Survive in the AI ​​era! Optimize cloud costs wisely with FinOps

"The road to becoming an AI creator | Article introduction" Cloud on the verge of bankruptcy? ! 😱 Optimize your IT budget wisely in the AI ​​era with FinOps! We will thoroughly explain the secret to reducing cloud costs. #FinOps #CloudCost #AIBudget

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Revolutionize cloud cost management! Optimize your IT budget wisely in the AI ​​era with FinOps

Hello, I'm John, a veteran IT writer. Recently, I often hear people say, "I introduced cloud services, but somehow the bills are getting higher and higher and I'm worried..." In particular, AI technology has evolved remarkably recently, and the role of the cloud that supports it is becoming increasingly important, but at the same time, the concerns about cost management are also getting worse. But don't worry! Today, I'd like to introduce a powerful ally that can solve such cloud cost problems, "FinOpsI will explain the concept and practice of this in an easy-to-understand manner, even for beginners, while also including its relevance to AI technology.

Basics: What is Cloud, Cloud Costs, and FinOps?

First, let's review the basics.

What is Cloud Computing?

"Cloud computing" (abbreviated as "cloud") is a system that allows you to use computer functions (servers, storage, databases, software, etc.) via the Internet. You can use resources as much as you need, when you need them, without having to own an expensive server in-house.FlexibilityThe big advantage is that it is highly cost-effective and allows you to try out new technologies immediately. For example, many video streaming services, online games, and the recently popular AI chatbots all run on the cloud.

Why do cloud costs matter?

The cloud is convenient, but because it is generally based on a pay-as-you-go system where you only pay for what you use, the term "cloud bankruptcy" has come to be used to describe situations where your usage increases without you realizing it, resulting in a high bill. In particular, costs tend to balloon for the following reasons:

• Poor resource management: Unused servers are left running, or a plan with higher performance than necessary is selected. One survey reported that CPU usage in a Kubernetes environment was only 13% and memory usage was 20%, so a lot of resources may be wasted.
• Lift and Shift Trap: Lifting and shifting existing systems to the cloud as is can be inefficient and costly because they are not optimized for the characteristics of the cloud.
• The rise of AI and machine learning: AI and machine learning (techniques that allow computers to learn from data) require huge amounts of computing resources. By 2029, these tasks are expected to account for half of all cloud computing resources, and without careful management, costs can skyrocket.
• Complicated pricing: Cloud providers (AWS, Azure, Google Cloud, etc.) have a wide variety of pricing structures and options, and even experts can have a hard time fully understanding them.

Against this backdrop, many companies are starting to feel dissatisfied with the cost-effectiveness of the cloud. However, this is not just a problem for cloud service providers; there is also a lot of room for improvement on the user side.

What is FinOps and what does it aim to achieve?

That's where "FinOps (Financial Operations)" FinOps is a cultural practice and methodology for optimizing cloud financial management. Simply put,"Let's clearly visualize the flow of money in the cloud, and have the technical, accounting, and management teams work together to use the cloud wisely and efficiently!"This is our initiative.

FinOps is about more than just saving money. It's about getting the most out of your cloud investments.Business ValueOur goal is to bring out the best in our products, that is, to avoid the "cheap means bad" approach and to accelerate innovation while improving cost efficiency. This is particularly important when utilizing cutting-edge technologies such as AI.

What makes FinOps unique?

FinOps has several unique characteristics that set it apart from traditional IT cost management.

• Collaboration: Bring different teams across your organization, including engineers, finance, and business teams, together to share common understanding and accountability for cloud costs.
• Real-time visibility and decision making: Get near real-time visibility into cloud usage and costs and make faster, data-driven decisions.
• Leveraging the cloud pay-as-you-go model: Take full advantage of the cloud's pay-as-you-go feature to reduce unnecessary spending.
• Centralized governance and decentralized execution: While cost management rules and policies are decided centrally, actual optimization activities are delegated to each development team.
• Continuous improvement: Rather than simply optimizing once, we foster a culture of constantly monitoring usage and making repeated improvements.

According to a Forbes article (June 2025), the FinOps Foundation is expanding its scope to include cloud software costs and licensing fees, so the scope of FinOps is expanding even further.

Cloud resource "provision" and cost structure

To understand cloud costs, it's important to know how resources are "provisioned" and charged for.

How does the cloud "provision" resources?

