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InfoQ Homepage Podcasts Roi Ravhon on FinOps, Application Unit Economics, and Cloud Cost Optimization

Roi Ravhon on FinOps, Application Unit Economics, and Cloud Cost Optimization

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In this episode, Roi Ravhon, co-founder and CEO of Finout, sat down with InfoQ podcast co-host Daniel Bryant and discussed the emergence and industry adoption of FinOps. The conversation covers topics such as the benefits of adopting FinOps, the typical journey of an organization interested in learning more about cloud costs, and a range of cultural and tooling required for a successful implementation.

Key Takeaways

  • FinOps is focused on enabling engineers to become more aware of the associated running costs of the application they are designing and building.
  • The ultimate goal of FinOps is to get everyone in the organization to understand how much it costs to run the applications (typically) in the cloud. This can enable internal chargebacks for services consumed and help the organization understand the unit economics for its externally available applications.
  • Much like how DevOps is typically implemented, a team can’t buy “FinOps in a box”. Adopting FinOps requires organisational (cultural), process, and technology changes.
  • Tooling adopted as part of FinOps can be categorized into three categories: cost visibility, cost optimization, and point solutions (for specific tasks).
  • The FinOps Foundation is a place for practitioners to advance their careers by connecting with others and learning about best practices and specifications.


Welcome to the InfoQ podcast

Daniel Bryant: Hey everyone. Before we get into today's podcast, I want to share that InfoQ's International Software Development Conference, QCon, will be back in San Francisco in the US from October 2nd to 6th. QCon will share real world technical talks from senior software development practitioners. You will learn about their successes, their failures, and you'll also see how to apply emerging patterns and practices to address some of your challenges too. Learn more at I'll be there running the platform engineering track, and I hope to see you there.

Hello and welcome to the InfoQ podcast. I'm your Host, Daniel Bryant. And today I'm joined by Roi Ravhon, Co-founder and CEO of Finout, where we discuss the topic of FinOps. I've increasingly been bumping into this concept from content created by the FinOps Foundation, from sessions at the recent QCon Amsterdam and QCon New York events. And it was also mentioned by InfoQ Editor, Steef-Jan Wiggers, in our recent cloud and DevOps trend report.

I've read several excellent articles by Roi, and so I wanted to reach out and learn more. In this podcast, we cover a range of topics starting from what FinOps is. We then move on to how to adopt FinOps, both from a technical in the trenches and also a leadership perspective. And then we explore signs of successes. This includes the ability to understand your applications and systems unit economics, which ultimately helps with creating architecture guide rails, scaling systems, and ultimately generating more revenue for your company.

So welcome to the InfoQ podcast, Roi. Could you introduce yourself to the listeners please?

Roi Ravhon: Of course. My name is Roi, I'm a Co-founder and CEO of Finout. I live in Israel. Started my career, like many Israeli entrepreneurs, in Israeli intelligence units. Then spent a lot of time in the high-tech industry and now leading Finout, which is a cloud cost management company.

What is your definition of FinOps? And how does this movement impact the industry? [01:37]

Daniel Bryant: Fantastic. So we're hearing more and more about FinOps. It's popped up in several of our trend reports. For listeners that haven't heard about this, can you share your definition, your view of what FinOps is, what it means and what the impact would be?

Roi Ravhon: Yes. So FinOps is a new name to something we always knew and knew how to do from the beginning of the cloud. But a couple of people, named J.R. Storment and Mike Fuller that works in Atlassian, worked on codifying FinOps concept and methodology. And eventually, there's a whole book and a whole foundation behind FinOps.

But if I have to sum it up into one sentence, is to get engineers to be more aware of their spending, and eventually getting every single person in the organization all around how much money does it cost to run the application in the cloud. So it's not only about saving money, it's about education, it's about making more money out of each dollar that we're spending and allow us to grow healthy and make sure we get the bang for our bucks that we pay.

What do you think is the main challenge that drives the adoption of FinOps?

