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Managing the costs of cloud-integrated IaaS and PaaS - FinOps vs. the Gartner framework

FinOps and the Gartner framework for managing the costs of cloud-integrated IaaS (Infrastructure-as-a-Service) and PaaS (Platform-as-a-Service), two approaches with similar goals, but with different focuses and methodologies.



 


1 Overview


FinOps


FinOps, short for Financial Operations, is an operational approach that aims to maximise the value of cloud spend by bringing teams together to transparently share financial and business information. It's about creating a culture of cost transparency across technical and financial teams so that organisations can make intelligent decisions about their cloud spend.



The main principles include: 


  • Collaboration:  Promote collaboration between finance, business and technical teams.

  • Real-time decision-making  Use of real-time data to optimise expenditure.

  • Kontinuierliche Verbesserung:  Regular review and adjustment of cloud usage and investments.



 

Gartner framework for managing the costs of cloud-integrated IaaS and PaaS


The Gartner framework, on the other hand, is a more comprehensive approach that provides specific strategies and best practices for cost control and optimisation for IaaS and PaaS environments. It aims to help organisations manage their cloud spend through effective planning, budgeting, selection and use of cloud services.



The main elements are:


  • Cost-Management-Strategy:  Detailed approaches to managing cloud spend, including cost allocation and budgeting.

  • Recommendations for Optimization:  Practical tips for reducing expenditure by selecting the right service models, negotiating contracts and optimising usage.

  • Governance:  Framework conditions and guidelines for controlling cloud usage and meeting budget targets.

 


2 Differences


Focus and Target Group:  


FinOps focuses more on collaboration between different teams and uses cultural change to achieve cost optimisation. The Gartner framework, on the other hand, provides detailed guidelines and best practices that focus more on management and technical optimisation.


 

Method:  


FinOps promotes agile and continuous improvement of financial management practices in the cloud. Gartner provides a structured framework with specific strategies and recommendations for cost optimisation.


 

Implementation:  


FinOps is a principles-based approach that aims to create cross-cultural accountability for cloud costs. The Gartner framework, on the other hand, offers a more traditional, structured approach to cost management and optimisation.



Both approaches are valuable and can be used in a complementary way depending on the specific needs and objectives of an organisation. The choice between FinOps and the Gartner framework depends on the organisational structure, existing processes and corporate culture.


 


3 ADDITIONAL APPROACHES AND FRAMEWORKS FOR CLOUD MANAGEMENT AND COST OPTIMIZATION


In addition to FinOps and the Gartner framework, there are other approaches and frameworks for managing and optimising cloud costs that are worth comparing. Some of these alternative approaches include:


 

Cloud Cost Management (CCM) Tools


Various providers offer specialised cloud cost management tools that provide automated insights, reporting and optimisation recommendations for cloud spend. These tools can help to visualise costs, identify unused or oversized resources and make recommendations for reservations or savings plans.


 

TCO and ROI Analysis


Total Cost of Ownership (TCO) and Return on Investment (ROI) are classic financial analysis methods that can be applied to cloud infrastructure. They help organisations to understand the total cost of cloud usage in relation to traditional on-premises solutions and evaluate the long-term savings or gains.


 

Agile IT-Financing 


An approach that focuses on the flexibility and adaptability of financing IT projects. Agile IT financing encourages dynamic budgeting and financial planning that can quickly adapt to changing business needs and technology deployments, including the use of cloud resources.


 

Cloud Governance Frameworks 


Cloud governance frameworks focus on the establishment of guidelines, best practices and control mechanisms to manage the use of cloud services. These frameworks cover aspects such as cost management, security, compliance and operational standards. They provide a structured approach to ensure that cloud usage supports business objectives while controlling costs.


 

Vendor-specific Management-Tools 


Large cloud providers such as AWS, Microsoft Azure and Google Cloud offer their own cost management tools and services. These tools are specifically tailored to the services and price structures of the respective provider and offer functions such as cost reports, budget alerts and cost reduction recommendations.


 


4 THOUGHTS ON COMPARISON


When choosing the best approach to managing and optimising cloud costs, organisations should consider the following aspects:


  • Business Objectives: What financial goals is the organisation pursuing with cloud use?

  • Resources and capabilities: Does the organisation have the necessary internal resources and knowledge to effectively implement the chosen approach?

  • Cloud environment: Which cloud services and platforms are used and how complex is the environment?

  • Scalability: Can the approach be scaled as the organisation grows and the use of cloud services increases?

Each of these approaches offers specific advantages and can be adapted depending on the specific requirements and framework conditions of an organisation. It often makes sense to combine elements from several approaches in order to develop a comprehensive strategy for cloud cost management.


 


5 OVERVIEW OF RELEVANT COST-MANAGEMENT-APPROACHES


This combined table provides a comprehensive overview of the different approaches and frameworks for managing and optimising cloud costs. It highlights the respective strengths, challenges and ideal areas of application to help organisations select the most suitable approach.





 



COMPARISON OF IMPLEMENTATION APPROACHES AND EFFORTS IN THE COMPANY


The implementation of cost management and optimisation approaches in the cloud requires different resources, time and adjustments within a company. The following comparative overview focuses on the implementation approaches and the associated effort for the various cost management strategies:





 



7  SUMMARY OF EFFORT:


  • Low: Quick and easy implementation, little need for organisational adjustments.

  • Medium: Requires some customisation and training, but manageable with a clearly defined plan.

  • High: Significant organisational adjustments, extensive training and potentially long-term strategic planning required.  

Choosing the right approach depends on the organisation's specific goals, existing infrastructure and resources. Smaller companies may benefit more quickly from cloud cost management tools, while larger organisations may require a structured approach such as the Gartner Framework or comprehensive FinOps practices to achieve their goals. The implementation of any strategy.



 



 REQUIREMENT SUMMARY REGARDING THE GRADE OF MATURITY :


  • Low: Basic knowledge of cloud technologies and openness to the integration of new tools required.

  • Medium: Basic to advanced organisational skills and competencies in specific areas required.

  • High: Advanced organisational skills, established processes and a mature corporate culture required.

  • Very high: Highly developed strategic, operational and cultural capabilities to implement and manage large-scale change.

The selection and implementation of a suitable approach depends heavily on the company's current level of maturity. Companies should assess their current status and, if necessary, first invest in developing the necessary foundations before implementing comprehensive cost management and optimisation strategies.

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