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Spotify and Just Eat join forces with tech firms to help enterprises manage cloud costs better

A new non-profit, cloud-focused trade association has emerged that wants to help prevent financial management issues get in the way of enterprises embracing cloud

Spotify and Just Eat are among the firms that have come together to create a non-profit trade association, geared towards helping enterprises make their financial operating models cloud-ready.

The firms have joined forces with Atlassian, Autodesk, Cloudability, Gannett, Here Technologies and US financial services provider Nationwide to create the FinOps Foundation, which wants to help enterprises adapt their financial management strategies to accommodate cloud purchases.

The move to cloud often involves a shift in how enterprises manage their finances to accommodate the pay-as-you-go nature of how providers operate, and this slows down the time it takes to digitally transform their organisations, the foundation claims.

This is backed by 451 Research’s report Cost management in the cloud age: enterprise readiness threatens innovation, which suggests that most enterprises struggle to manage their cloud spend, because of how much it can vary depending on use.

The report’s findings say this challenge can lead to slower-than-expected cloud adoption, have a negative impact on enterprises’ ability to innovate and, in turn, poor utilisation of cloud resources.

Hansjoerg Kaempf, director of cloud governance and cost optimisation at healthcare services company Cardinal Health, knows only too well the impact that managing an escalating cloud spend can have on a company.

“As our investment in cloud continues to grow relative to overall IT spend, the tension between enabling high-velocity teams to innovate while controlling and optimising spend has become a balancing act,” said Kaempf.

The FinOps Foundation wants to help enterprises facing similar challenges by offering guidance and best practices on how to adapt their financial systems and business culture to accommodate cloud purchases.

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It aims to bring “financial accountability to the variable spend models of cloud” by supporting collaboration between technology and line-of-business teams that are now responsible for overseeing aspects of the off-premise procurement process, said Kaempf.

“FinOps is a combination of systems, best practices and culture that empowers our cross-functional teams to maintain financial accountability against the variable spend model of cloud,”  he added.

Mat Elis, CEO of FinOps founding organisation Cloudability, said the issues the foundation is tackling can be exacerbated as the size of enterprise cloud deployments increases.

“FinOps is the operating model necessary for cloud at scale,” he said. “It provides a framework to encourage unfettered innovation by IT while putting in place the practical guard rails from finance that a business needs to compete and win in cloud.”

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