Executive Summary: ISG Provider Lens™ Public Cloud - Solutions & Services - Mulicloud FinOps Platforms - Global 2022
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ISG Provider Lens™ Public Cloud - Solutions & Services - Multicloud FinOps Platforms - Global 2022
Focus on optimizing and accounting for cloud costs
In today’s world, cloud adoption plays a leading role in ensuring enterprises’ business continuity, which enables key business initiatives. Enterprises are dependent on IT’s ability to deliver technology and solutions that provide differentiation in the market. The public cloud service market continues to grow, as observed in the previous years. This, subsequently, drives cloud costs; therefore, cloud cost management has been one of the top priorities of every enterprise. Many enterprises are finding it difficult to manage their cloud spending due to the complex and vast cloud ecosystem that a hybrid environment brings in. In such scenarios, FinOps platform vendors help enterprises of all sizes manage their complex global IT assets, while reducing the operating costs. These vendors leverage their vast experience in managing cloud infrastructure and assets with the help of several proprietary tools and platforms they have developed over the years.
Cloud cost management has been around as a concept since more than a decade, but it was not prominent until the last few years. However, organizations started to realize that cloud costs need to be optimized due to rapid cloud adoption, leading to uncontrolled and untracked use of cloud resources. The principles and frameworks of FinOps help organizations increase the business value of cloud by bringing together technology, business and finance professionals, with a new set of processes, to efficiently monitor and track their cloud resources. It also brings financial accountability to the dynamic and complex spending of cloud resources by organizations. Teams like IT, finance, product engineering and procurement work together for rapid product delivery, while, at the same time, gaining more financial control and predictability. A centralized FinOps team connects with all these distributed teams and collaborates them for a common goal. For any enterprise, the FinOps strategy is successful when decisions are made from a business-value perspective. When enterprises make significant investments in PaaS or IaaS capabilities, they need to link their cloud migration strategy with value metrics to a detailed cost visibility dashboard.
FinOps vendors are becoming more mature and improving their solutions in terms of labeling and tagging resources to better understand the costs incurred by specific projects/teams. It is observed that there is a large, growing partner ecosystem, consisting of vendors, global service integrators and community members, that contributes to FinOps initiatives. These vendors have significant experience in helping organizations with their FinOps journeys. Based on ISG’s estimates in 2022, the FinOps market is expected to grow at a rate of more than 30 percent year over year, and there are high chances that it will grow at a higher rate in the coming years.
With a rapid rise in digital transformations across enterprises of all sizes, we are seeing an increase in the demand for cloud migrations and transformations. Consequently, there is high demand for the cloud-related talent pool. There is fierce competition among service providers to hire the best talent in the industry. The candidates are being paid attractively to join their organizations. This increase in remuneration has hampered the margins of service providers, and this is trickling down to enterprise clients. Service providers have also initiated several training programs in the past years, as they have been informed of these demands by the analyst community; however, there is still a huge gap between the supply of and demand for cloud skills.
ISG has also observed that multicloud adoption has increased. Irrespective of the size of the business or enterprise, there are numerous benefits of a multicloud setup, but there are barriers as well. Orchestration is difficult because it has several moving parts and a complex setup to operate in a public cloud environment. Many users find it difficult to manage multicloud environments, citing complexity as one of the major barriers. Users are now adopting various tools to manage this complexity. Several providers have developed mature cloud management tools that offer hybrid and multicloud management platform for the seamless management of all cloud assets.
As the market becomes more mature, we will see large vendors/providers acquiring smaller FinOps providers and startups. We might also witness some mergers among smaller pure-play FinOps players that will come together to complement each other’s strengths. We also presume that several large service providers/integrators will come up with their own proprietary FinOps solutions, which will be sold to their clients mostly in a bundled cloud services deal.
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