Cloud services provide computing resources primarily in the following forms:

• On-Demand Instances: This is the most basic form of provision, where resources are secured immediately when needed and charged according to the time used. While it offers high flexibility, the unit price is high because there are no discounts.
• Reserved Instances/Savings Plans: This plan allows you to receive a significant discount compared to on-demand plans by committing to long-term use, such as one or three years. This is effective when you have resources that you need to use stably.
• Spot Instances: This is a mechanism that allows you to use surplus resources of cloud providers at a very low cost, but there is a possibility that it may be interrupted due to the convenience of the provider. It is suitable for processes that can be interrupted (such as batch processing).

The first step in optimizing costs is to understand these supply formats and use them appropriately based on the characteristics of your workload (the processing load of your systems and applications).

Main billing models

The cloud billing model is basically "Pay-as-you-goIn addition to this, there are also reserved instances such asDiscount-based use" As noted in CloudZero's blog (May 2025), the specific prices vary greatly depending on the service and usage volume.

The important thing is that charges are not just based on CPU and memory usage, but also on various other factors such as data transfer volume, storage capacity, and number of API requests. This is why billing statements tend to be complicated.

Why are these understandings important for cost control?

You can't reduce costs unless you know how much of each resource is being used and what pricing plan is applied to each. For example, if you are using on-demand instances for a system that is always running, you may be able to significantly reduce costs by simply switching to reserved instances. Also, even basic actions such as shutting down unnecessary development environments at night and on weekends can add up to significant savings.

As an OpenMetal.io article (May 2025) states, "Real-time data helps organizations monitor cloud costs and avoid run away bills," making visibility and understanding of usage essential.

Technical Mechanics: A Look Behind the Scenes with Cloud and FinOps

How Cloud Computing Works (Super Beginner's Guide)

Behind the scenes of cloud computing are huge data centers located all over the world. These data centers are equipped with a huge number of servers and storage,Virtualization technology (technology that makes one physical computer appear as multiple logical computers)We use these services to give users the flexibility to use the resources they need.

Users can access these resources via the Internet and operate them as if they had a computer at hand. This means that companies no longer need to have their own large-scale IT infrastructure, making it possible to reduce initial investment and flexibly expand systems in line with business growth.

How do cloud costs occur?

Cloud costs are primarily comprised of the following components:

• Compute costs: Server (virtual machine) usage time, CPU, memory amount, etc.
• Storage costs: Data storage capacity, access frequency, etc.
• Network Cost: The amount of data transferred in and out of the data center, etc. Data sent to the Internet (outbound) in particular tends to be expensive.
• Managed Services Cost: Fees for certain services managed and offered by cloud providers, such as databases, machine learning platforms, and analytics tools.
• Other: IP address usage fees, load balancer (device that distributes access load) usage fees, software license fees, etc.

There are tools available to identify which services have experienced significant fluctuations in costs, such as the new "Cost Comparisons" feature of AWS Cost Explorer (FinOps.org June 2025), but detailed analysis is required because these factors are intricately intertwined to determine the final bill.

FinOps practices and concepts

FinOps is not something that ends with the introduction of a specific tool. It is important to have a culture and process that runs a continuous cycle. The FinOps Foundation advocates the following three main phases:

1. Inform (information collection and visualization):
   • Gain accurate visibility into cloud usage and costs for all stakeholders.
   • Categorize (tag and allocate) costs by project, team, or service to clarify responsibility.
   • Set budgets and compare against actuals to analyze variances. Tools like Datadog Cloud Cost Management can help you allocate, budget, track, and optimize costs (DatadogHQ.com May 2025).
2. Optimize:
   • Based on the information collected, identify and implement cost-saving opportunities.
   • Appropriately size your resources (adjust them to be as large as necessary), stop or delete unnecessary resources, and choose an appropriate pricing model (such as purchasing Reserved Instances).
   • We will also consider improving efficiency by reviewing the architecture.
3. Operate:
   • Implement optimization measures and continuously monitor their effectiveness.
   • Set cost-efficiency targets and enforce governance without impeding the speed of business.
   • Leverage automation tools to streamline the optimization process.

By continually repeating these cycles, we aim to optimize cloud costs and maximize business value. As a Dev.to article (May 2025) states, "FinOps isn't just about saving money."

FinOps technologies and tools

A variety of tools and technologies are used to implement FinOps.

• Cloud providers offer cost management tools: AWS Cost Explorer, Azure Cost Management, Google Cloud Billing, etc. Provides basic cost analysis and budget management functions.
• Third-party FinOps platforms: CloudZero, Splunk (Cloud Cost Management), Datadog, Nops.io, etc. Provides more advanced analysis, anomaly detection, automatic optimization functions, multi-cloud support, etc.
• Tagging Tools/Policy Engine: Appropriately tag resources to improve cost allocation and governance.
• BI Tools (Business Intelligence Tools): It visualizes collected cost data and enables detailed analysis.