How does FinOps relate to DevOps? [02:39]

Daniel Bryant: Fantastic, Roi. A bunch of things that I'd love to dive into as we talk. I think the first thing I often hear to folks is how does it relate to DevOps? And I think it's purely because it sounds the same, FinOps, DevOps? What's your thoughts there, and how the two things play against each other?

Roi Ravhon: So if you look back at DevOps 10 years ago and we would try to get engineers to be responsible for their coding production, people will look at us like we're mad, right?

Daniel Bryant: Yes.

Roi Ravhon: I'm coding and throwing it in the operation teams and I hope that everything will be okay and I'm not going to be the one waking up at night if it's not. And then DevOps came in and DevOps, it's a movement that evolved into a role, that essentially allowing engineers to have all the tools that they need in order to be responsible for the code in production and make sure we're getting it.

I think FinOps is drastically different, but still lies the same set of basic concepts. So if I would talk to you three years ago when I would tell you that the engineers are going to be responsible for their costs of their service in production and you're going to get the alert when they're starting to lose their cost model and the unit economics are breaking, no one would believe.

But now we start to see this more and more of a reality, of FinOps noticing treatment as DevOps in many organizations from something, one initiative of someone that tries to pull it off into dashboard of cloud cost and engineers actually caring about the cost of their service, the same as they care about SLA now and TVs that are showing tables and gamification of what's the most costly service or whatever.

It really starts to become a fundamental shift within the organization relationship with cloud financial management and suddenly not something that only finance caress about and starts to nag constantly about, like what's happening, into something, it's a cultural change that we see lots of organization going through, which is very similar to what DevOps did.

What do you think is the main challenge that drives the adoption of FinOps? [04:26]

Daniel Bryant: I love it. The culture. We have like CALMS, the acronyms in DevOps and the “C” in CALMS is very much related to culture. So I love it. You mentioned a bunch of things there. What do you think is the main challenge that drives the adoption of FinOps?

Roi Ravhon: We see different organization behaving very differently when it comes to FinOps adoption. So it can be an enterprise that is now migrating to the cloud and continue with their digital transformation roadmap. And something that press often discover is that they're not really adapting to the cloud, rather building on-prem infrastructure on AWS. And once doing that, they start to figure out that things are a lot more expensive than they hope than benchmark because they're not properly using cloud technologies as they should have. So it's like the first step or step and then they need to have to adapt and someone higher up gets all annoyed. They're like, "What's going on here? We need to start taking cloud costs seriously and someone needs to have to be responsible for it," but it can also be coming from the bottom. So engineers that were exposed to FinOps and they have that initiative of like, "Hey guys, I think we're spending too much money on the cloud. We can be more efficient."

Looking at the company, looking at the P and L coming from finance, cloud costs for lots of the software companies is the biggest expense that they have in the cost of sale. The second-biggest expense of the company after salaries. And for years we were thinking of cloud cost as just a tax, something we have to do, something we need to spend. And once the organization starts to change the conversation from spend into investments, it starts to get a lot clearer that we need to measure the ROI. So we're investing money in cloud and we need to measure how much money we get back out of that. So it can be someone from the executive team and it can be as slow as an engineer that got exposed to it and really caress about what's happening. So we see FinOps starting with all shapes and sizes, but it's really fascinating to see that evolvement.

Why has the adoption of FinOps increased recently? [06:18]

Daniel Bryant: That is fascinating. I hadn't thought about the bottom up or top down, but we saw the same thing in DevOps, as you said, in terms of, sometimes it was a C-level transformation project. Sometimes it was very much like, to your point, developers getting sick of throwing stuff over and getting it thrown back. They wanted to take more charge of it. Fantastic. I'd love to explore why FinOps is getting more popular now. You hinted DevOps, what been 10, 15 years around? FinOps, I've heard the last few years, I bumped into, actually Simon Wardley, I think was the first person that put it on my radar.

