Managing operational IT expenses using cross-discipline collaboration, or FinOps, can be more art than science. But Capital One wants to help other enterprises learn to manage what's in their cloud wallets.
Capital One, Walmart and Goldman Sachs were among the enterprise end-user contributors to the FinOps Open Cost and Usage Specification (FOCUS) project, released in version 1.0 preview last month by the FinOps Foundation, a nonprofit trade association within the Linux Foundation. Cloud providers AWS, Microsoft, Google and Oracle also collaborated on the spec, which is meant to serve as a vendor-neutral standard for presenting cost and usage data to cloud users.
FinOps emerged as a hotter topic of discussion for enterprise IT over the last year, as worries about a possible economic recession and a withdrawal of venture capital funding weighed on the tech industry. Vendors folded FinOps features into observability tools; some enterprises also moved resources back on premises after having migrated completely to cloud, a trend known as cloud repatriation. Others looked to reduce the number of IT vendors and tools they use, or embraced multi-cloud management as a means to pressure cloud vendors to compete on price.
One analyst predicted the interest in FinOps -- and in the FOCUS standard -- will continue to grow in 2024.
"[FOCUS] is the result of years of effort from organizations frustrated by vast and complex bills," wrote Lee Sustar, an analyst at Forrester Research, in a blog post. "Given its backing by cloud users such as big banks and retailers, FOCUS is gathering momentum."
For Capital One, however, not everything comes down to standards and tooling. Organizational factors, especially cloud maturity and balancing cost savings with developer experience (devx), are also crucial to effective FinOps, according to Anne Johnston, vice president of cloud costs and engagement at the financial services company.
"Our contribution [to FOCUS] has been from a practitioner's perspective about use cases that are important to our [FinOps] analysis," she said. "The specification was driven based on practitioner's use cases from the start so that the specification could be quickly applied and adopted widely."
FinOps collaboration hinges on devx
Anne JohnstonVice president of cloud costs and engagement, Capital One
Capital One hasn't donated to open source the internally developed financial analysis automation tools, including machine learning algorithms, that it uses to track costs. But tools aren't the most important factor in FinOps practices, Johnston said.
"FinOps is an emerging community," she said. "My personal opinion is that the community at large beyond the Capital One walls will only be as good as the information that's contributed back to it."
Companies looking to get on track with FinOps must start with a higher-level look at practices, first and foremost their cloud maturity, she said. When Capital One closed its on-premises data centers and went cloud-first in 2020, it initially focused on stability and resiliency, and then cybersecurity, before it refined cloud cost management.
"If we undertook this years ago at the beginning of our cloud journey, I don't think that we probably would have been all that successful," Johnston said. "Where we are today is the right time and the right place for the financial conversation, especially with the financial climate and budgets being front and center."
Once Capital One's focus turned to FinOps, prioritizing data and reducing noise was the first order of business, Johnston said. That was the foundation for optimizing collaboration with developers for the company's central FinOps team.
"Not everything matters when you're looking at all of this data, and when our teams are inundated with requests [it's important to be] able to say, 'Here are 10 things, but only these two matter most -- if you focus anywhere, focus here,'" she said.
No application's cloud resource usage is going to be perfect, and it's important to distinguish between cloud spend -- even large amounts of it -- and cloud waste, Johnston said. FinOps practitioners can also expect resistance from developer teams to people outside their group giving them cost reduction advice.
"One of the things that we've done pretty extensively is establish a line of trust in our central teams and the individual application teams," she said. "But we still get, 'You don't understand that my application needs this,' or 'You're wrong.'"
There's no replacement in these instances for collaborating with developers on how to address waste and being flexible about it, following the principle of continuous improvement, Johnston said.
"What we've asked them to do in the case that the answer is, 'I cannot,' is take some action," she said. "It doesn't need to be as aggressive as we've recommended, but take some action. You may not save quite as much as we've recommended, but you still save something."
In an era of platform and site reliability engineering, IT organizations should also find ways to reduce the developer toil required to optimize cloud costs, Johnston said.
The result of these practices is that for Capital One, which primarily runs on AWS, cloud repatriation and cloud vendor diversification haven't been necessary, Johnston said.
"It's not just about looking at your cloud spend in terms of the services that you've provisioned," she said. "There are other value points that may not be dollars and cents, but ultimately make the cloud the right decision around … how much time can be saved by releasing faster, speed to market and the competitor landscape."
Beth Pariseau, senior news writer at TechTarget, is an award-winning veteran of IT journalism. She can be reached at [email protected] or on Twitter @PariseauTT.