A recent report confirms what we know to be true: customer demands are changing faster than businesses can respond, creating a growing divide between what buyers want and what companies offer. Cloud technologies are essential in bridging that gap, but companies need an ironclad strategy to prevent cost overruns, maximize cloud resource utilization, and conserve IT dollars as they invest in more digital innovation. That means they need FinOps tools to help control rising cloud costs.
The Cloud is Rife with Cost Management Challenges
Across every type of cloud technology, companies struggle to keep a lid on their expenditures.
Infrastructure-as-a-Service (IaaS): Overestimating and underusing public cloud services is a serious issue that’s causing companies to overspend by as much as 70% and waste up to 30% of IaaS resources. IT departments often lack visibility into the services they have, throwing workloads out-of-sync with the reality of business needs.
Private cloud environments: IT and finance teams often grapple to understand the total cost of ownership across their on-premise cloud estate — gaining a holistic view of both the physical and virtual assets as well as their associated utility and management costs. Comparing the price of private and public clouds is also critical in guiding workload placement strategies and cloud expense management.
Software-as-a-Service (SaaS): SaaS costs easily add up, especially without deep visibility into all of the applications and licenses being used across multiple departments. Many companies end up paying for more than they need in the form of duplicate tools and unused licenses, not to mention the significant cost implications of Shadow IT.
Unified Communications-as-a-Service (UCaaS): Companies are working to regain control of UCaaS costs after a spending explosion driven by the pandemic. Key approaches include consolidating redundant apps and using economies of scale to negotiate more favorable terms at reduced costs.
FinOps Tools to the Rescue
Savvy businesses are turning to FinOps tools to capitalize on the cloud’s promise of ROI without wasting resources or adding unnecessary complexity. With the potential to reduce cloud costs by as much as 30%, 98% of companies now either have a formal FinOps practice in place or are planning to implement one.
Using software platforms to operationalize the FinOps framework, companies get solutions uniquely designed to solve the most pressing issues related to cloud cost management:
- Rising cloud costs: Public cloud service providers openly admit that IaaS bills are spiraling out of control, and cloud-flation is another part of the problem. FinOps software and services help key stakeholders track, analyze, and optimize their infrastructure services across multiple vendors.
- Unpredictable cloud costs: The cloud introduces an entirely new cost model that requires airtight management and oversight – something a comprehensive FinOps solution solves for by providing a single-pane view of cloud service usage and cloud financial information with cost governance features across as many providers and software applications as possible.
- IaaS and SaaS waste: FinOps analysis unlocks deep insight into cloud usage and costs to help IT decision makers quickly pinpoint unused resources and duplicate apps, realign resources to business needs, and strengthen security and mitigate risk by finding out which apps are running outside the knowledge of IT.
- Maturity in cost management: Can you manage your cloud data and services using your providers’ dashboards? Sure, but the heavy lifting of analysis and follow-up actions will likely fall on you to fuel improvements in cost optimization. Native tools can limit maturity. FinOps tools remove this unnecessary complexity, streamlining cost management and turning unstructured data chaos into actionable cost-saving insight.
FinOps Tools: Should You Build or Buy a Solution?
There’s no denying the power of FinOps tools for fueling cloud cost and efficiency savings, but companies must carefully consider whether they should build their own solution or purchase a software platform and service from a third party.
Companies using third-party FinOps software and services realized a 20% cost savings on average, while DIYers save less than 10%.
Data from a 2024 research study is enlightening, showing IT decision makers how important it is to consider their tooling approach. Solutions can more than double your cloud savings. Companies using third-party FinOps software and services realized a 20% cost savings on average, while DIYers save less than 10%. This signals a necessary shift away from a laborious DIY approach to an AI-powered Cloud Expense Management (CEM) platform as a lean, mean, automated FinOps machine.
Tangoe One Cloud: FinOps Tools for 360-Degree Cost Optimization
AI-powered FinOps is the name of Tangoe’s game and the reason why Tangoe holds the lead in cloud expense and asset management. AI accelerates data analytics, the execution of cost optimization recommendations, and cloud operational management tasks necessary for both IT and finance teams. Our FinOps solution is purpose-built to automate as much of the cloud cost management process as possible to save companies the most time and money.
Our research shows that enterprises activating a FinOps model using AI-powered software like Tangoe One Cloud are 53% more likely to report an overall cost savings of greater than 20% compared to those not using AI. At Tangoe, our customers report cloud cost savings of greater than 40%.
There are so many other reasons to love Tangoe One Cloud for controlling cloud costs, optimizing usage, improving budgeting and forecasting, and aligning investments with business goals.
Start improving your organization’s cloud financial health with Tangoe.