We’re back with this year’s cloud cost report.

This time around, we’re mixing things up a bit.

Don’t worry. You’ll still get an in-depth look at cloud cost in the FinOps industry, but you’ll get more insights with our data-driven results from leading reports and Anodot’s customers.

If you’re already reaching out to grab that report, you can find it here. If you’re interested in a sneak peek, here’s a quick preview of what our 2024 report has in store.

Current Trends in Cloud Costs

What should FinOps expect this year? Top industry leaders share their insights on the 2024 cloud cost landscape.

FinOps Foundation 2024 State of FinOps Report

For the first time, reducing waste and managing commitments have emerged as the primary priorities for FinOps practitioners across all spending tiers.

• Nearly half of the practitioners highlighted the need for organizational alignment and executive buy-in to tackle their challenges effectively.
• Prioritizing automation has become one of the top three focus areas across all spending tiers. Organizational focus is directed towards improving budget granularity, communication, forecast accuracy, and budget adherence, with almost 57% of respondents seeking enhancement.
• The impact of AI/ML costs on FinOps practices is becoming evident, with 31% of all respondents and 45% of large spenders ($100M+ annual cloud spend) acknowledging its influence. Challenges include the rapid escalation of AI costs, allocation of shared AI expenses, and correlating AI costs with business outcomes.

Flexera  2024 State of the Cloud Report

Optimizing current cloud usage and transitioning more workloads to the cloud are high priorities for organizations across all usage levels.

• Managing cloud expenses has emerged as a significant challenge, surpassing security concerns.
• While the self-reported wasted cloud spending on IaaS and PaaS has decreased to 27% from a peak of 35% in 2022, only half of organizations have a dedicated FinOps team for cloud cost optimization.
• Despite economic uncertainties, cloud cost optimization precedes most organizations’ sustainability. A large percentage of respondents, 85%, utilize GenAI cloud services to varying extents, with 25% extensively, 38% in experimental stages, and 22% using them sparingly.
  

 Intel Granulate State of Cloud Optimization 2024 report

In 2024, the primary objective is prioritizing cloud spend management, followed by security and compliance.

• Many teams need to regularly review their cloud expenditures, with nearly half of respondents reporting quarterly or annual reviews, at 30.5% and 16.7%, respectively.
• Installing microservices leads to increased costs, with containers and Kubernetes identified as the most expensive and challenging-to-optimize workloads.

So, what patterns are we seeing from these reports? In 2024, the FinOps team will prioritize cloud spend management, security, and compliance. Many teams need to regularly review their cloud expenditures, and adopting microservices leads to increased costs, with containers and Kubernetes identified as the most expensive and challenging-to-optimize workloads.

Identifying current trends can be an eye-opener, showing what your FinOps colleagues prioritize in the cloud. Now that you know what to prepare for, how can you optimize for success? We’ll show you what our customers are doing!

How Anodot Customers Maximize Their Cloud Investments

Giving tips on managing cloud costs is one thing, but when you’ve got real data to back it up, that’s what counts! Here’s how our customers are cutting down their cloud expenses.

Controlling Cloud Spend

Anodot customers are witnessing a trend to brag about: their cloud footprint is expanding, yet their
monthly expenditures are consistently declining!

How?

This happens because our clients actively use advanced platforms to give clear advice on using the cloud better and save money simultaneously. These tools don’t just aim to reduce expenses; they empower businesses to extract maximum value from the cloud. They facilitate timely, informed decisions and instill a culture of financial accountability.

Impacts

As a result, even as these customers scale up their operations and migrate additional workloads to the cloud, they’re achieving a notable reduction in their cloud costs, seeing a consistent downward trend month over month and year over year.

Cloud usage & cost optimization

As mentioned before, a key goal for FinOps in 2024 is to optimize cloud usage and costs. This means smartly designing infrastructure to maximize efficiency.

Anodot revealings

When analyzing cloud usage and cost data, Anodot’s AI engine generates recommendations for workload and rate optimization. In 2022, workload and rate optimizations were equally prevalent in recommendations, but by 2023, workload optimizations took the lead, constituting over 90% of recommendations.