By combining these tools, you can effectively advance the "Inform," "Optimize," and "Operate" phases of FinOps.

FinOps Credibility and Community

The role and credibility of the FinOps Foundation

The company that plays a central role in promoting FinOps isFinOps Foundation" is a non-profit organization under the Linux Foundation that provides FinOps best practices, standardization, education, and certification programs. Many cloud professionals and companies participate, and it has greatly contributed to increasing the credibility and recognition of the FinOps field.

A Forbes article (June 2025) reported that the FinOps Foundation has expanded the scope of its balance sheet to include associated cloud software costs, licenses, and fees, signaling that FinOps is evolving beyond just infrastructure cost management into a broader IT cost optimization framework.

Industry adoption and active community

FinOps is rapidly becoming more widespread, especially among advanced companies that actively use the cloud. It is particularly popular among cloud-native companies (systems and services that are designed from the start to run on the cloud) and companies promoting digital transformation (DX).

Conferences such as "FinOps X" hosted by the FinOps Foundation are held around the world, where many experts come together to share their knowledge. According to a TechTarget article (June 2025), "FinOps X 6" will show that FinOps is evolving to include AI, SaaS, and IT asset management, and will provide a new framework for measuring and optimizing IT spending. Such active community activities are also a factor in increasing the credibility of FinOps.

FinOps Use Cases and Future Outlook

Actual FinOps use cases (cost allocation, budgeting, optimization)

How exactly is FinOps being used? Here are some examples.

• Accurate cost allocation: By accurately allocating the cost of shared resources to each project or department, you can increase each department's cost awareness. If you can clearly see who is using how much, it will be easier to reduce waste.
• Data-driven budgeting: We will create a realistic cloud budget based on past usage records and future business plans. We will thoroughly manage budgets and actuals, and detect signs of budget overages early on.
• Continuous resource optimization:
  • Right Sizing: Identify instances with excess CPU, memory, etc. and resize them appropriately.
  • Stopping and deleting idle resources: Identify development environments, test servers, etc. that have not been used for a long time and shut them down or delete them.
  • Storage Tiering: Move less frequently accessed data to a cheaper storage class.
  • Pre-order optimization: Optimize your Reserved Instance and Savings Plan purchase portfolio to maximize your discounts.
• Anomaly cost detection: Automatically detect and alert you to unexpected cost spikes so you can address them before they become problems.

A Ness.com article (June 2025) states, "FinOps helps businesses control cloud costs and optimize their AWS environment for efficiency."

The evolution and importance of FinOps in the AI ​​era

As mentioned at the beginning, the importance of FinOps is increasing as AI technology becomes more widely used. This is because the training and inference of AI models requires huge computing resources, which can be a major factor in pushing up cloud costs.

FinOps also manages the costs of AI workloads and plays a role in maximizing their ROI (return on investment). For example, it helps to compare the cost of training an AI model with the business value gained from it and make appropriate investment decisions. In addition, efficient use of hardware specialized for AI processing (such as GPUs and TPUs) and the use of serverless architectures (execution environments that do not require server management) are also considered from the perspective of FinOps.

As TechTarget (June 2025) points out, FinOps has evolved beyond cloud cost management to include cost management for AI and SaaS, making it an essential skill in the age of AI.

Expanding to multi-cloud and SaaS cost management

Many companies are using multiple cloud services in combination to avoid the risk of becoming dependent on a specific cloud provider and to take advantage of the strengths of each provider.Multi-Cloud Strategy" However, this can also make cost management more complex. FinOps is also evolving as a framework for understanding and optimizing costs across such multi-cloud environments.

In addition, the use of SaaS (Software as a Service: software provided via the Internet) has also increased rapidly in recent years, and the license and usage fees for these services have become costs that cannot be ignored. The FinOps concept is also beginning to be applied to the visualization and optimization of SaaS costs. The news that the FinOps Foundation is expanding its scope (Forbes, June 2025) also supports this trend.

FinOps vs. Traditional Approaches: What's the Difference?

Comparison with traditional IT cost management

Traditional IT cost management in on-premise environments (environments where servers and other equipment are owned and operated by the company) has focused on capital investment plans over several years and fixed budget allocations. On the other hand, in cloud environments, resources are procured quickly and dynamically, and costs fluctuate according to usage. This difference creates a fundamental difference between FinOps and traditional approaches.