I always look at what Simon's doing because he's totally ahead of the curve and he was talking about FinOps or the concepts, at least, pretty much when DevOps was becoming a thing. I know some of the early work he did with the Zimki platform and other things, he was always thinking about the cost model as you've talked about there. But why do you think the zeitgeist has captured the FinOps movement now? Is it the end of the free money? Is it the end of the zero interest rates, the VC dollars drying out or is it some other thing that I'm not seeing?

Roi Ravhon: Yes, I think it's a combination. That to be honest, we see FinOps in 2022, 2023 jumping off the roof. Just look at the Google trends graph of how much people are looking at FinOps to see what's happening to the FinOps foundation, it's members and community that is evolving. It's amazing. I think that most of the Fortune 50 is now part of the FinOps Foundations member. So it's starting from a niche thing that when you raise the serious seed for FinOps like two and a half years ago, we went through this season, we tried to convince them that FinOps is actually a concept that people care about it. We went through LinkedIn and search for everyone that has the FinOps title in its name. And in the last couple of years we see FinOps have become a profession. It's became really a huge thing.

We just came back from the FinOps X, which is the yearly conference by the FinOps Foundation, like 1,200 people traveled all the way to San Diego to participate and exchange thoughts and starts to get into a huge community that really fundamentally changes the way that we approach that. So I think it's a combination of both, more awareness. So people are aware that cloud is expensive and they want to treat it with the desirable respect and also downturn. And as you mentioned, the error of free money is over. And once we did everything we can in order to... We went through layoffs as an industry and a cutbacks for whenever possible, and this is the immediate term kind of thing, but if we're selling a product that is low margin, there's very little we can do without improving that margin and firing more salespeople is not going to help.

It's going to do the exact opposite thing. So we then need to start to react to reality. So we need to understand the actual underlying infrastructure, how much money do we spend on everything? How do we measure lifetime value of our accounts? And it's just not the money they're paying, it's how much money it costs us to hold them. And I think that more and more companies got the realization that cloud cost is just something that we have to handle and I don't see it going away anytime soon.

What would be a typical trigger for an organization to adopt FinOps? [09:03]

Daniel Bryant: Fantastic. As we head more into some of the solutions now, what would be a typical case study or a typical trigger for organization adopting FinOps?

Roi Ravhon: Something that I saw in multiple organizations when talking to finance, they'll continue to run a complicated analysis on P and L and FP and A processes; and at some point they tend to discover that cloud cost is growing unproportionally to the revenue. You can hide it as much as you want, but eventually economy of scale is not just kicking in without you doing anything about it. If you continue to spend, you continue to not care about anything you're doing, you can't hope to wake up one day and figure out if unit economics are okay.

We saw this as a trigger from an organization that they really understood that something is not working and cloud cost became a board level discussion with many of the companies and it's not something we can continue to ignore. It's something that we have to start to face reality. And Flexera ran an amazing server in 2023 and the cloud cost was the biggest problem for both enterprise and SMB. So it's no longer security or no longer fear of the unknown. This is the number one priority for many enterprises and high SMBs out there and just something that need to be solved.

Do organizations simply want to buy FinOps solutions? [10:20]

Daniel Bryant: Fantastic. How do organizations typically go about solving these problems? And I'm thinking back to my DevOps days where people wanted to buy DevOps in a box. They still do. Sell me some DevOps. Do they want to buy FinOps solutions and how does that actually relate to, you mentioned, culture already, what should they be doing as well?

Roi Ravhon: Yes, so 100%. We constantly get on calls with customers and just want to buy FinOps and we're like, "Great, but why do you want to do? Why do you want to achieve?" "Oh, no, I want my engineers to care about cost." "Great. Buying a tool is not going to help you with that. Let's start to work on the culture and let's talk again in a couple of months." But there's a bunch of magic solutions we can do on cloud spend. So you can buy a tool that's going to optimize your commitments. You can buy a tool that can help you right size and identify waste. You can buy a tool that rate visibility in the organization. So there's a bunch of different things we can do or buy a FinOps in a box, but eventually it's not something we can do without proper organizational alignment. So people need to care about cloud costs.