Impacts

Anodot’s AI engine significantly shifts towards workload optimizations; companies implementing FinOps must focus more on designing efficient infrastructures. This indicates a move towards smarter cloud management strategies, ensuring that resources are used more effectively, ultimately leading to cost savings and enhanced operational efficiency.

Realized savings opportunities

Anodot users looked for ways to cut costs without losing the benefits they get from their cloud investments.

The Numbers

2022 witnessed the completion of about 60% of the recommendations, which soared to nearly 90% in 2023, marking a significant 55% increase!

Impacts

There’s a clear shift happening where the main focus is now on cutting down waste and managing commitments better. These have become the top priorities for FinOps practitioners at every spending level.

Most impactful optimizations

Which of our customers followed our advice for efficient cloud operations? In 2023, FinOps practitioners put over 90% of Anodot’s optimization tips into practice.

5 most implemented optimizations

Ebs-unattached, ec2-stopped-instance, ip-unattached, ebs-outdated-snapshot, and cloudtrail-duplicate-trails were the top optimizations by FinOps practitioners, making up nearly half of all completed optimizations. Ebs-unattached was the most impactful, contributing to over half of the savings, a significant increase from 33.75% last year. The other top optimizations accounted for less than 13% of total savings.

Impact

These results show that zeroing in on certain tweaks, like dealing with unattached EBS volumes and shutting down EC2 instances, can really cut down organizational costs. It’s pretty eye-opening that the unattached EBS volumes accounted for more than half of the savings, showing how much money these optimizations can save. This also points to a growing trend of getting savvy with FinOps practices, especially since we’re seeing more savings from these optimizations than last year. Companies focusing on these areas can manage their cloud resources and costs way more effectively.

Looking Ahead: Predictions for Cloud Costs

So, what’s next for cloud tech and FinOps? Here’s a quick look at our thoughts and what our customers are saying about the latest in managing cloud costs.

Anodot’s perspective

After reviewing our customer’s data and the opinions of top experts, we think the future of managing cloud costs will definitely involve AI innovations and a few challenges.

 Our viewpoint

We expect business leaders in 2024 to prioritize predictability in the face of economic uncertainties. They are turning to accurate forecasting and strict budget adherence to stabilize variable cloud spending.

• The evolution of AI-powered FinOps is opening new opportunities through chat-based assistants and analytics, elevating maturity, and addressing talent challenges. Despite facing AI/ML cost rises, cloud inflation, and resource scarcity, the need to optimize cloud costs and automate code with human oversight is becoming more critical amidst global chip shortages.

Our partners’ perspective 

CyberArk predictions

AI-driven FinOps is set to shape cloud decision-making by leveraging data insights and automation.

• It will be crucial to integrate FinOps with key roles like Architect, Sales, and Security. Automation will streamline data collection and enhance day-to-day FinOps tasks.
• Organizations will prioritize business continuity, with FinOps becoming a non-functional requirement akin to security and compliance. Aligning FinOps with efficient resource utilization and security will be vital for a comprehensive solution in the evolving operational landscape.

Terasky predictions

Gen-AI and FinOps are set to revolutionize infrastructure management, enhancing cloud efficiency.

• The evolution of FinOps necessitates more maturity in its operational phase, while Gen-AI is poised to assist companies in implementing best practices for new workloads.
• A comprehensive approach involving a mix of tools and solutions is vital for efficient FinOps services. Platforms are expected to offer automated processes that drive recommendations into action.
• Collaboration with a solutions integrator can further optimize cloud operations and enhance key performance indicators.
  

Get our in-depth analysis and what our partners think about FinOps future in our report!

Final thoughts

2024 is shaping up to be a big year for FinOps and cloud tech. With Gen AI on the rise, companies are getting a clearer picture of their spending than ever before. With that in mind, monitoring often gets overlooked, so definitely make it a priority in your use. (There’s a lot of money to be saved!)

From what we’ve seen, our customers are making proactive steps on FinOps based on our insights and recommendations. Our platform focuses on reducing unnecessary cloud costs and streamlining operations; our data supports this! Woo!

Remember its just a quick snapshot, though! Our full report dives deep into our data, offers forecasts from our customers, and highlights the must-knows from the latest FinOps reports.

Check it out and here’s to a fantastic 2024 in the cloud!