quickly and prevent them from recurring, saving your business money in the long run.
4. Integration with Cloud Management Platforms (CMPs):
The future of FinOps lies in its seamless integration with Cloud Management Platforms (CMPs). By leveraging AI and machine learning, CMPs can ingest data from various cloud providers, offering a unified view of your cloud spending and enabling automated cost optimization across your entire cloud environment.
Also, comprehensive cloud FinOps solutions such as CloudKeeper Auto, which uses AI to automate the buying and selling of unused reserve instances on AWS, save the hassle of manual purchase and sale of unused instances.
Overall, this integrated approach streamlines FinOps processes and provides a holistic view of your cloud finances.
5. Powering Invoice with AI
Gone are the days of manually sifting through complex invoices. AI, with its natural language processing (NLP) and machine learning muscle, can now automatically dissect your invoices. This translates to a clear understanding of your cloud spending breakdown, allowing you to track trends and pinpoint areas for cost optimization. Integrate the technology with FinOps solutions, use the AI-powered findings to minimize cloud waste, and realize maximum ROI.
Imagine AI streamlining your financial reporting by automating data collection, analysis, and report generation. Furthermore, future FinOps models might leverage AI to become data consolidation champions, pulling financial information from various sources and presenting it in clear, insightful, and timely reports.
6. Proactive Risk Management with AI
AI doesn’t just crunch numbers; it can also be your financial guardian. By analyzing vast amounts of data, including spending patterns, risk indicators, and usage metrics, AI-powered FinOps models can identify potential threats like compliance violations, security vulnerabilities, or unauthorized spending. This proactive approach empowers you to manage financial risks before they snowball, safeguarding your organization’s financial stability.
The Road Ahead
Cloud FinOps just got a major upgrade with AI. Think of AI as a super-smart assistant for your cloud spending. It can automate repetitive tasks like data analysis, predict your cloud needs to optimize resource usage, and even catch hidden costs by spotting unusual spending patterns. This lets you focus on what matters most – running your business. And the best part? As AI continues to evolve, so will FinOps tools. This means you’ll be able to move beyond just managing cloud costs, but strategically use them to fuel your business growth.
By Aman Aggarwal