The widespread adoption of the public cloud, while it certainly has noteworthy advantages, can lead to unforeseen costs for IT organizations. This is true even for those businesses operating on hybrid multicloud operations that leverage public cloud and private data centers. Keeping track of costs is increasingly complex and more critical than ever.
This is giving rise to FinOps.
What is FinOps?
FinOps is the practice of optimizing cloud computing and other technologies to empower greater efficiency, faster, more intelligent decision making and drive stronger financial responsibility through company-wide collaboration.
With this financial management discipline, employees have to coordinate across engineering, finance, technology and business teams, where each department is accountable for their cloud usage. Organizations save money by ensuring everyone has access to timely data on cloud costs, that they actively monitor changes and optimize their usage accordingly. FinOps is intended to build a culture of communication and responsibility so that cloud usage is dictated by business value.
FinOps framework. Source FinOps Foundation.
Verified Market Research projects that the global cloud FinOps market value will grow from $2.3 billion USD to $10.8 billion USD by 2032. That’s an annual growth rate of 24.5% year over year starting in 2025. These figures demonstrate not only the sharp growth in FinOps practices across the industry but also the perceived importance of FinOps by individual organizations and key decision-makers.
Why is FinOps Important?
After organizations rapidly spun up their use of public cloud resources to meet the challenges presented by the COVID-19 pandemic, many were surprised at how expensive it became over time, according to Charlie Boyden, former product marketing manager at Nutanix.
“Public cloud was sort of marketed as this magic bullet, but these days we’re hearing from IT professionals that the public cloud is actually very expensive,” Boyden told The Forecast.
“If you’re paying on demand, your costs can quickly skyrocket. Especially when there’s not enough governance on individual teams for the resources they’re using when they’re provisioning them.”
He said there’s a growing need for cost management tools and processes for managing IT resources. Not just for public cloud services but across all IT operations, including hybrid multicloud systems that combine a company’s owned or co-located data centers with a variety of public cloud services.
That’s why the State of FinOps 2025 Report found that workload optimization and waste reduction is the top priority for practitioners of FinOps.
As IT operations grow more complex and spread out, it can become more difficult to align and coordinate between teams who manage systems and those who provide access to those systems, Boyden said.
“FinOps isn't just about finding cost savings across your clouds,” Boyden said. “It serves as the foundation for nurturing a culture of accountability across the entire organization, paving the way for sustained, long-term success.”
He said Nutanix combines professional services with a multicloud cost management solution called Nutanix Cloud Manager Cost Governance (formerly known as Beam). This combination provides IT teams with cloud spend insights, optimization opportunities and tools for fostering a long-term FinOps culture in their business.
The Black Box of Unforeseen Costs
Turning on a new cloud service account can be like diving into a black box of unforeseen costs, according to Mayank Gupta, director of product marketing at Nutanix. He said cloud services can be complex with many moving parts.
“They don’t always communicate clearly what they charge their users for or when,” Gupta told The Forecast. “I was talking to a Philadelphia utility and the cloud bill just from one vendor had 160,000 line items in them.”
He spoke from his own experience of spinning up a public cloud computing instance to run a large language model solution. It required setting up multiple other services, including a network gateway.
“The interesting part was once I was done with the product, I shut down my instance, but kept getting bills for three months,” Gupta said.
“Apparently my network gateway was on, and I had to dig five times to find that particular instance so that I could shut it off. Now I’m giving you a very simple example of how somebody who is technically savvy, who just ran one single service on a public cloud, paid for it for three months without realizing that this black box had 10 different knobs which could potentially charge you.”
This raises the question of how much a large company with many workers, potentially hundreds of developers, might be overspending from many individuals simply turning on cloud services and running business applications.
The 7th Annual Nutanix Enterprise Cloud Index, which surveyed IT decision-makers from around the world, showed that 90% of respondents expect their costs to rise due to the rise of AI. “AI has opened up several new sets of challenges,” said Gupta.
Racking up runaway costs could spell doom for any business.
“There can be cost, security so many other implications, which is what keeps the CIOs awake at night,” Gupta said.
