FinOps Foundation Adds To Balance Sheet To Encompass Cloud+ Costs
Cloud is cheaper, but expensive. Cloud computing has always been positioned as a route for businesses to grasp greater flexibility over their IT services expenditure across compute, analytics, storage as well as related data management tasks and now AI services. The promise of being able to 'spin up or spin down' a cloud service still holds, but convoluted contracts, complex observability challenges and miscellaneous misconfiguration migraines mean organizations often suffer from over-provisioning and under-utilization.
As a codified industry practice designed to combat and control cloud costs, FinOps has been defined as, 'An operational framework and cultural practice which maximizes the business value of cloud and technology, enables timely data-driven decision making and creates financial accountability through collaboration between engineering, finance and business teams.' The mission statement here is one designed to empower both software development and business teams to make trade-offs between speed, cost and quality in the decisions they take on their cloud architecture investments.
New developments in this space now see the FinOps Foundation extend its definition of core cloud cost considerations to also encompass IT asset management and its associated practice of software asset management.
This is a coming together intended to merge and align cost optimization and compliance disciplines in so-called Cloud+ environments. The term is being used to explain FinOps that span not just public cloud expenditure, but also SaaS spending that extends outwards across cloud licensing, datacenter charges and other variable technology costs from big data analytics to AI and large language model costs… and everything in between.
According to JR Storment, executive director and founder of the FinOps Foundation, the 2025 expansion of the FinOps Framework sees the scope of FinOps grow from public cloud cost management to a wider purview. He says that Cloud+ is an umbrella label for managing spend across SaaS, software licenses, hybrid infrastructure etc. Storment and team explain the progression by saying that traditionally, ITAM and SAM have focused on aspects of IT and cloud management that include software inventory, license compliance, renewal governance and software discoverability. The rationale for Cloud+ comes from the fact that while practices have historically operated in parallel, they are increasingly converging into unified teams and workflows.
The 2025 State of FinOps report suggests that organizations are merging FinOps and ITAM/SAM efforts under shared leadership or cross-functional programs. Analyst house Gartner agrees with this proposition, it thinks that by 2026, the 'majority of enterprises with mature cloud strategies' will unify their FinOps and ITAM capabilities. Businesses will do this for a number of reasons, but primary objectives will include a need to streamline software tooling and avoid duplicate efforts to drive better business outcomes.
Key areas where FinOps is thought to need to progress next is an appreciation for the ITAM/SAM intersect, which spans so-called SaaS rationalization. This involves combining FinOps usage and cost telemetry with ITAM 'discoverability' and license controls to optimize SaaS portfolios. This discipline also crosses into cloud license compliance i.e. applying SAM principles to public cloud 'bring your own license' models and usage-based billing scenarios.
While it's hard to provide a like-for-like competitive analysis of the FinOps Foundation as a nonprofit project under the Linux Foundation (there is no other Linux, essentially), we can balance a few weights and measures here and provide some external perspectives.
Even nonprofits make revenue, some of which goes to pay for glitzy conference venue budgets, some of which covers expenses and hotel bills, some of which goes to pay executive salaries… but (in fairness) most of which goes to advancing the codification, development and exchange of best practices and education. Walk the halls of the most enterprise open source exhibitions and you'll often hear member organizations telling you how much they've shelled out on stand space and travel expenses. There's still no such thing as a free lunch… and if an organization wants to be part of the industry's widest body of standards for a practice like FinOps, then it needs to put the financial-factor into its operations operandus.
The global market for FinOps services has been forecast to grow from $13.5 billion in 2024 to $23.3 billion by 2029, so, there is money at stake here, even if it's nonprofit money.
In terms of this whole Cloud+ demarcation that the FinOps Foundation is now detailing, can we question whether this is a plus-grade akin to an airline Comfort Plus seat (actually more functional, sometimes with a cocktail) or merely an attempt to peddle plus size clothing (same product, a bit of extra yarn) across the cloud costing cosmos?
'Cloud+ has been generally well-received in the market. The inclusion of SaaS and on-premises private cloud investments is a natural extension of FinOps' scope at large. IDC has long advocated for SaaS to be part of the scope and processes of FinOps teams, as enterprises typically spend as much on SaaS as they do on public cloud providers. The difference is that the cost is spread across multiple SaaS providers and departments. A big public cloud bill typically gets the attention of the CFO, while wider SaaS spending goes under the radar. As AI investments increase in both public cloud and private enterprise-owned datacenters, the need to track return on investment and provide transparency into all cloud spending will be essential,' explained Jevin S. Jensen, research vice president for Intelligent CloudOps Market at technology analyst house IDC.