And going back to the FinOps Foundation and FinOps X, I think lots of the tracks that were about how do we get engineers to take action? How can we encourage that culture within the companies? It's one of the biggest tasks that the companies have to go through. We can give the best tools, the best dash boarding, the best reporting, anomalies, alert, whatever. But if there's not going to be anyone that's going to care about, if engineers are not going to be responsible for what they're doing and they'll look at FinOps as another bug that they need to get off their shoulder when it's constantly asking them about the stuff that they did, it's just not going to work because eventually engineers, in the modern shift, left era, engineers have the power.

If someone from finance is going to ask engineer, "Why did you buy those new three-letter service from AWS and whatever?" So they can continue to use any technical mumbo jumbo, they can throw in scary words into the conversation and finance can't really deal with it unless we start to measure a metric that we both agree on. Like 5% increase at AWS can be good regardless of a revenue growth. And if we don't have a standardized way of agreeing on that, and if we don't have that built in collaboration, engineers really takes finance questions into consideration and finance believes engineers with what they're doing, it's going to be extremely hard to do anything just by buying a tool.

Much as we saw with DevOps becoming a role, is this the same with FinOps? Are there job adverts for FinOps engineers? [12:27]

Daniel Bryant: Totally makes sense. Something I heard you say there is, it's always that collaboration and we have seen rightly or wrongly the role of the DevOps engineer pop up. And we also say it's not really a role, it's more of a philosophy, set of practices, but it is what it is. Are you seeing FinOps roles popping up? Is there an equivalent FinOps engineer, can I legit look on LinkedIn for that role these days?

Roi Ravhon: 100%. So really the same as DevOps. So it's a philosophy that have evolved into a role. Same as DevOps, you're going to guess 10 different FinOps engineer, what your day-to-day life? You're probably going to get 15 answers, but it's running the same set of tracks. And FinOps is evolving, as I mentioned before, in lots of enterprises. It started as a cloud center of excellence, have evolved into FinOps. Also important to note that FinOps is not the only philosophy on how to run cloud costs, the same as DevOps and SRE. So there's AWS has their own, Azure has their own things. There's a bunch of a smaller, less popular books that were written on the subject. So some cloud financial engineers, some will call it, there's a bunch of different wording here, but FinOps is started to get adopted as the most common trend, yet not the only one.

Are there common metrics related to FinOps? [13:32]

Daniel Bryant: Interesting. And having a smile there when you mentioned about 15 different engineers, 15 different roles, because I totally relate to that. When DevOps was a thing, everyone did very different things, but we did also align around, say, what became the DORA metrics or the Accelerate metrics that was often your North stars, so lead time to delivery, MTTR, et cetera. Are there common metrics emerging around this FinOps concept as well?

Roi Ravhon: Some are easier to track than others. As an example, usually lots of FinOps engineers are going to look at their coverage, like a percentage. So how much of my infrastructure is running on demand versus how much is committed? This is a golden number that each organization could tweak on its own, but it's a metric that FinOps can be measured on. Issue with cloud cost is that it's supposed to be relative to the business. So unlike MTTR, which we can define just one number and we should expect to reach it regardless of how much money do we sell. And in cloud cost it's not the right kind of metric because if we'll spending a million dollars on AWS, it's good, 2 million is good, half a million is good, it depends on what. So where we see the North star in lots of FinOps practices, and this is the dream that many FinOps teams are striving for is what's called unit economics or unit cost.

And it's something very changeable, but for the sake of this conversation. So for example, we don't want to see how much money we spend on AWS, we want to measure how much money we spend per event, click, transaction, gig, user, something that is tangible and going back to engineers and finance relationship. So 5% increase in AWS, again, is meaningless, but if we know that we spend 5% more to AWS, but our unit cost remains the same, so it's okay, it's perfectly viable. And looking at long-term budgeting, it's also a huge concept here that can really fundamentally change the way that companies approaching that. Because again, if we budgeted the $2 million a year for AWS, but in the middle of the year we signed a huge customer to just doubled our revenue and something we'd never planned and budgeted for.

