Mythbusters Series: Small Scale, Big Gains - Unmasking the FinOps Power for SMBs
In our Mythbusters series, we're cutting through some widespread misconceptions around FinOps. Today, we're addressing a myth that can hold back many organizations from realizing their potential: Myth 3: FinOps is only for big companies.
The Myth: Size Matters
Size does matter, but not in the way you might think when it comes to FinOps. There's a persistent belief that only large corporations with vast resources can benefit from the cost efficiency and financial control that FinOps provides. It's time to debunk this myth: FinOps is a beneficial practice for organizations of all sizes, including small and medium-sized businesses (SMBs).
A Trip Down Memory Lane: The On-Premises Infrastructure Era
It's worth revisiting how we used to handle IT resources. In the era of on-premises infrastructure, we'd buy hardware like servers, storage, and networking gear. These were substantial upfront investments. Once the purchases were made and the gear was installed, we could deploy resources more or less as we pleased. The cost was already sunk, and it was all about maximizing usage.
Cloud Spending: A Different Ball Game
The advent of cloud computing changed the game. Unlike the on-premises model, the cloud is essentially a pay-as-you-go service. It's like a faucet: if left unchecked, it can drain resources quickly, potentially burning through your budget faster than you can keep up.
This difference in the financial model of IT resources has significant implications, particularly for SMBs, where budget management can be even more crucial. The sooner businesses adapt to this model, the better they can manage their cloud spend.
The Wasted Spend Conundrum
Wasteful spending in the cloud is a real and costly issue, especially for SMBs. According to Flexera's 2020 State of the Cloud Report, around 30% of cloud spend is wasted. This waste could equate to a significant portion of an SMB's IT budget that could have been invested more productively elsewhere.
Six FinOps Principles to the Rescue
Fortunately, FinOps provides a roadmap to navigate this issue. SMBs can harness the power of FinOps by understanding and applying its six key principles:
Teams need to collaborate: Collaboration is key. It's crucial for everyone involved in using and managing cloud resources to work together to optimize spend.
Decisions are driven by business value of cloud: All cloud spending should be justified by the potential business value it provides.
Everyone takes ownership for their cloud usage: Encouraging a culture of ownership and accountability can help curb wasteful practices.
FinOps data should be accessible and timely: Having easy access to up-to-date data on cloud spend and usage allows for better decision-making and efficient problem-solving.
A centralized team drives FinOps: A dedicated team, even if it's a small or virtual one, can effectively manage FinOps practices, leading to better control over cloud usage and spend.
Take advantage of the variable cost model of the cloud: Strategies like reservations, saving plans, and spot instances can help organizations get more value from their cloud spending.
By understanding these principles and integrating them into their operational practices, SMBs can effectively manage their cloud spending, making the most of their IT budget.
Conclusion: Unmasking the Power of FinOps for SMBs
The myth that FinOps is only for large organizations is just that - a myth. Whether you're running a small local business or a multinational corporation, FinOps has something to offer. In particular, SMBs stand to gain a lot by adopting FinOps, from improved cost efficiency to better financial control and business value.
As we bust Myth 3 in our series, we want to emphasize that the power of FinOps isn't exclusive to large companies. With the right understanding and implementation of FinOps principles, SMBs too can achieve significant gains.
Stay tuned for the next installment in our Mythbusters series, where we'll continue to debunk common FinOps myths. Until then, happy myth-busting!