The FinOps Open Cost and Usage Specification (also known as FOCUS), is a standardized framework for cloud billing data and has been adopted by cloud hyperscalers including AWS, Microsoft Azure, Google Cloud and (if skip to fifth place after Alibaba) Oracle Cloud. FOCUS joins the foundation's FinOps Certified Practitioner and FinOps Certified Enterprise program.
IDC's Jensen thinks that FOCUS will benefit FinOps tool vendors immediately (he himself has just completed the FOCUS Analyst certification to increase his understanding of the specification) and he envisages FinOps vendors needing to engage in rapid short-term investment to support the standard.
Looking for additional measures in this space, it's worth saying that major (and more moderately-sized) vendors have of course produced FinOps-related technologies. But even if we look at services such as Microsoft Azure Cost Management and Microsoft Azure AI Metric Advisor, we have to remind ourselves that Microsoft joined the FinOps Foundation as a member in February 2023.
Membership fees for individuals are free and the FinOps Foundation gives away hundreds of thousands of dollars worth of scholarship fees every year to individuals who can not afford to pay for certification exam costs. Enterprise membership is not free and nor should it be, but it's hard to track exactly how much any given organization needs to pay. Applicant organizations are 'invited to inquire' from a number of different web links. If the foundation does currently offer one flat membership for enterprises, this may substantiate the calls on some social streams for a more tiered membership model appropriate to different-sized organizations.
In the pursuit of understanding where FinOps goes next, IDC's Jensen reminds us that there is 'more overlap' happening now as this discipline widens to straddle public cloud, private on-premises cloud, AI and SaaS management. He highlights the natural confusion that will still arise in some organizations between FinOps Cloud+ and (traditional) technology business management (widely shortened to TBM) as it has been known to date.
Joining Jensen among the most experienced and widely quoted technology analysts currently dedicated to deconstructing the FinOps space is Tracy Woo, principal analyst at Forrester. While she has plenty of positive views detailing the efforts of industry bodies in this space, she also has reason to call out areas where she sees a shortfall in functionalities, breadth and specific tools.
'The FinOps Foundation has built the FinOps movement. It defines industry standards and thought leadership that the rest of the industry follows - point blank. There aren't others that are more aware, more in touch, more knowledgeable about the space than the foundation. For me and for other end users out there, the bringing together of end users to discuss the challenges in their practices is invaluable to analysts like me who study the space… and to end users who are looking for support and best practices to follow,' said Woo.
Woo points out that the FinOps Foundation has also done what many thought was impossible i.e. gathering the biggest cloud vendors on one stage, in one room to standardize billing constructs. 'That being said, the foundation could be better in vendor inclusiveness. It has put a lot of effort into making sure end users are extremely well-protected from being 'sold to', while providing more access to consultancies who have something productive to offer,' she added.
She says that there continues to be an increasing number of vendors jumping into the FinOps arena and the biggest problem with the market is instability, especially among the smaller players. Forrester's Woo highlights the fact that consolidation is common and points to the fact that product pricing and offering changes have created buyer weariness of working with smaller players. For Woo, there are 'big gaps' right now with tooling capabilities. She says the first point to focus on is AI cost management, because it is still a largely unknown entity. But, she warns, it is a growing concern that will 'hit end users like a freight train' in the next two to three years.
'Business visualization is also key,' explained Woo. 'Most vizualisation in a FinOps tool is found at the engineering layer. For a low to medium-spending organisation, this can work ok. But as cloud spend goes up, the need to justify cost efforts and demonstrate cost avoidance to execs will increase. At this point, the business intelligence and visualization layers aren't there. That being said, I don't think they [the FinOps vendors] should necessarily be the ones reinventing the wheel, but rather they should look to close integration with tools like Quicksight, PowerBI and Tableau.'
On the topic of infrastructure automation within the FinOps realm as a whole, Woo says that 'much of this is weak', especially when compared to Terraform, Jenkins, Ansible. 'This is another area where reinventing the wheel isn't necessary. Some deeper infrastructure automation capabilities should exist in FinOps tools, but also deeper integrations with traditional automation players,' she concluded.
Perhaps the most important (and obvious) factor when it comes to FinOps is the financial bottom line. Organizations will want to know whether they get more sales leads as a result of being certified and branded with affiliation to an industry body. They will want to know how many more sales conversions they get… aand they will want to be able to accurately quantify the value of any FinOps savings they have helped customers deliver in order for them to underpin and validate their own worth. Not all these variables are necessarily easy to measure at the time of writing, but they will very likely improve given the size of this industry body and the penetration it already wields.
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