We need to buy more infrastructure in order to handle that. So we are going to get off budget. So who is accountable for this budget? So should we, as engineering, sacrifice stuff from our playground and innovation budget in order to deal with this customer? So things starts to get weird here and what we see the most advanced companies are doing is budgeting on gross margins and budgeting on unit economics better than the actual numbers.

So engineers do whatever you want as long as we keep 80% margin, whatever you need. So build, change cloud, change technologies, do whatever you want. It's okay to pay more money for the cloud cost because you need to support more infrastructure. This is on you, but you're targeted on margin. If you're going to hit that margin, you're going to fire a bunch of people, you're going to lose headcount. There's something that we actually see, lots of organizations starts to condition cloud efficiency with headcount. You can either spend money on cloud or spend money on headcount, but you can't do both. So you want to hire more people, great, get more efficient.

What is the key indicator that folks have successfully adopted FinOps? [16:20]

Daniel Bryant: So what's the key indicator that folks have successfully adopted FinOps? Is it the development of understanding of the unit economics?

Roi Ravhon: I don't think there's a singular point in time where people can say, "All right, we did FinOps." So FinOps is always evolving because cloud is always evolving. There's always new stuff to do and always new technologies. And unlike data centers, cloud environments are extremely volatile and constantly changing. And AWS is releasing new pricing or a new service or a new tool and suddenly we bought that Datadog and we bought Snowflake and Mailchimp, and Twilio and Akamai and Stripe. There's so many more solutions that get into this problem as well. And we continue with our digital transformation, continue to moving CapEx to OpEx, like organization changed constantly. When you can say that you're doing DevOps, you succeeded with DevOps. It's not the real tangible point in time. Rather like an ongoing philosophy and journey that the organization is going through.

What is the typical journey of an organization adopting FinOps? [17:10]

Daniel Bryant: Fantastic. And I know you and I chatted the other day about a lot of things around, say, chargebacks and unit economics and along the journey. What would be a typical journey? Because I think people, they can probably see the unit economics argument, but it might take them a while to get there. What's some wins along the way on the journey that people typically see when adopting FinOps?

Roi Ravhon: You mentioned that a second ago. Showback and chargebacks are one of the biggest challenges for enterprise running on a multi-cloud, multiservice environment. So companies are usually reliant on AWS tags in order to run proper showback and chargeback. And unfortunately this model is very easily breaking. So it's enough that we run an organizational change. So one group is moving from one business unit to another and now we have new researchers that are not tagged and tagged on the future looking and even if we build the entire thing now we adopted Kubernetes. So Kubernetes is another level of obstruction on the cloud cost and we don't have anything. And we went through a movie cloud, movie service. So showback is one of the most fundamental concept we see with lots of organizations. It's one of the first items that our organization wants to reach. We want to allow each engineering director to be the budget owner for your spend.

As a centralized IT team, we want to charge back our internal customers with their data about consumption. As a finance organization, we want to map our cost centers, understand profitability, even what's Cox and what's not Cox, what was a part of the infrastructure that was responsible for actually relying on supporting the product. It's a fairly difficult question running on a multi-cloud, multiservice, especially with Kubernetes environment. So we usually see those sets of challenges as one of the first, but afterwards continue to get really, really dependent on the organization. So some will go all the way in automating changes and optimizations, a lot will struggle with getting engineers to take action. So for example, we found an idle database, great. Can we turn it off? Who's the one responsible for even giving us the thumbs up? And defining those organizational alignments is very hard. The bigger the organization is and the more mature they are with their consumption, meaning that they're running for so many years without anyone attributing stuff.

And budgeting and forecasting is also a huge theme and issue. When running and working with AWS, we usually closing some sort of enterprise agreement discounts agreements with them. So we need to understand what's our consumptions going to look like for the next three years. We can barely estimate how we're going to end the month and now we need to think three years in advance. So what's the forecast? What's the best pricing we can get, on which services we want to fight hard with the CSP to get a discount and which services we don't really care about. So there's a bunch of stuff here that are getting into that concept and it's getting multiple different stakeholders in the organization. So from finance to engineering to FinOps to procurement to DevOps to RevOps or, so many people working on that and really depends on the maturity of each on what's going to be the next challenge that the FinOps team is going to tackle.

