Cloud costs have been under the microscope in recent years as organizations seek to rein in spending. Now, organizations are bringing some workloads back on-premises and building private clouds to support some applications. They’re also adopting AI and investing in high-performance servers and storage to support AI-powered workloads.
Those initiatives are driving up costs, and organizations are looking for ways to ensure that their IT spending aligns with business objectives. The FinOps Framework is expanding to help them do just that.
The FinOps Foundation has updated its framework to reflect broader technology spending beyond just cloud. Significant revisions in 2024 and 2025 include SaaS, AI and on-premises infrastructure.
The FinOps Framework now encompasses a broader “Cloud+” scope, solidifying its role as a comprehensive financial management discipline. It can help organizations achieve greater financial visibility, data-driven decision-making and enhanced accountability throughout the IT environment.
Introduced in 2019, the FinOps Framework is a best practices approach for optimizing cloud spending. It provides a structured operating model organized into Principles, Personas, Phases, Domains and Capabilities to help organizations manage cloud costs through cross-functional collaboration.
It aims to maximize the business value of cloud investments through cost visibility, waste reduction and continuous evaluation. It is also designed to break down silos between IT, finance and business teams, emphasizing shared ownership and responsibility.
Its success is exemplified by its widespread adoption. According to IDC, three-quarters of Forbes’ Global 2000 companies have adopted the FinOps Framework. Not all have mature FinOps practices, but they are scaling out the discipline to encompass more of the IT environment.
This expansion is largely driven by AI adoption, which comes with unique cost challenges. AI workloads are dynamic, making costs difficult to predict. Furthermore, AI spending typically involves the public cloud, on-premises infrastructure and SaaS, making it difficult to obtain an end-to-end view of the costs involved. FinOps offers the ideal model to help organizations control and optimize their AI spend.
FinOps provides a unified approach that pulls together all types of costs associated with delivering a product or service, eliminating silos and providing enterprise-wide financial transparency. By applying FinOps methodologies, organizations can analyze granular cost and usage data for non-cloud resources. Stakeholders can make more informed decisions about resource allocation, workload placement and product viability.
The framework establishes clear ownership and accountability for non-cloud spending by associating costs with specific teams, departments or business outcomes. Practices such as cost allocation and tagging encourage teams to manage resources efficiently.
A core FinOps goal is to help stakeholders understand the unit cost of delivering a service across both cloud and non-cloud components so they can make more-informed decisions. Other FinOps principles, such as identifying idle resources and optimizing usage patterns, help reduce waste and maximize the ROI of fixed-cost assets.
Applying FinOps to non-cloud costs leads to more accurate and realistic budgeting and forecasting across the entire IT landscape, ensuring better financial planning and resource alignment with organizational priorities. In essence, extending the FinOps framework beyond the public cloud allows organizations to move from siloed cost management to a holistic, data-driven approach for managing their entire technology spend.
The FinOps Open Cost and Usage Specification (FOCUS) is an open standard that allows organizations to format internal cost and usage data in the same manner as cloud data. This reduces complexity and fosters collaboration across all IT environments.
Technologent’s consultants can help you leverage the FinOps Framework to optimize your cloud and AI strategies. We will help you identify the right platforms and services to support your workloads and map spending to specific goals and initiatives.
Our service provider solutions team has developed a proven methodology for procuring customized, turnkey solutions in a pay-per-use model. Together, these solutions and services provide cost control and budget certainty while enabling greater agility and innovation.