We just spent an amazing two days at FinOps X, the annual conference hosted by the FinOps Foundation. This year’s conference was the largest ever at 2,000 attendees, a 20% increase from 2024. Some of the biggest enterprises were in attendance — American Express, Electronic Arts, John Deere, Koch Industries, Lockheed Martin, Meta, MGM Resorts, PepsiCo, and Starbucks — along with the major cloud providers: AWS, Google Cloud, and Microsoft Azure. This underscored the fact that FinOps is not just a math exercise to zero; it’s a business-critical process to achieving organizational growth and transformation. New themes were introduced this year including FinOps for AI, scopes and the new FinOps framework, integration with IT asset management (ITAM), and on-premises FinOps.
FinOps For AI Is Nascent But Growing
AI cost management was a dominant theme at FinOps X, with nearly a quarter of the 73 keynotes, breakouts, and chalk talks focused on the topic. This is unsurprising given the surge of interest to stand up generative AI (genAI) use cases and the significant compute, storage, and database resources required to support it. Managing genAI costs also introduces new levers such as model selection, training, inferencing, token usage, and caching, while adding layers of complexity due to its probabilistic nature. Today, average AI spend remains low, but this will change. In the next two to three years, spend will skyrocket as production-ready use cases scale. Without a dedicated AI cost practice, FinOps teams will get hit by a freight train. Most FinOps practices are still building the necessary skills and instead rely on close collaboration with data teams or business units that are managing costs independently.
On-Prem Management Is Here
The scope of FinOps has expanded and is reflected in the new FinOps Foundation framework, which added “cloud and technology” to its definition. This change has brought to bear the reality that FinOps practices have a broader mandate to cover on-prem and SaaS costs. Since late 2024, most of my client conversations have centered on this very theme: how to extend FinOps practices to on-prem, SaaS, and even (surprisingly) labor costs! Traditionally, on-prem was seen as outside the FinOps scope due to its sunk capex nature and infrequent refresh cycles. But that view is changing. More frequent data gathering and insight cycles (monthly or quarterly versus annually) are informing smarter refresh planning. And there is a very real-time component: power and heat. Organizations are basing workload runtimes during lower-priced times, like off-peak hours. Workload placement and even rack placement and size affect cooling decisions.
But why the sudden change? The ROI of FinOps is now proven. When done well, organizations can see significant savings and cost avoidance. FinOps teams can tie engineering decisions to cloud spend and maximize business value. Now, executives are seeking similar returns across all areas of IT spend. Subsequently, FinOps and IT financial management teams are increasingly collaborating — often reporting to the same leader — and raising new questions. If FinOps works for cloud, why not on-prem? And why couldn’t FinOps handle all of IT cost reporting? In many ways, FinOps has become a victim of its own success.
FOCUS 1.2 Is Released With SaaS And PaaS Support
The latest release introduces support for SaaS and platform as a service (PaaS), a more unified view of “Cloud+” spend, and enhanced allocation capabilities. SaaS and PaaS billing data can now be folded into the same schema as cloud spend, enabling more centralized cost visibility and management. Key improvements in allocation and currency normalization are also included. FOCUS 1.2 adds a new invoice ID column, directly linking each row to a vendor invoice which enables easier cost allocation. Virtual currency support — including vendor-defined units of costs such as “token,” “credit,” or “DBU” (Databricks Unit) — has been introduced. This is a critical advancement: The ability to normalize charge units into a common cash value brings organizations significantly closer to achieving unified cost management and allocation across all IT spend categories.
Final Thoughts
FinOps teams have a new mandate: managing and optimizing the total cost of IT. This expansion was reflected in the major themes at X: from the expanded FinOps Foundation framework that encompasses technologies beyond public cloud, to the latest FOCUS enhancements to support SaaS and PaaS, to public endorsement for ITAM integration, and finally to the rising urgency around AI cost management. The original mission to manage and maximize the value of cloud spend has been proven and, in many organizations, successfully delivered. But the road ahead will demand stricter adherence to key FinOps tenets: cross-functional collaboration, individual accountability, and timely, accessible financial data. As the scope of FinOps broadens, so too does its strategic importance.
