SLM + FinOps – Taking Control of Cloud Spend

SLM + FinOps

Taking Control of Cloud Spend

SLM and FinOps – Taking Control of Cloud Spend

Organizations all around the world are struggling with the current unprecedented economic situation. Subsequently, many organizations have experienced significant revenue decline resulting in layoffs,  budget reductions and cost-cutting exercises. Reviewing internal costs to find efficiencies has become a trend in an effort to react to the ever-present COVID-19 situation. This will continue on a global basis, putting significant pressure on organizations to scale back and find cost-saving opportunities. Despite many organizations having several years of continuous business growth and investment, some have initiated massive transformational and optimization initiatives to gain better control over operating costs. Chief Information Officers within Information Technology (IT) are experiencing significant effects from these initiatives, putting them under greater pressure to generate savings as quickly and efficiently as possible.

To add to the mounting pressure, many organizations needed to adapt their IT environments to support the increased capacity requirements within the shortest possible time. Remote working and web conferencing solutions had to be implemented as quickly as possible and the demand for computing capacities of certain workloads increased dramatically “overnight”. All of these factors have greatly affected budgets as organizations experienced unbudgeted spend because of increased datacenter and cloud computing demand. Therefore licensing, support and maintenance costs spiraled, consuming budget which had been allocated to other internal IT projects.

Fulfilling the new unforeseen business requirements while reducing IT costs is a challenge for most organizations! As a result of the unforeseen changes, SoftwareONE  developed our overarching optimization service: Software Lifecycle Management (SLM) Cost Take-Out, a rapid, focused and flexible proposition aiming to provide quick time-to-value by identifying cost-saving opportunities within SLM, the cloud and the application lifecycle.

With our integrated Cost Take-Out Hypothesis Database, SoftwareONE can very quickly identify “weak spots” within organizations’ software lifecycle management capabilities –  specifically in the areas of  purchasing and contract terms, software consumption (also including Open Source Software and Mobile Apps), software use, process and administration expenses, and cloud governance and economics. We can define and realize saving initiatives to reduce overall license costs from a short-, mid- or long-term perspective.

SLM as a Practice

In general, SLM as a practice has been constantly evolving. 15 years ago the IT focus was on the more traditional software asset management (SAM) processes, managing licensing compliance and hardware assets. Today, the shift in focus is increasingly on financial management and the whole end-to-end process; from strategy, to procurement and supply chain, to SLM and cloud management and optimization (and now also increased in combination with security). While many service providers are still promoting traditional SAM or SAM 2.0, at SoftwareONE we believe SAM is not solely solving the business issues any more, it’s about being more proactive in understanding the entire software license portfolio throughout its lifecycle. This ensures  strong governance, control, visibility and transparency – all of which are crucial to reach the full potential of SLM. SLM needs to maintain the pulse as well as constantly adapt to new requirements and technological developments. This is especially true when workloads are increasing due to more demand from app development, a greater number of users, and the adoption of new technologies. Overall cloud transformation adoption and migration is providing companies with both great possibilities and even greater challenges.

FinOps for the Win

Cloud Financial Management Operations (“FinOps”) provides the ability to leverage the possibilities of cloud without the risk of over usage, spiraling costs, lack of visibility and the other associated issues of cloud usage. FinOps is a process of introducing accountability for cloud spend and enabling data-driven decision making to be able to forecast future spend, optimize the estate, and negotiate better terms and conditions with cloud vendors.

To be successful in the future, organizations will need to focus on accelerated customer fulfillment,   market requirements, and enforcing the optimization of cloud costs. They will need to further advance cloud transformation to create new products and services with the help of cloud technologies and the associated innovations. With SoftwareONE’s expertise and leading market insights, we can help ensure a successful implementation by leveraging the PyraCloud and GorillaStack platforms to track as well as optimize your cloud spend. 

With the implementation of FinOps methodologies, SLM is further stepping up into a C-level functionality, taking back control of spiraling cloud spend and supporting the reduction of cloud spend. It is helping support CIOs and CFOs with meeting their strategic cloud goals and objectives by having a well managed, controlled cloud environment, yet still enabling the developers to have the functionality needed to support their agile development approaches.

SoftwareONE globally has the largest publisher, contract and client databases as well as the largest best-practice database supporting SLM. Still, we do not claim to be able to save you 30% or more as a minimum on your total software spend all the time (as is currently being promoted by many service providers in the market). The percentage depends on your current maturity level or on your focus area for cost optimization, amongst other things. Yes – if you are only focusing on your cloud spend and you are also leveraging “commitments” (e.g. reserved instances) the cost reduction can could be up to 70%. Nevertheless, we feel an average savings of 15-20% is achievable by analyzing your software and cloud estate throughout your whole lifecycle. SoftwareONE can support the analysis with our value chain and technical expertise, helping your organization identify process gaps and remediate with the right level of FinOps consultancy. We can help optimize your estate, reduce spiraling costs and develop cost efficiencies through well-negotiated cloud agreements.

If you think,

"Yes, I would like to achieve savings, but don't have the budget to implement such a savings project“

– don’t worry, we are happy to go all-in and take the financial risk if necessary with our Gainshare Model.

We are here for you – challenge us in these challenging times.

Reclaim the Cloud

Take Control of Your Cloud Spend

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Author

Joerg Rieker

Regional Service Lead Software Lifecycle Management, EMEA

Consulting Leader – Global

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