Was Cloud FinOps von SAM lernen kann!


What Cloud FinOps can learn from SAM!

While many companies have had a solid software asset management (SAM) in place for years, they are often still at the very beginning when it comes to cloud financial operations (cloud FinOps for short). In this blog post, we will explain the areas in which Cloud FinOps can benefit from the experience of SAM and the special features of Cloud FinOps that need to be considered.

What is SAM and what is Cloud FinOps?

Software Asset Management (SAM) comprises the management and optimization of the procurement, provision, maintenance, use and phase-out of software assets in companies. SAM helps companies to control the costs of software licenses and maintenance, minimize compliance risks and maximize the efficiency of software usage.

Cloud FinOps (Cloud Financial Operations) aims to optimize the financial efficiency of cloud services. It is about capturing, allocating and optimizing the costs of cloud services to ensure that companies get the most out of their investments. Cloud FinOps comprises a range of strategies and processes that help to reduce the cost of cloud services while improving performance and reliability.

In which areas can Cloud FinOps benefit from SAM?

  • Transparency and profitability: SAM and Cloud FinOps pursue the same goals. Both require transparency about the use and costs of software licenses and cloud services in order to identify optimization opportunities.
  • Guidelines: SAM is familiar with the design of organization-wide guidelines for the contractually compliant and economical use of software. Adaptations to cloud services are obvious here.
  • Joint contracts: Cloud services are sometimes obtained via the same contracts as software licenses and subscriptions. SAM has many years of experience in negotiating and managing these contracts.
  • Familiarity with terms of use: Licenses that are the responsibility of SAM management are sometimes also used in the cloud. SAM provides FinOps with important information on what is contractually permitted and financially sensible.
  • Interdisciplinary teams: SAM is usually well networked within the company and knows the stakeholders from IT, procurement, legal, data protection and finance. Cloud FinOps can only work effectively if cross-divisional competencies work together.
  • Data analysis and reporting: SAM is familiar with large volumes of data, their normalization and the reporting of contract and usage-related key figures.

Where is further development required?

  • Central Cloud FinOps unit as enabler: While optimizations in SAM are very much driven by a central SAM unit, optimizations relating to cloud costs take place to a large extent in the cloud operations teams. The central Cloud FinOps unit acts as an enabler here with knowledge, methods and tools.
  • Cost responsibility: Responsibility should lie with the cloud operations team, who know their services best and can assess which services are required, to what extent and with what capacity, and for how long. Initially, this is not fundamentally different from traditional SAM, but the responsibility must be continuously exercised in order to achieve cost optimizations (see next point).
  • Proactivity: While optimizations in SAM tend to take place periodically, Cloud FinOps requires even more continuous monitoring of consumption. Cloud services are generally based on usage-based billing models, where countermeasures and optimization measures should be taken at an early stage.
  • Data volumes & evaluations: Usage-based billing generates a huge amount of data, which in many cases cannot be managed using Excel. Analytics software (e.g. Power BI), special tools from cloud providers or third-party providers are required for evaluation.
  • Cost levers: A significant cost lever for cloud services lies in the architecture and design of the services that are operated in the cloud. Standardization and platform independence are the keys to cost-efficient cloud services.

Companies that already have an established SAM can therefore benefit from existing approaches and transfer selected aspects to Cloud FinOps. Nevertheless, Cloud FinOps also requires further development of organization, processes and tools with regard to the characteristics of cloud services.

If you are facing the challenge of getting your cloud expenditure under control or want to expand your SAM with Cloud FinOps, please contact us.


Author: Felix Baran