Who is accountable for the work related to supporting FinOps? Platform teams? Developers? [20:05]

Daniel Bryant: Fantastic. Great overview there. Touched every aspect of the business, which is fantastic. If we dial it back for our listeners now, probably the architects, the senior technical folks, and we have listeners that are developers, listeners that are platform folks, who typically does the work in the org, Roi, because you mentioned there some of the stuff, more cost of goods is more dynamic spend? Developers making choices about what they're doing. But some of the stuff is just platform, right? You have to have it running because that's a steady stage, fixed cost, effectively. How does that dynamic typically work with developers and platform engineers? Who does the work, who is accountable, I guess, for some of that?

Roi Ravhon: Going back again to the culture and collaboration. So if a FinOps engineer is going to work on allocating their entire organizational spend, probably not something that can actually work. And we need the support of the engineers, they know the system best. We need support of the architect, they know what's responsible for everything. And it's not always as trivial as we hope it to be as well. So maybe it's an entire Kubernetes namespace or an instance that can be allocated fully to a team or a customer.

But what's happened on shared databases, what's happened on shared storage? So when we start to get into those more complications, it starts to get harder and harder and we just need to get someone in organization that really understand what's happening in order to create that collaboration. It's usually a multi-tier, multi-level approach. So we start with something small, we start with just one department and then we continue with our location ranges. So we see the more advanced companies on the 90 plus range, getting to 100 is extremely difficult and based on the maturity level we start to increase and increase and increase our allocated range of the cloud spend.

Can you share a case study of FinOps adoption? [21:38]

Daniel Bryant: I'd love to dive into some tools, and I appreciate you can't buy FinOps in a box, but we'd love to cover your opinion on some of the tools. But before we do, is there any case study that jumps to mind of, say a typical, and I appreciate that's quite hard in itself, but a typical company adopting FinOps, maybe you can even talk about a case study, an actual named case study. I'd love to understand and help the listeners understand what a journey looks like for an enterprise, a big-ish company.

Roi Ravhon: When I think specific names or technology... I can talk about in general stuff that we see with some of the companies that we're working with. So usually for the bigger companies they always have more than one cloud. So they have a primary cloud, they have a secondary cloud, lots of the time third and fourth and fifth clouds even. We see lots of companies running down the track and now they're using a one data warehouse, they're using one observability system, they're using one CDN. And even the question of how much money are we spending on our cloud? That cloud environments is a huge thing and the first thing that they're trying to solve. So how much we spend on storage, how much we spend on compute, how much we spend on cross-cloud Kubernetes. So all of these are fundamental questions to the business that are very hard to answer without us helping companies to achieve that level of visibility.

Then the cost of location challenge is usually the second one that companies are trying to tackle. So oftentimes the centralized IT department is the one that buying those FinOps tools because they're the one that are spending their budget on cloud spending and technology and because they can't use appropriate showback and chargebacks in order to relieve that budget from the quota and assign it to the actual themes. It's a organizational political thing, but it's still a major challenge. And eventually what you start to see is that lots of finance departments has endless questions on what's happening. And how much you pay for this team, how much you pay for this customer, what's a margin, what's our cost, what's our whatever. And lots of our case studies are focused on giving finance the proper organizational picture and allowing to give those numbers without having to spend a week, a month creating complicated Excel sheets that just never ends.

And obviously almost every company that you work with also wants to lower down their cloud spend. It's a trivial thing to do and to want and we see great success with companies that never paid any attention to cloud spend getting all the way to 45 up to 50, even a percentage of cloud savings. It really depends on their maturity and the average save that we have with companies, even the mature ones are over 30%. So there's always stuff to find, there's always changes that need to be made and with progressing through the maturity model off of the FinOps foundation, you're getting better and better and better with what you're doing and while doing that you can save a lot of money and then the challenge comes to keep it down and keep your unit economics effective, but it's something that needs done. It's constant monitor, but this is a common FinOps adoption story that we see in the market a lot.