Hybrid Multicloud as a Growing Infrastructure Solution
Despite the potential cost implications of operating in the cloud, more IT leaders are turning to hybrid multicloud operations and are eager to find ways to manage the mixing of infrastructure.
“We are starting to find that customers don’t really want to step back from public cloud, but want to control workloads they have in the public cloud or in multiple public clouds,” said Boyden.
As The Forecast reported, IT professionals are eager to have tools for managing mixed infrastructure. These tools include open source or low-code tools to manage IT resources, but Gupta said this is moving beyond scaling up or down resources.
“IT teams want to see what’s coming, what’s around corners and what’s trending so they can adapt how they use resources in order to fit budgets or shaft cost strategies,” said Gupta.
He said Nutanix has built capabilities in its hybrid multicloud management software that enable FinOps, empowering teams to understand resource costs in real-time. It also learns and automatically alerts IT teams or can adjust to pre-set instructions.
As more companies rely on hybrid multicloud IT systems, Gupta said whole teams will need to work together and follow a cloud-smart strategy.
“The cloud is very important, but how do we go about being judicious about what workloads need to be in the cloud [and] what workloads could be in a different environment?,” he said, describing the cloud-smart mindset.
These different environments can include a data center, cloud or data systems at the edge.
“Cost governance is the right solution to this challenge,” he said. “It must be continuous and strategic without losing sight of current and future costs.”
FinOps Becoming Fundamental
The growing need for cost management in the hybrid multicloud is creating a situation in which FinOps is a necessary role in IT teams everywhere, explained Boyden.
“Running things in multiple places not only creates a financial challenge but also just an organizational and governance challenge,” he explained. “You’re logging into multiple different interfaces to see what the spend is in each environment and you’re trying to manually reconcile those, probably in an Excel spreadsheet or some kind of in-house solution that you’ve built.
This isn’t optimal.
“So that’s where FinOps and NCM cost governance come into play,” Boyden said.
FinOps as an internal, standalone process in an IT team is all about implementing and enforcing cost governance using only the resources available within the organization itself. The right FinOps solution centralize the management functionality and dashboard accessibility to one unified console so that operators can monitor important information through a single pane of glass. Having visible benchmarks and spending metrics is beneficial for both the sake of monitoring and managing costs as well as for taking the first steps toward starting a conversation about how to improve cost efficiency in the first place.
The capabilities of a cost governance platform, like NCM, that centralizes and unifies FinOps can make the difference between succeeding or failing to rein in costs, said Gupta.
Best Practices for Integrating FinOps
Cross-Department Collaboration – FinOps is about company-wide communication and alignment that ensures businesses get the most value out of every dollar spent. It’s about building a culture that fosters teamwork.
Visibility and Transparency – Data on cloud costs must be shared and actively tracked to facilitate optimal efficiency and smart decision making. Forecasting also becomes paramount to avoid unexpected expenses. “Visibility is the first step in controlling your costs,” said Gupta. “That's the biggest challenge I keep on hearing from the customer. How do I have visibility across all these different states? With Nutanix you have the ability to see every single thing in one single place.”
Accountability – Each employee must understand their cloud footprint and take ownership over their usage. “Justify the cost of your department,” said Gupta. “If you're providing all these resources, who is using those resources and are these resources being managed appropriately?”
Governance – Clear policies and budgets are put in place to avoid wasted resources. “You cannot spend without constraints,” said Gupta. “Bring everything in one place so you can see where your dollars are being spent. Then once you see it, you can run an analysis on it.”
This is the new path to making workload placement decisions that are cloud-smart and that ensure the organization is only ever spending what it needs to spend. Gupta said implementing FinOps and cost governance will harness the advantages of the hybrid multicloud while also keeping enterprise spending in check.
“There will always be an opportunity to be in the limelight because you'll be saving your business dollars, said Gupta. “You could be the hero.”
This is an updated version of the article originally published on October 13, 2023.
Editor’s note: Learn more about managing Finops with Nutanix Cloud Manager software. Test drive Nutanix's Cost Governance solution.
Ken Kaplan is Editor in Chief for The Forecast by Nutanix. Find him on X @kenekaplan.
Chase Guttman contributed to this story.
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