Comparison points	Traditional IT Cost Management	FinOps (Cloud Cost Management)
Procurement Cycle	Long-term (months to years)	Short-term/real-time (minutes to hours)
Nature of costs	Focus on fixed and predictable capital expenditures (CapEx)	Primarily due to variable and difficult to predict operational expenditures (OpEx)
decision making	Centralized (IT, Finance)	Decentralized (development team and product team involved)
Reporting Frequency	Monthly, quarterly	Daily, real-time
Main Interests	Budget compliance, cost reduction	Maximize business value, cost efficiency, and speed

In this way, FinOps is a more agile, data-driven approach born out of the dynamic nature of the cloud.

Benefits of Introducing FinOps

Implementing FinOps offers the following benefits that go beyond simply using the cost management tools provided by your cloud provider:

• Reduce costs and improve forecast accuracy: It helps you identify and reduce wasteful spending and better predict future costs. According to a USU Software blog (May 2025), adopting FinOps could reduce the cost and time of cloud migration by up to 5% and sustain the savings over the long term.
• Increased business value: Align cost efficiency with business goals to get the most value from your cloud investments.
• Clear accountability: Clarify cloud usage costs for each team and project and foster ownership of costs.
• Promoting collaboration across departments: Foster a culture where technical, financial, and business teams work together toward a common goal: maximizing the value of the cloud.
• Accelerating innovation: Proper cost management encourages innovation by giving you the budgetary flexibility to try new technologies and services.

As a CIO Dive article (June 2025) states, "FinOps was born in the cloud," and FinOps is becoming essential for cost control in the cloud era.

Risks and Cautions: Pitfalls of Adopting FinOps

FinOps is a powerful approach, but there are some challenges and points to keep in mind when implementing and operating it.

Difficulties in Adopting FinOps

• Culture change: FinOps is not just about tools; it is also about a culture change. Breaking down departmental silos and getting everyone cost-conscious takes time and effort.
• Skill set shortage: A variety of skills are required to promote FinOps, such as cloud technology, financial knowledge, and data analysis capabilities, but the number of people with these skills is still limited.
• Tool selection and implementation: There are many FinOps-related tools on the market, but it can be difficult to select one that meets your company's needs and to implement and operate it effectively.
• Management understanding and commitment: To promote FinOps throughout the company, deep understanding and strong leadership from management is essential.

The risks of not managing your cloud costs

If you do not implement systematic cost management such as FinOps, you may face the following risks:

• Bill Shock: Unexpected high bills cause budgets to go way over budget.
• Waste of resources: Unused or excess resources are left unattended, resulting in continued wasteful costs.
• Decreasing ROI: The return on cloud investments is not as expected, reducing business value.
• Hindering innovation: Cost concerns make people hesitant to try out or adopt new technologies or services.

As mentioned in CloudZero's YouTube video (posted around May 2025), cloud computing was supposed to simplify everything, but the reality is that many companies are plagued by unexplained bills and costs.

Cloud pricing is complex

As mentioned above, cloud provider pricing structures are very complex. There are hundreds of services, each with different pricing options and discounts. In addition, these pricing structures are frequently updated, so you need to keep up with the latest information. This complexity is one of the major factors that make effective cost management difficult. Arvato Systems' blog (May 2025) emphasizes that FinOps "provides the necessary control and transparency."

Expert Opinion and Analysis

Many experts and industry analysts point out the importance of cloud cost management and the effectiveness of FinOps.

For example, as the InfoWorld article notes, "Before taking advantage of cloud services, many companies should develop a clear plan outlining their reasons, goals and approach," and "resist the temptation to move existing systems as-is to the cloud, evaluate workloads and make adjustments to improve performance." This is right in line with FinOps thinking.

In addition, the prediction that AI and machine learning tasks will account for half of cloud computing resources (mentioned above) speaks to the urgency of cost management strategies for these resource-intensive tasks. The warning that "delaying discussions about costs until these systems are up and running leaves organizations in a vulnerable state with no option to adjust along the way" suggests the importance of early planning and governance through FinOps.

A Splunk blog post (May 2025) explains its importance as follows: "FinOps — short for financial operations — is another essential practice. By integrating financial accountability into the operational side of cloud computing..."

A TechvZero article (June 2025) also emphasizes the value to executives, stating that "FinOps can provide CFOs with clarity and control over rising cloud costs."

Latest News and Roadmap

The world of FinOps is constantly evolving, so it's important to stay up to date with the latest trends.

Announcements from events such as FinOps X 2025

Major conferences such as "FinOps X" are where the latest trends, best practices, new tools and technologies in FinOps are presented. For example, "FinOps X 2025" showed that FinOps is evolving into IT cost management in general, and especially into the areas of AI and SaaS (TechTarget June 2025). Major cloud providers such as AWS, Microsoft and Google are also increasing their contributions to the FinOps ecosystem, and the cost management features on their platforms are also strengthening day by day (CIO Dive June 6). Microsoft Learn also provides information on cost estimation for FinOps hubs (Microsoft Learn June 2025), and concrete tool utilization is also progressing.