Can you recommend some categories of tools that would help with the adoption of FinOps? [24:26]

Daniel Bryant: Thanks, that's super useful. And I don't know if you want to name any names or folks that's more on the categories, but I'd love to know what tooling exists. And I was looking around and you and I've chatted a little bit before, there seems obviously like the visibility aspect, observability, there's the data analysis and there's how do we handle cost projection and capacity planning, all that good stuff. Have I roughly got those categories right? Do you think there's interesting tools that are worth mentioning in that space? I'd lean a little bit more towards the open source if that's possible as well, but I'd love to get your thoughts on what tooling is the really defacto tooling in those spaces.

Roi Ravhon: So we start to see the line blur from one tooling to another. It's common thing to do in a hard space, but we can differentiate the tools roughly into three groups. One is visibility, so solutions like FinOut like CloudHealth, like a Cloudability, like a CloudZero. So there's also the tools that helps with showing and allocating cost to the organization. Then there's the optimization side of things. So there's a bunch of different techniques on how to help to optimize cloud spend. So you can see solutions like Prosper Ops or Zesty that helps with commitments. CloudFix that help with remediation of changes, granulated Intel budget plays around with the IO scheduler of the instance in order to achieve high level of efficiency towards a bunch of those. And then there's the point solution. So solution that just solve one thing and does it well, most prominent one will be Kubecost that also has an open source version on how to analyze Kubernetes costs.

In terms of open source in general, so there is one initiative throughout the world is called OpenCost, which is mainly sponsored by Kubecost and being attributed by multiple different providers, that is working on creating proper open source tool for cost management. Fairly limited but widely used, but it's still there. There's the new initiative by the FinOps Foundation, which is super interesting. It's called FOCUS Group, which tries to create a standard of cost reporting across different vendors. It's something that is very hard now for organization that they're not using solutions like FinOut is to create this schema of what's cost, what's compute, what's storage, what's whatever, and doing multiple different times. And then they need to speak with a specific terminology of each cloud vendor to get their specific reporting, create ATL processes in order to map it all the ways that they can actually reach one Excel and ask one question. So the FOCUS Group is working on creating that standard, which is super interesting and really looking forward to see the results of something that I think the entire industry is waiting. There's also lots of political things.

Daniel Bryant: No doubt.

Roi Ravhon: AWS is currently out of this program. So AWS going to get in, they're going to contribute. Who is even the one that's contributed? Are they actually going to implement it or not? There's going to be an interesting couple of years now with the adoption of that, but as a community this is something that everyone demands and I think it's going to be extremely interesting.

Daniel Bryant: It reminds me a little bit actually of Open Telemetry, the Open Telemetry in the observability space. I remember the Open Telemetry was merged of two different competing foundations, our organizations and then using other clouds going to adopt it. But now everyone's like, "Let's not compete on the protocol, let's not compete on the schema, let's compete on the actual tooling." So that's interesting to see the maturity of the FinOps space is moving towards that, by the sound of it.

Roi Ravhon: The FinOps Foundation is organized under subsidiary of The Linux Foundation. So I think there's lots of lessons learned and the proper people there that can actually help with achieving those kinds of standards. The industry deserve that. Another concept that I personally would really like to see resolved is entire carbon emission issue. So not the cloud providers are not really reporting it well and even if it does, it's not standardized and can easily change and are not easily justified and are really... Like FinOps foundation as well trying to create this standard of mission reporting that I really want to see the hyperscalers actually implement so it can consume costs and it can consume emission, which is not necessarily the same thing. So it's also going to be extremely interesting, I think.

