In this HITT, Telarus VP Koby Phillips and Paolo Sellari from Tangoe discussed the growing significance of FinOps in cloud management. FinOps serves as a framework that unites finance, IT, and product teams to effectively manage cloud costs, emphasizing the need for organizations to understand their cloud expenses beyond just the IT department. With a community of over 23,000 members, FinOps promotes best practices and tools for ongoing financial oversight, helping organizations identify and manage their cloud spending. Tangoe plays a crucial role in normalizing cloud data and providing custom reporting tools, enabling better visibility and decision-making regarding cloud expenses. The discussion highlighted the importance of financial responsibility and the need for continuous optimization in cloud cost management.
Transcript is auto-generated.
Very happy today to welcome back to the Tuesday call Telarus VP of cloud, Koby Phillips, joined today by our friend, Paolo Sellari. He’s director of product management for cloud at Tangoe. Koby, Paolo, welcome to the call. Glad to have you here.
Appreciate it, Doug. Paolo, welcome. Thanks for joining us.
Thank you for having me to the whole team. It’s very it’s exciting to be here and can’t wait to dive into it.
Well, we have a fun topic, Doug. We’re gonna talk about FinOps, which doesn’t sound super exciting, but when you dig into it, it’s it is, depending on how you wanna skew it.
I saw the slides. The ears are going to be amazing. What are you talking about?
Well, with the mystery around, I I would call it I wouldn’t call it a mystery, but there has been some confusion around what FinOps is, and we’re gonna dig into it and make sure that all our advisers know the different structure and the reason why it’s so important, especially for any customers that are utilizing cloud now, and more importantly, how it’s gonna make an impact on customers as they start to utilize AI and some other advanced technologies as they move forward. So, Paolo, I know you brought that you shared some slides with us. So, Jojo, if you wouldn’t mind, let’s go ahead and bring a couple of those up, and we’ll dig into it. So, Paolo, just kinda by definition, you know, what is, you know, FinOps we’ll kinda get into the history of why it’s you know?
Absolutely. If if if you go to the next slide, I’ll kinda I’ll use that as a pivot point to it. So, it became relatively new over the last couple of years for Tango, diving into the actual foundation of FinOps. And as we dove into it, we realized Tango as an expense management technology company, focused on mobile fix and cloud expenses.
FinOps was just right up our alley, and the more we dug into it, the more we realized the fit. So, essentially, it’s a framework. It’s an operational framework. It’s a new practice over the last maybe years that it’s been evolving and changing and growing very rapidly, that looks into, how to bring teams together, how to look at cloud costs, how to understand them, how to not look at cloud as just, well, that’s what the IT and cloud admins take care of.
We don’t know anything about it. It’s it’s leaked into everything we do. I always equate it to, like, the mobile space. Everybody has a mobile phone.
Everybody has a device. We all know what they do, what it is. It impacts all of us. So in the cloud space, the projects we do, the projects that we work on, we inherently kind of are a part of that cost, but we don’t understand how we’re impacting it.
FinOps is about bringing all of these hyperscalers together to talk about data the same way, people collaborating and building on the foundation as both vendors and customers and cloud enthusiasts or cloud analysts in their own organization and learning how to manage this through best practices. You’ll see I highlighted in green is the discipline of cloud financial management. That’s the boring thing of what they do. The more exciting thing of what they do is, it’s a twenty three thousand plus person strong community.
There’s ten thousand companies involved. That includes AWS, Azure, GCP, and Oracle, so the actual vendors involved in this foundation.
And, if we go to the next slide, they’ve developed this I’m not gonna go through this at all, so please nobody gets scared of I think we did it down piece by piece in Yeah.
Every little box now strap in. It’s essentially they they’ve said, look. This is how we would encapsulate it. So just looking at a couple of the bigger boxes, it’s kind of like these are their domains. Inside each domain is a capability, and it just states, look, guys.
You’re in the organization.
