The Only FinOps Platform You Will Ever Need: Our Investment in Finout
How Cloud Cost Management has become such a headache, and how did Finout develop the Enterprise FinOps Platform?
The global spend on cloud infrastructure is huge. Well, if you have started reading, this fact would probably not surprise you. But do you know how huge it is? According to Gartner, the global spend on IaaS and PaaS will cross $350bn (!) in 2024, and according to Mordor Intelligence, over the next 5 years it is expected to keep growing by over 16% a year. This is fast, really fast.
In fact, in most B2B software companies, cloud is today the second largest cost item, after salaries. But cloud spend is not limited only to tech companies- most modern enterprises spend massive amounts on cloud infrastructure, across almost any vertical- financial services, retail, media, manufacturing, healthcare- you name it. Cloud spend is huge, is here to stay (and grow!), and it has to be properly managed.
The global spend on IaaS and PaaS will cross $350bn (!) in 2024, and over the next 5 years, is expected to keep growing by over 16% a year.
But properly managing an enterprise’s entire cloud spend is not at all a walk in the park. Cloud bills are ridiculously complicated to read, even if using only a single cloud service provider (CSP). Given that an average enterprise uses 2–3 CSPs and a handful number of different PaaS solutions (at least!), having a holistic and accurate view of the entire cost of cloud is a big, big, headache. Full visibility into the cloud spend should support crucial business decisions, such as pricing, budgeting, architecture planning, roadmap prioritization etc. Yet, in most organizations it practically does not exist. And the result- significant waste, shrinking margins, and wrong decisions. Does it make sense? Hell no!
But to be fair, Cloud Cost Management (“CCM”) is not really a new product category. Companies dealing with similar issues started operating over a decade ago, and several success stories have already been written. This includes companies like CloudHealth (founded in 2012, acquired by VMware in 2018 for ~$500m) and Cloudability (founded in 2011, acquired for several hundreds of million dollars by Apptio in 2019, which in 2023 was acquired itself by IBM, for $4.6bn). Companies of this first generation had done a great job in providing the first layer of visibility into cloud spend, and excelled in dealing with simple use cases, limited amount of cloud providers, and low granularity. In addition, they created the initial market education, best practices and frameworks, and also coined the term “FinOps” (a portmanteau of “Finance” and “DevOps”, which stresses the communications and collaboration between business and engineering teams, and practically refers to cloud financial management).
In parallel, a common practice in many large organizations was to build simple FinOps tools in-house- a combination of automated scripts, dedicated data lakes and some fancy dashboards, to consolidate and present cloud bills, hopefully provide a few insights, and perhaps allow some anomaly detection capabilities.
All of these had worked well for a while. But gradually, things have become complicated… really complicated…
But let’s be more precise- what has changed in the way organizations use the cloud over the last decade? Here are few examples:
- In each CSP, the menu of available products and services has become much longer. In parallel- pricing models, and especially saving options, have become more sophisticated.
- Using a single cloud provider is no longer an option. Today it is clear that a deep multi-cloud architecture is a must for maintaining full availability and performance, as well as for optimizing costs.
- The rise of modern hyper-virtual deployment architectures, such as containers and serverless, has made cost monitoring a much more challenging task. Specifically, Kubernetes cost monitoring and optimization has become a key pain point for most modern organizations.
- Another layer of complexity has been created by the proliferation of PaaS, and of infrastructure-heavy SaaS solutions- huge product categories such as datalakes, observability platforms, and others, which effectively “bundle” software offerings together with significant infrastructure costs.
- And let’s not even get to the current revolution in AI services…
All of the above, and others, have caused the cost of cloud to be: (i) Larger; (ii) More fragmented; and (iii) Harder to capture and to properly allocate. As such, the first generation CCM platforms, as well as internally-developed solutions, could not address anymore the complexity of modern FinOps use cases.
The rapidly increasing complexity of cloud infrastructure made the first generation CCM platforms, as well as the commonly used internally-developed solutions, to fail in addressing modern FinOps use cases.
Consequently, over the last few years, a huge group of new point solutions has emerged. Such tools, mainly around cloud cost optimization, provided quick and very efficient fixes to extremely painful issues. In some cases, such solutions allow their customers to literally take money off the table within just a few hours of deployment, hence becoming a real no-brainer. Therefore, some of them were able to reach a very significant scale, and to do so very quickly.
Technical cost optimization is a must, but is simply not enough. Mature organizations are not looking to just generate short-term savings. They are eager to have a full end-to-end understanding of their cloud spend, to support long-term planning and decision-making. But, until recently, a holistic, modern, cloud cost management platform, suited for complex enterprise use cases, was still missing. And then came Finout.
Finout started its journey in 2021, with a very ambitious goal- to become this modern CCM platform that cloud spenders were still missing. It was not a coincidence- as part of their previous roles in cloud-heavy organizations, Finout’s founders, Roi, Asaf, and Yizhar, used to feel this pain first-hand. With their own eyes, they witnessed the lack of control over cloud spend, the shrinking margins and the loss-making customers which should never have got the commercial terms they had negotiated. To solve this, they decided to start Finout, and three years later, it seems like they nailed it.
Finout seeks to provide a FinOps operating system, delivering a robust set of features to manage and optimize cloud spend. But what does it practically offer? Here are a few highlights:
- MegaBill- a sophisticated observability layer- the single pane of glass into an organization’s entire cloud spend, based on deep integrations with the leading cloud service providers.
- Virtual Tagging- the most advanced cost allocation layer out there, allowing users to accurately allocate their cloud costs by whatever matters- region, product, feature, team, customer- and providing smart engines for allocating shared resources- just choose and apply, in no time, and with no code.
- Dashboards- fully customizable dashboards layer, allowing you to truly democratize FinOps, to address any use case and any persona, from engineer to C-level.
- CostGuard- a cost optimization layer, including anomaly detection with push alerts and reports, commitment manager, automated insights into saving opportunities, and powerful Kubernetes rightsizing capabilities.
- Budget and Forecasting- a monitoring and prediction layer, allowing customers to make sure they keep their costs within their own limits, and making their life easier in planning the spend in the next months and years to come.
Finout started its journey in 2021, with a very ambitious goal- to become this modern CCM platform that cloud spenders were still missing. Three years later, it seems like they nailed it.
We already mentioned that Finout was blessed by a strong “founder-market-fit”. But apart from being highly knowledgeable about their area of operations, Roi, Asaf, and Yizhar, were also highly successful in many different areas. They excelled in defining the right product architecture and roadmap, in listening to their customers and prospects and in focusing on what they care about the most, and in building a clear long-term vision for Finout. They created a strong, and super fun, brand, and assembled the right G2M organization to execute on it (and boy, they execute!). They have also put together a team of strong, hungry, and humble people, to build the Finout space cruiser on very solid foundations, and to make sure to prioritize diversity right from day one. All of these are an extremely rare combination, one that we would wish to meet more in founding teams.
Accordingly, Finout has steadily become THE leading next-gen vendor in the FinOps space, attracting tremendous traction among some of the world’s most impressive tech companies, and growing at a pace we have not seen since 2021. But frankly, it’s not us saying this, these are Finout’s customers- go and look for yourself.
In light of all of the above (and more), Maor is proud to take part in Finout’s latest $26m round, and to collaborate once again with our friends at Red Dot, Team8, Jibe Ventures, and Pitango.
We look forward to our joint journey in the realm of cloud!
Want to also better understand, control, optimize, and plan your cloud costs? You should definitely check Finout.