What is the FinOps Foundation? [28:07]

Daniel Bryant: That's fantastic. There's probably a whole new podcast we could do there on the emissions stuff because that's come up several times in our trend reports. Listeners are really interested about impact, their organizations are happening. So I'll leave it there. That's fantastic. Thank you for that. That's fantastic insight into the dynamics between those things. You've mentioned the FinOps Foundation a couple of times. I'd love to dive into them a bit more. You mentioned this, the Linux Foundation. I've done a lot of work with the Cloud Native Computing Foundation, CNCF, and they have done some amazing skeletons and foundation work around organizing governance for projects. That thing going forward. There's definitely a lean in the CNCF more towards end users now. So the people actually consuming the tech. I'd love to know where the FinOps Foundation stands. Is it mainly folks vendors like yourself or is it mainly end users? Is there a mix of folks going on? I'd love to know a bit more about the FinOps Foundation in general, actually.

Roi Ravhon: Yes, so I think The FinOps Foundation is doing an amazing job of balancing between the two. So first and foremost, it's a practitioner space. So it's a place that all The FinOps practitioners are organized, vendors are there as well, but only as contributors. There's Slack channel and vendors are, you can get anyone with a quota in, you can pitch your product, you can do any sales pitch if you want to participate. Great. Just do it as a vendor. So I think vendors have great way of helping that community. So as an example, we were part of a working group that was organized under The FinOps Foundation that tried to come up with a standard for Kubernetes labeling for cost management solutions. So part of the stuff that other than contributing from an knowledge, we ran an analysis on all of our accounts and ran anonymized dataset into what people are actually using.

So we have the data and we can contribute it for the community to make the community better. So it's a great organization that really helps getting the practitioners together with the vendors in a very neutral environment. And when it makes sense, vendors are giving the stage in order to showcase what they have to offer for practitioners to choose the right tool when they need to and understand what's happening there. But it's mostly a practitioner space, them growing amazingly. There's a website that really organized the entire thing. It keeps on updating, FinOps is something that's live and breathing. And I think for everyone that wants to start with the FinOps journey, is the best place to start.

Are the FinOps Foundation certifications valuable? [30:10]

Daniel Bryant: Fantastic. I'll put that one in the show notes, for sure. I did have a look before and I saw there was some certifications there. Are they good? Personally my experience, I did my Java certifications back in the day and I've done my AWS certifications as well and I found them a really useful learning tool in addition to getting a certificate that then when I go for a job makes it a easier, right. Are the FinOps certifications worth doing, do you think?

Roi Ravhon: Yes, so been investing a lot in building certifications. So I think two years ago there was just one certified FinOps practitioner and now there's a FinOps Professional and there's a bunch of different trainings for engineers, for finance, for procurement. So it's very interesting to see how it's evolving and in general, I think that obtaining a certificate is a great first place to start. Like the basic certificate, this is a rundown of the basics and if you have the certificate, it's something that people can trust you for having the basic level of conversation that they want you to have. So I really believe in it, by the way, we encourage every Finout employee to achieve that certification just because you're going to be a better product manager if you get a certification that understand what your target audience is working on. And support engineers and Finout obtain the certification because when FinOps engineer wants to talk to them, it's very important for us to have this sets of terminology.

I have a FinOps Certified Practitioner, I really believe in it. So I think it's a great thing to start. It's a great way to understand the community that you're getting into and the more advanced stuff that FinOps Certified Professional is like there's a classroom that you need to attend, you need to contribute to the community and there's very few people that have it and those are the ambassadors that are the best and that the true professionals that the entire community knows and can consult with. So I think it's a great thing that they're doing.

Daniel Bryant: Fantastic. I really love what you said there about the common language because I think that's really important. DevOps, I think, struggled for a while in not having that common language, but if you get everyone on your team speaking the same language, magic can happen then. Right?

Roi Ravhon: I agree.

Thanks for joining me on the podcast, Roi! [31:55]

Daniel Bryant: Thanks so much for joining me, Roi. It's been a fantastic tour de force, the 101 level, the getting started at FinOps. I know I'm keen to learn more. I'm bumping into it more and more in the work I do and definitely we're bumping into it more and more in the InfoQ trend reports as well. So thank you very much once again for your time and I really appreciate all the knowledge you've shared.

Roi Ravhon: Thank you so much, Daniel, for hosting me here.

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