Increasing cloud costs is a major pain point for IT leaders in 2024. Four reasons are causing an increase in the cost of cloud workloads. These are:
- Excessive storage (52%)
- Lack of integration strategy (44%)
- Overconsumption of network bandwidth (42%)
- Inefficient Cloud architecture (40%)
FinOps leaders are finding it difficult to control the cost of cloud governance, management, and modernization despite having an analytics-powered operational framework and supporting cultural practices. According to the latest report published by Boomi, cloud costs are spiraling out of control despite extensive use of Cloud Cost Management and Optimization tools, also called CCMO tools. As per Forrester, modern FinOps teams are leaning toward proactive cloud optimization— this is exactly what Boomi’s new ‘Cloud Costs Are Out Of Control: Integration and Modernization Can Help Rein Them In’ report has found out.
Boomi’s new report on proactive cloud optimization strategies found why companies are fraught with uncontrolled and wasteful cloud spend in 2024. It also pointed out the role of Integration-platform-as-a-service (iPaaS) solutions in cloud cost remediation tactics. It was found that FinOps teams either introduced these tactics too late or without having a full picture of the environment.
So, we ask you: Are FinOps teams prepared to effectively utilize the current crop of Cloud Cost Management and Optimization or CCMO tools in their current environment?
Based on the latest trends, nearly three-fourths of global cloud customers (72%) have exceeded their budgets in the last fiscal year. By 2026, public cloud spending could exceed $1 trillion globally, which means Cloud management and FinOps teams must better utilize CCMO strategies to reduce spending. This is possible by adopting proactive CCMO strategies, even before the actual cloud development process begins at the earlier architecture level. Currently, only 65% of leaders are prioritizing CCMO tactics very early in their cloud development process.
Where do FinOps teams fail to plug their cloud spending?
Almost every organization knows they can optimize cloud costs at the early solution architecture stage. Then, why do FinOps teams fail with CCMO strategies?
I will point out three main reasons mentioned in Boomi’s report.
Reason 1: Leaders lack a proactive cloud cost remediation tool to manage their CCMO strategies.
Reason 2: While CCMO tools are useful, they are only part of the solution.
Reason 3: FinOps teams don’t use iPaaS solutions innovatively for Cloud optimization and modernization practices. 44% of leaders said lack of integration and overshooting consumption bandwidth are major roadblocks to their cloud remediation goals.
Four reasons that are driving Cloud costs in 2024
Four reasons are causing an increase in the cost of cloud workloads.
These are:
Excessive storage (52%)
Lack of integration strategy (44%)
Overconsumption of network bandwidth (42%)
Inefficient Cloud architecture (40%)
40% of cloud leaders surveyed for the report said they manage to contain costs at the solution architecture stage! To further complicate the situation, only 6% of decision-makers report their cloud cost remediation strategies are ever proactive. So, there is a clear lack of visibility, proactiveness, and effort to resolve the crisis. CCMO tools are only as effective as the users who utilize them at the early stages of the development process.
Ed Macosky, Chief Product & Technology Officer at Boomi believes these findings pointed to a lack of dependence on the iPaaS solutions in the cloud cost equation. In most cases, integration is completely ignored. Ed said, “When systems are disconnected and data is siloed, companies are only seeing part of their organizations’ cloud cost picture, and this lack of visibility impacts tracking and decision-making.”
Back to our question: Are CCMO tools and strategies effective?
Only 10% of leaders say CCMO tools allow them to fully maximize their cloud cost savings. Despite the help of CCMO tooling, leaders failed to track 40% of their total spending.
When used sensibly, CCMO tools could be a compelling choice for cloud users. They can track increased cloud usage and optimize costs to justify the ROI, making them great for cloud cost management and optimization.
However, a poorly structured CCMO strategy can dent existing FinOps goals for an organization.
In the cloud modernization process, it is obvious that FinOps leaders would accept a significant increase in their cloud spend. However, poorly executed CCMO strategies can lead to “uncontrolled and wasteful spend”, especially in scenarios where organizations are trying to improve digital experiences, creating new software, and adopting faster IT workloads and apps for hybrid practices.
INTEGRATION AND MODERNIZATION CAN HELP REIN THEM IN
Boomi found Cloud workloads would rise disproportionately compared to cloud costs, in the next two years. It is attributed to the growing cloud complexity that is expected to arrive. Most leaders stated data management and cost tracking as the biggest challenges in deriving an accurate picture of their company’s cloud cost. Egress charges, compute resources, and off-hours operations were other areas where leaders failed to use CCMO tooling effectively.
CCMO Challenges for Cloud Management Teams
FinOps teams, in all likelihood, haven’t heard about the importance of iPaaS solutions for enterprise cloud optimization and modernization practices. This leads to unnecessary incidents in governance and cloud sprawl.
According to Boomi’s report on CCMO tooling and strategies, misconfiguration of CCMO tools, and their recommendations prevent organizations from looking further left in the cloud architecture and development process for cost optimization. In a CloudZero report, 49% of organizations agreed their cloud costs are higher than the optimum levels, and only 3 out of 10 organizations knew where their cloud spending are headed.
Boomi found that 56% of leaders said CCMO recommendations are only as good as the data they ingest. 44% of leaders feel CCMO tools are inconsistent with the company’s reporting requirements. On the contrary, 19% of users don’t trust the native CCMO tools. With poor integration and recommendations from CCMO tools, 41% of respondents said they were unable to build cost governance into the architecture; 40% of user groups acknowledged they failed to fix the root problem of wasteful cloud spending.
All these point to the ineffectiveness of CCMO tooling in helping FinOps teams during cloud cost remediation strategies.
“More than half (56%) believe their CCMO recommendations are only as good as the data their company can provide. Yet 40% are struggling to fix the root problem of their wasteful cloud spend. The problem is integration is being viewed as a separate entity, when it actually has significant potential to act as a control layer in the reckoning of cloud costs,” said Macosky.
Having an iPaaS solution for cloud architecture development and modernization can improve efficiencies and reduce spend. Boomi, a leading iPaaS solution provider can solve CCMO challenges by connecting apps, people, and data in a single platform. With GenAI DevOps workflows coming into the picture, the importance of the integration platforms in cloud cost optimization and governance become even more important.
While CCMO tools and strategies can help cut back on cloud bills and reduce sprawl, FinOps and IT leaders should collaborate to bring iPaaS platform into the scenario. Currently, Boomi provides an automated self-managed platform to deploy synchronized changes to integration processes. This allows users to adapt to a hybrid FinOps CCMO strategy that can address the full-stack cloud technology spending across organizations at multiple locations.
Therefore, you can operate, modernize, and eliminate cloud wastage on AWS, Microsoft Azure, and Google Cloud by gaining full control of CCMO tools that are integrated with a reliable iPaaS solution platform for better results.
So, what are your thoughts on the role of iPaaS solutions? Do you think they can improve CCMO strategies and reduce cloud bills?
