Cloud spending is on the rise. As organizations shift more applications to the cloud, there is a growing need to optimize workloads and reduce spending when possible. But a lack of visibility into complex cloud bills often impedes these goals. This is compounded by a lack of data standardization across the multi-cloud landscape, with cloud vendors producing lengthy billing reports in various formats. With things so decentralized, FinOps practitioners often struggle to make sense of it all.
FinOps Open Cost & Usage Specification (FOCUS) is set to change this status quo. FOCUS, an initiative sponsored by the FinOps Foundation, a Linux Foundation technical project, aims to create a standard, vendor-neutral specification for cloud cost, usage and billing data. A common schema for cloud billing should help unify cost data across cloud vendors and greatly aid FinOps objectives in areas like allocation, chargeback, budgeting and forecasting.
I recently met with Udam Dewaraja, FOCUS lead at FinOps Foundation, to understand the context that led to creating the specification. Below, we’ll dive a little deeper into FOCUS, examining the details of the proposed specification and considering what benefits it will bring to cloud consumers and cloud service providers (CSPs).
Why the Cloud Needs a Common Billing Schema
The complexities of today’s cloud services can often create headaches around cloud billing. For instance, AWS alone has hundreds of services and potentially thousands of SKUs. Cloud service providers each have their own data formats and terminologies, which are reflected differently in detailed bills. And with the granularity of cloud metering, enterprises could be staring at hundreds of millions of rows of cost data. Now, extrapolate that across multiple cloud service providers, SaaS and APIs, and you can see the dilemma that the modern CFO faces.
“There are many nuances that FinOps practitioners need to understand,” said Dewaraja. “And a lack of a common definition can be a scalability challenge as you add more things.”
It’s relatively easy to spend money on more and more cloud-based consumption models. As Dewaraja said, “Everyone has the company credit card.” Of course, you can use tools like AWS Cost Explorer, Cloudability or Datadog to garner some insights to reduce spending. But to really get the fuller picture, you need to rationalize cost metrics across many areas. Plus, in 2023, The State of FinOps report found the widest variety of cloud cost management tools in use in the history of the report, indicating tooling sprawl.
Overview of FinOps Foundation
First, for those unfamiliar, the FinOps Foundation is a Linux Foundation-supported group that aims to help practitioners understand the discipline of FinOps. Representing a community of over ten thousand FinOps practitioners, the FinOps Foundation routinely shares best practices and oversees a FinOps framework. “FinOps is more of a cultural practice that should be adopted,” explained Dewaraja. As such, the initiative aims to oversee training, meetups and events and encourage executive buy-in around the FinOps concept.
Understanding the FOCUS Specification
So, what exactly does FOCUS entail? Well, FOCUS is an open source royalty-free specification for cloud billing data. It will provide standard dimensions, attributes, and terminologies for cloud billing data sets. To formalize the specification, the project contributors are actively considering the essential FinOps capabilities and what requirements these cloud bill data sets have in common.
The specification itself has yet to be officially released and is still being formalized at the time of writing. Microsoft and Google have joined the initiative, as well as numerous cloud finance and cost analysis vendors. And while the group waits for additional CSPs to join, the community is building out open source validators and converters, said Dewaraja.
Benefits of a Standard Cloud Billing Spec
Cost management solutions are already available, but what’s not readily available is a method to make business decisions based on broader richer datasets, explained Dewaraja. This is where standardized cloud billing can greatly aid efforts by creating a more holistic picture.
Specifically, this can aid objectives like allocation, chargeback, budgeting, and forecasting. Doing so is often an incremental process, explained Dewaraja—as you gather insights into data, you iteratively use this visibility to make improvements over time.
Some other benefits of adopting FOCUS will likely be:
Putting finance in engineering terms. In the cloud, finance is quite dynamic. And interestingly, the FinOps discipline is becoming engineering’s responsibility as part of the shift left approach, said Dewaraja. Engineers now need to understand this problem and how to architect their solutions cost-effectively. As such, bringing specifications into the mix will help put financial responsibility squarely on the shoulders of engineering terms.
Bringing accountability to cloud consumption. A standard specification should empower essential FinOps capabilities that rely on usage segmentation like internal cost reporting, showback and chargeback. Because if invoices are just one big pie, there is no accountability for individual departments, and you can’t drive the behaviors you need, said Dewaraja.
Win-win for practitioners and cloud vendors. With FOCUS, cloud providers will drive more trust in cost data, providing more visibility. And corporations using the cloud can make their adoption more efficient, likely influencing them to bring on more workloads. “Driving trust and understanding of this cloud data is mutually beneficial,” Dewaraja said.
FOCUS Set to Improve FinOps
Dewaraja, who previously spearheaded FinOps practices at Citigroup, knows all too well the strains of managing disparate cloud billing data. He oversaw a broad, dynamic cloud-native platform of distributed cloud and SaaS and sought to embrace platform engineering principles. In this environment, you need a holistic cost picture that associates various expenses to make the right calls, he said. “You really see success if you can plug this into the workflows of those developers and into business processes themselves,” he said.
Theoretically, FOCUS could deliver on these goals. But although the project is gathering momentum, it’s still in an early stage. For the standard to gain a foothold, it will require greater awareness and more contribution from other CSPs. The specification is community-driven but is being led from the practitioner down, adopting corporate contribution licenses instead of individual developer contributions. Thus, cloud vendors and cost management vendors will likely lead the initial charge.
FOCUS looks great in the long run but will require a little bit of work upfront to get folks on board. That said, it should be on the radar for 2024 roadmaps, said Dewaraja. To learn more about FOCUS and how to contribute, software providers should check out the FinOps Foundation materials.
