LONDON, July 23,
2024 /PRNewswire/ -- Recent Omdia research indicates
that FinOps is a rapidly developing discipline that enterprises use
to control, optimize, and manage their cloud spending. The market
consists of established vendors from various management disciplines
and new specialized start-ups.
The cloud has experienced significant growth in both scope and
scale over recent years, with numerous organizations migrating to
leverage its flexibility and operational expense model. This shift
has set the stage for cloud computing to become the dominant
technology for the next decade. The cloud market has reached a
crucial turning point, with more than 50% of workloads now running
on some form of public cloud, marking the late majority adoption
stage, according to Omdia's IT Enterprise Insights: IoT, Cloud, AI,
5G, and Sustainability – 2024 survey.
The rise of FinOps has addressed initial financial concerns
regarding cloud computing by enhancing the understanding and
optimization of cloud costs. These concerns stem from the fact that
six cloud service providers (CSPs) dominate approximately 80% of
the market as highlighted in the Omdia survey.
Omdia's report further clarifies the FinOps sector by outlining
the key characteristics of a solution. The current market reality
is that the FinOps foundation is working to standardize cost and
usage billing presentations, allowing organizations to implement
consistent processes for data ingestion and analysis across various
cloud providers. This standardization will enable organizations to
compare cloud service costs across different platforms, although
FinOps solutions address the other key capabilities in diverse
ways. Despite these efforts, the market remains an emerging market
consisting of native cost management from cloud providers,
independent platforms, custom-built solutions (mostly XL
spreadsheets), and specialized tools.
Figure 1 shows Omdia's FinOps model, which we view
as consisting of two primary areas: cost management and cost
optimization. Cost management includes crucial capabilities such as
data ingestion, budget and cost management, analysis and reporting,
financial integration and automation, and data management. The cost
optimization area encompasses key capabilities such as cost
allocation and chargeback, forecasting, rate optimization, and
usage optimization.
According to Omdia's Chief Analyst Roy
Illsley, "the FinOps market is still evolving, comprising
new startups, large vendors developing FinOps capabilities, and
established vendors acquiring them. Omdia estimates the market's
value at around $1.6bn. Although
there is no current forecast for the FinOps market (expected in
2025), its growth is tied closely to cloud computing, projected to
grow at a 14% CAGR from 2022 to 2027. Given that FinOps is still
maturing, it is reasonable to assume that the FinOps market will
grow faster than the cloud computing market."
"FinOps vendors are developing solutions to autonomously manage
usage and rate optimization in using cloud computing. Yet, the
refinement of optimizing cloud-native Kubernetes deployments
remains an ongoing challenge for many vendors,"
concludes Illsley.
ABOUT OMDIA
Omdia, part of Informa Tech, is a technology research and
advisory group. Our deep knowledge of tech markets combined with
our actionable insights empower organizations to make smart growth
decisions.
Contact: Fasiha Khan
Fasiha.khan@omdia.com
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SOURCE Omdia