Why Cloud FinOps is Failing

This channel explores the ins and outs of cloud computing without an agenda or falling into the narrative set by “big tech” marketing. We look at what works, what does not, and the actual value of this technology in a balanced and information-forward way.
Summary

While intended to simplify cloud cost management, cloud units often fall short in measuring true cloud value for enterprises. These standardized metrics oversimplify complex cloud environments and fail to account for industry-specific needs and strategic benefits. Rather than relying solely on generic measurements like cost per transaction, organizations should develop bespoke metrics that align with their unique business objectives and contexts. This tailored approach enables better decision-making by balancing efficiency with strategic value, ensuring cloud investments drive real business outcomes. The future of cloud value measurement requires more sophisticated, customized frameworks that evolve with business needs.
Bio

With over 30 years of experience in enterprise technology, David Linthicum is a globally recognized thought leader, innovator, and influencer in cloud computing, AI, and cybersecurity. He authorizes over 17 best-selling books, over 7,000 articles, and 50 courses on LinkedIn Learning. He is also a frequent keynote speaker, podcast host, and media contributor on digital transformation, cloud architecture, AI, and cloud security topics.

Reference(s) for this video:

Related article:

https://www.infoworld.com/article/3612476/are-cloud-units-a-good-measure-of-cloud-value.html


My FinOps course:

https://www.linkedin.com/learning/finops-essentials-for-cloud-deployments/introduction-to-finops

Where you can find me:

My Gen AI Architecture Course on GoCloudCareers:

https://www.gocloudarchitects.com/generative-ai-architect-program-enrollment-david-linthicum

My InfoWorld Blog: https://www.infoworld.com/author/David-Linthicum/

Follow me on LinkedIn: https://www.linkedin.com/in/davidlinthicum/

Follow me in X/Twitter: https://twitter.com/davidlinthicum

My LinkedIn learning courses: https://www.linkedin.com/learning/instructors/david-linthicum

My latest book: https://www.amazon.com/Insiders-Guide-Cloud-Computing/dp/0137935692/ref=sr_1_1?crid=3OGP6IPZ7XHKA&keywords=David+Linthicum&qid=1704395835&sprefix=david+linthicum%2Caps%2C165&sr=8-1
Video sponsorship opportunities: Email me at david@linthicumresearch.com

Talking points:

I. Introduction. 01:20
• The cloud computing landscape has evolved dramatically, yet our methods for measuring its value haven't kept pace.
• Many enterprises still rely on simplified metrics that fail to capture the true complexity and value of their cloud investments.

What is FinOps? 02:58

FinOps, or Financial Operations, is a set of practices and cultural philosophies that organizations adopt to manage cloud financial management effectively. It bridges the gap between finance, engineering, and business teams, enabling better visibility and accountability in cloud spending. By integrating financial considerations into the cloud decision-making process, FinOps helps organizations optimize costs, forecast expenses, and drive value from their cloud investments.

• My FinOps Course
• My FinOps White Paper
• My InfoWorld FinOps article

II. Understanding Cloud Units. 04:19
A. Definition and Purpose
B. The Promise

III. The Problem with One-Size-Fits-All Metrics. 06:19
A. Complexity Reduction
• Modern cloud environments are more like ecosystems than machines.
• They involve thousands of interconnected services, dynamic scaling, and complex dependencies.
• Trying to reduce this to a single metric is like trying to measure a city's health by only counting its population.
C. Missing the Strategic Picture. 10:30
• Cloud investments often deliver value through improved agility, innovation capacity, and competitive advantage.
• These benefits are invisible to traditional cloud unit metrics. When organizations focus solely on cost per unit, they risk optimizing for efficiency at the expense of strategic value.

IV. Real World Implications. 11:27
A. Misleading Metrics
• Consider an e-commerce platform that reduces its cost per transaction but sees customer satisfaction plummet due to increased latency.
• The metrics show success while the business suffers. These false positives are dangerous because they can mask real problems behind apparently good numbers.
B. Strategic Misalignment
• Organizations might delay crucial infrastructure investments because they would increase their cloud unit costs, even though the investment would enable new revenue streams.
• This misalignment between metrics and strategy can cripple innovation and growth.

V. The Case for Bespoke Metrics. 13:30

IX. Conclusion. 16:50