Trends in expanding FinOps capabilities

Future FinOps is expected to evolve in the following directions:

• Advanced AI/ML cost analysis and optimization: Enhanced capabilities to analyze and optimize cost factors specific to AI workloads.
• SaaS Cost Management Integration: Centralize management of growing SaaS spend with a FinOps framework.
• Alignment with Sustainability: A movement to visualize the environmental impact (such as CO2 emissions) associated with cloud usage and aim for greener IT operations.
• Increased automation: Expanded functionality for automating cost optimization actions (resource sizing, shutting down unnecessary resources, etc.).
• Advanced predictive analytics and anomaly detection: Leverage machine learning to achieve more accurate cost forecasting and earlier anomaly detection.

FinOps continues to evolve from simply a cost-cutting technique to a key business management technique that supports a company's overall IT strategy.

Frequently Asked Questions (FAQ)

Q1: What exactly is cloud computing? Can you explain it in a way that even an IT novice can understand?

A1: Yes, John will answer! Think of cloud computing as borrowing the power (data storage space, computing power, etc.) of "someone's big computer" via the Internet. You don't have to store everything on your own computer or smartphone, you can view data and use apps from anywhere as long as you have an Internet connection. For example, Gmail, Netflix, online games, etc. It's a convenient service that allows you to do advanced tasks even if you don't have a large machine at hand.

Q2: Why are cloud fees getting more and more expensive? It's convenient, but I'm worried...

A2: That's a good question. Many cloud services use a pay-as-you-go system, where you pay only for what you use. So if you use a lot without realizing it, or choose a plan with higher performance than you need, your fees will go up. Also, new and convenient services are constantly appearing, so your costs can increase as you try them out. That's why it's important to learn how to use them wisely, like FinOps.

Q3: What is FinOps? I've never heard of it before... doesn't it sound suspicious?

A3: It's not suspicious at all (laughs). FinOps is an abbreviation for "Financial Operations," and it is a way of thinking and a mechanism for using cloud finances effectively (Operations). It's like a "teamwork technique" for technical teams, accounting teams, and business teams to work together to use the cloud efficiently and effectively. There is a proper organization called the FinOps Foundation, and it is a healthy initiative that is spreading around the world.

Q4: Isn't FinOps for large companies? Does it have nothing to do with small and medium-sized businesses?

A4: Not at all! Of course, large companies spend a lot on cloud services, so FinOps has a big effect on them, but optimizing cloud costs is also important for small and medium-sized companies. There are plenty of benefits to adopting FinOps to make effective use of limited budgets. Even small teams can start by putting it into practice. For example, the first step is to carefully check your monthly invoice and see if there are any services you are not using.

Q5: What should I do first to get started with FinOps?

A5: First of all, you need to understand the current situation. Start by visualizing how much your company is paying for the cloud every month and how much each service costs. I recommend using the cost management tools provided by your cloud provider. Then, technical staff and accounting staff can look at the information together and discuss where there seems to be waste. This is just a small start to FinOps!

Summary

Well, today I have talked in detail about the cost problem of cloud computing and FinOps as a solution, taking into account the trends of the AI ​​era. The cloud is a powerful tool that can greatly grow your business if used correctly, but cost management is essential to achieve this. FinOps provides a compass for this, as well as a method of practice.

The important thing is to foster a culture of continuous improvement by working on FinOps throughout the organization, rather than leaving it to a few experts. It may seem difficult at first, but try starting with small steps. I hope this article will help you in your cloud utilization and cost optimization.

Related links collection

If you would like to know more about FinOps and cloud cost management, please refer to the following links. (Please check the official website for the actual URL.)

• FinOps Foundation: https://www.finops.org/ (The headquarters of FinOps! Lots of materials and community information available)
• AWS Cost Management: https://aws.amazon.com/cost-management/ (Cost management tools for AWS users)
• Azure Cost Management and Billing: https://azure.microsoft.com/ja-jp/products/cost-management (Cost management tools for Azure users)
• Google Cloud cost management: https://cloud.google.com/cost-management?hl=ja (A set of cost management tools for Google Cloud users)

*This article does not recommend any specific investments or use of services. When using cloud services or introducing FinOps, please consider your own situation carefully and make your own decisions while also consulting with experts (DYOR – Do Your Own Research).

Cloud, FinOps, Cost Reduction, AI, IT Budget Management