What’s important to all of us? It’s about bringing your finance teams together, your IT teams, your product teams, how we all are impacted, or how we all are a part of that, and what do we have to look at? We have to look at the data. We have to look at benchmarking, forecasting, the budgeting of this.
Everybody has a role to play, and not everybody needs to know that AWS, EC two container, virtual machine, they don’t need to know those things. They just need to know that I’m hosting and my project is a part of it, and these are the costs related to me. So short essence, this framework, it’s bringing a lot of power because you’ve seen the the the buy in, Kobi, and, essentially, it’s allowed more organizations to say, you know, hey. We need to do more FinOps.
Hey. We need to bring more teams together. Hey. You’re a part of this, not just our IT team.
And for Tango, that’s right in our sweet spot, right where we like to help people.
So if I’m gonna break this down a little bit, and I’m a big analogy person. Right? Yes. I’m searching for one, but my basic understanding of this is you have a customer the way this was probably birthed was you had a lot of people going, I don’t understand why my AWS bill is so high.
Absolutely. You have very different procurement runbooks when you move to a cloud like environment. And so versus traditional, you know, buy a server, burn it in, put it on prem, you’ve got site based. So this was really a nice foundational structure for organizations to be able to follow that not only includes, like like you said, the IT management side of it and the engineers and everything else, but also it ties back into financials.
It ties back into the rest of the environment. And so here’s some examples, guys, of things that that FinOps really attacks outside of just saving, and it’s more financial responsibility than going in and just cost savings.
Whenever you start a project for FinOps, you’re usually gonna find cost savings because they have been spending somewhat irresponsible most of the time, which is why a lot of companies start to put this in. But the tagging piece of a pallet, like tagging what instances are being used by what division of the company, making sure that those follow through. These are very important things for a lot of organizations to, you know, justify their spend and their bills and make sure, like, each division of the company has it allowed. And Tango’s coming in and helping with that. Is that correct?
Yeah. Absolutely. So what we’ve realized is there’s customers that have used a lot of the tagging principles to start making sense or putting things into little categorizations through the built in reporting tools. But what we noticed with a lot of customers is once the dust settled off, my cost went up, I need optimization tools.
Now it’s, well, how do I maintain this? Right? What how do I bring more people involved? How do I look at the financials and always understand it and, you know, get ahead of it with alerting?
You’ll you’ll see in the in the one of these boxes on the right hand side, optimize usage and cost. It’s only one subsection. Right?
So there’s it’s trying to say that the world is larger than this. And all the way at the top, there’s public cloud, SaaS, AI, licensing, all these things Tango comes in. And what Tango realized was customers would come to us and say, we’ve got everything here, but how do I now amortize these charges to my finance team who’s asking me why is this one major charge? I wanna bulk it out to the twelve months and have it all amortized.
Or I wanna charge back individual call centers what they spent on it, or I have these seven projects or these three product lines in my business. How do I know what’s associated to what? And kind of see this hierarchical breakdown. So Tango has been taking and ingesting all these rules and saying, look.
We can get all this data, bring it all together in a normalized set. Right? Bring everything into one place, even multi cloud, then take all your finance business rules, all your reporting and alerting needs that you think are important inside your organization and customize the final viewpoint to fit your needs. You have tagging is independent, Colby, right, for everybody.
The whole point of tagging is it’s it’s only makes sense to you and your organization. Another organization’s tags are completely different. So we have to be super agile and flexible in our analytics tools to do a lot of work behind the scenes on the data to then give really impactful visualizations on the front end that anybody can use, whether you’re a finance person, whether you’re an person, whether you’re looking to optimize, or you’re just looking to be alerted in spikes in cost. Or one of my favorite ones where we impact a lot of people is how do I take someone who’s managing this and be able to talk to their executive leadership and say, by the way, I’ve got a handle on everything.
Here’s the overall executive dashboard. Here’s how everything’s moving along. And by the way, the questions you’re gonna ask that are business related are here. These are our call centers.
These are our projects. Right? These are our people. These are where the costs are happening, and I think that’s extremely impactful, and it’s been helping serve our customers very well.
