How Company Size and Maturity Impact FinOps Success

FinOps is essential to all companies. But company size has a lot to do with hampering its successful adoption. Smaller companies that are in high-growth mode don’t always prioritize cloud cost optimization. And the bureaucracy at large organizations can impede efficient rightsizing.

Saving money on cloud computing is important for businesses of all types and sizes. However, as I’ve learned in my work helping guide organizations on cloud cost optimization journeys, a company’s capabilities in the realm of cloud cost management can vary significantly depending on factors like how large and mature the business is and how quickly it’s growing. FinOps can help.

Here’s why this oft-overlooked aspect of FinOps (meaning the practice of optimizing cloud spending) is critical for developing an effective cloud savings strategy, and what businesses of different types and sizes should do to align their FinOps initiatives with the nature of their organizations.

The basics of cloud cost optimization

FinOps is a framework for cloud cost optimization based on practices like the following:

  • Eliminating cloud waste by, for instance, shutting down cloud servers or databases that are no longer in active use.
  • Rightsizing cloud resources. This means making sure cloud resource configurations are in alignment with actual requirements so that you’re not paying for resources you don’t use.
  • Using scheduling to automate actions like turning off servers when they’re not needed.
  • Taking advantage of pricing discounts, such as “reserved” cloud server instances.

See also: FinOps Becomes More Important as Cloud Spending Grows

How company characteristics impact FinOps

Any company can pursue the FinOps practices I’ve just described. But some practices may prove easier to implement than others depending on how large and mature your company is, its organizational structure and its rate of growth.

For example, smaller companies tend to find it easier to make changes, like shutting down idle cloud servers. The reason why is that smaller organizations typically have less complex bureaucratic processes in place, which means there is not a long string of approvals to work through in order for an employee to secure the permission to turn a cloud server off.

In addition, when you are part of a small company that has just one engineering team, it’s often easier to figure out who created and maintains cloud resources, which is important for determining whether there’s a need for the resource to be running. This is much harder when you are working at a company with hundreds of engineers spread across dozens of teams, and you have no idea who “owns” a given cloud resource.

That said, smaller companies that are in high-growth mode don’t always prioritize cloud cost optimization. If you’re a startup – especially one backed by venture capital funding – you are probably more focused on bringing products to market and growing your revenue than on achieving the best cloud performance at the lowest possible cost. And that’s OK, as long as you have a plan in place for managing cloud spending as you grow.

As for larger companies, they often benefit from having larger staffs, which means they can spend more time on tasks like assessing cloud server configurations and rightsizing servers that are overprovisioned. This is harder to do at smaller organizations where IT teams are already overstretched. On the other hand, the bureaucracy at large organizations can impede efficient rightsizing, as I mentioned.

What about medium-sized organizations? In my experience, they fall into one of two camps. Some are in a “best of both worlds” position where they benefit from streamlined organizational structures that make it easy to apply changes, and they also have large enough staff to pursue cloud cost optimization. Others are the opposite – big enough to struggle to operate efficiently, but not so large that they have adequate staffing for cloud cost optimization.

At the same time, medium-sized companies tend to face extra pressure to keep cloud spending in check because they are no longer growing so rapidly that cost optimization can take a back seat. This makes it particularly important, in a sense, to establish healthy FinOps practices by the time a business has matured beyond the startup stage. If you don’t get on board with FinOps at that point, you’ll find it much harder to rein in cloud spending as your business – and, by extension, its cloud footprint – grows even larger and more complex.

Aligning FinOps with your organization

Because of challenges like these, organizations should factor their overall maturity into their FinOps adoption strategy.

For example, if you’re a small company without a lot of bureaucracy in place, now is the time to begin implementing practices like cloud resource tagging. Businesses can use tagging to identify applications, owners and environments, avoiding the headache of having to track down this information at a later time. It’s easier to make practices like tagging a routine part of your company’s operations when you’re small than it is if you wait until you’re much larger and already have entrenched practices.

At the same time, if your staff are spread too thinly to rightsize cloud servers, don’t make that a priority for the time being. Focus on lower-effort practices, like shutting down idle cloud resources. It’s better to take FinOps steps you can actually complete than to chase practices that aren’t realistic for your company given its current nature.

After all, we often talk about how FinOps is a “crawl, walk, run” endeavor – meaning you have to start small and then scale up your cloud cost management processes. But not all organizations crawl, walk and run in the same ways. Organizational size and maturity plays a critical role in where you start on your FinOps journey.

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