So on the on the analogy front, I just wanna kinda go back because I I all my analogy is using laying back at, like, a household type thing in case Right. Sure. Yeah. I’m doing a lot of projects at home right now.
And So I equate this to, like, an organization coming in and, like, cleaning up their closet. But then two two weeks later, it could be a mess again because they don’t put any, like, any they’re not putting any kind of foundation in to say, this is how go forward. I’m gonna put away my clothes. I’m gonna do this.
I’m gonna do this. Like, this goes in this section. This goes in that section. So it definitely helps an organization, like, get structured.
And then the other big piece of it is that budgeting piece. Right? Like, helping the CFO, helping the c like, the CEO understand the budget. The the segment of the business world that this really starts to make a big impact on, guys, is gonna be that mid market and above where you have a lot of different divisions of your organization.
And think about it this way, you got companies like that have a marketing division. They need IT projects done. Well, a good CIO is starting to realize, I don’t wanna be viewed as a cost center holistically all the time. So I need to start almost charging internally on each division that’s utilizing IT and making sure I allocate the spend accordingly.
And that is something as cloud emerged became more and more prevalent, but you also had a lot of shadow IT going on. So a fin a good FinOps foundation will help, you know, in my understanding, Paolo, like, identify any shadow spend, any shadow IT, what’s spinning up where you get That’s odd. And to kinda walk it back, keep in mind, guys, you’re going from a traditional infrastructure environment, which still exists heavily. Right? You still have companies that are utilizing on prem and things like that.
But when they go to a cloud environment, even if they’ve been in one for, you know, years now, they’re just keystrokes and credit cards away from spinning things up that are gonna come back into that environment, which charges, you know, security risk. It also houses procurement problems and and cost, you know, cost sprawl and all of these things. So the SpinOps foundation really ties into a lot of different conversation. It is a business focused conversation that aligns the technology. You know, Paolo, for Tango, what what are the major conversation starters that you’re seeing that open the door for for deeper level of use for you guys?
Let let’s go to the next slide. I think it’ll it’ll actually have some of those come off some of these points. So the biggest conversation starters essentially is, first, you know, how do I centralize everything into one platform?
How do I get daily data and see everything based on my utilization, based on my business rules before the invoice cuts to me? How do I alert my executive leadership we are running to budget or not running to budget or the breakdown? A lot of times, Koby comes down to layer two. Right?
You know, something can discover an anomaly, discover a spike. There’s lot of tools out there can can say you’re spending x. The problem is once you’ve discovered a problem, how do you help solve it? So we help teams by saying, look.
We’re already showing you from the highest level all the way down to an individual. You know, we get millions and millions of records per day, so we can get down to the penny of charge on a service. So that way, you can aggregate that or drill into that at any level you want. So we help a lot of customers say first, you know, how deep do you wanna go, what teams are currently involved, are you involved in FinOps at all.
Right? Tango has over thirty FinOps, certified professionals.
We are a certified platform, so we can already come in and sit. Do you want us to talk to your team? Do you want our data team to create custom reporting for you through our custom report building utility, it allows us to say, you need a utility that helps you service your organization and yourself that’s agile to your business needs because you’re trying to answer these six principles. Right?
You’re trying to get more people to collaborate. You’re trying to help make decisions better. You’re trying to pass on ownership to not just be on the poor IT person who’s just running and building these services to support the business, has no say in the budget. But then when it’s over budget, they’re the ones being asked, why are you over budget?
How can you reduce? Whereas, you know, the idea here is if you’re looking at everything day by day, month to month from the beginning, and everybody’s a part of that, not only does your budgeting get better as time goes on because you know exactly what things are, you also have the ability to people know, oh, I’m running over budget or only this product or this division is running over budget. Everyone’s running to expectation. It’s a level of granularity and flexibility that they didn’t have before.
And just in case anybody doesn’t know that FOCUS acronym is, it’s pretty, pretty interesting and powerful. The SpinOps Foundation got together with the, all the hyperscalers, and they came up with a standardization of data of how they should be storing and reporting out data to customers, which Tango can ingest and support this, structure. So we are focused certified, but can you imagine going to any other industry and getting all the vendors and telling them, come together, and you’re all gonna call everything the same thing. You’re gonna report everything the same way for your customers to understand it.
That’s that’s how powerful the foundation has become to even have that influence, and these vendors are bought in. So Tango has taken that focus, standardization to our data, and we tell customers we’re operating to the highest standard. We’re able to go beyond that. We’re advising FinOps on even our normalized standard, and we can be as flexible as you need so that you can hit these principles, you can hit these domains, and everything can go a lot smoother.
Just one next slide just to show the number of contributing members that are communicating the FinOps that are help driving their focus, project. So everybody’s involved, not just the major hyperscalers, but major cloud vendors are all communicating here.
And we can be on the next slide while we chat, I think.
Yeah. And so what I what I’m kind of hearing here, the opportunity for the advisers on the call is there’s a there’s multitude of opportunities here. If you’re an adviser who is still, you know, focusing in network in network optimization, UCaaS, and those type of environments and driving a lot of value for your your customers that way, this might be another way to get in to the rest of the their tech stack. Hey.
What are you guys doing for FinOps? What’s what do the how do you manage your cloud spend? What are you doing across the board here? I have a great conversation to have with you if this is something that you’re that you’re still struggling with or something that you’re looking into.
It is a VP CIO type CTO type of conversation, but your IT director might even have an initiative on it type of contact as well. So it’s something that you can bring up. It’s it’s gonna be very simple where you if they go, what do you mean by this? The way that I would simply lay it out is, like, what we’ve noticed when companies get into, cloud and some other, you know, hybrid type of environments, controlling spend and getting buy in from everyone to make sure it’s the most optimized environment possible really needs a foundation and a structure to it.
That’s what FinOps has really come in with. We have a certified partner that can come in and help understand your environment and then put structure around it if needed if you guys are having problems with spin, sprawl, and things like that.
The other interesting area that I see this coming to, Paolo, is the advancement of AI. Because everything that we’ve seen I mean, it’s eerie. Everything that we saw early on in cloud adoption with failure rates, with struggles and understanding and the rapid movement and and some some confusion, we’re seeing with companies trying to go out and do AI as well right now. There’s an eighty plus percent failure rate.
There’s a lot of spend going on. There’s things called Neo Clouds that are coming out of the blue. Right. Neo Clouds are like your your core weeds, Lambdas, etcetera.
And I’m gonna give just a quick background on what a Neo Cloud is and the reason why that ties into this and how FinOps ties in all of it and where the future is going and Neo Cloud is essentially a cloud now based for AI deployments. It’s got faster GPUs, lower latency, all of these things. However, you can get a ton done through AWS, Azure, private clouds, etcetera. So, you know, Paolo, are you seeing it where FinOps is gonna start to migrate in and start to give recommendation and going, hey.
This workload, you don’t need a Neo Cloud. You’re overspending here. Or you do, you need to move that over here for a more workload efficient environment, things like that as this becomes a bigger and bigger platform?
No. It’s it’s a great question, and I’m gonna answer it in two ways. One, Synops is only gonna advise and say, you should. Right?
You should look at that. They’re not gonna tell you the how. What Tango is realizing and what we’ve been advising the the FinOps community and how we’ve been operating is, about last year, I I spread out of, just this infrastructure because knowing that all these things were growing like AI and even said, hey. SaaS and UCaaS is a part of it.
So recently, this year, we took the same conversation and said, well, AI is is also sprawling. Right? It’s it’s kinda like the next frontier that, like you just said, everybody’s getting into. And when when everyone spikes into something new, what’s gonna happen is unknown costs are suddenly gonna be jumping up.
We don’t know why. We were just taking on this project. The CEO said we need to be in AI. We all tried, and now we have these massive spikes in cost.
So, that begins twofold when there’s kind of, like, a new a new service area that gets popular, and it first starts with optimization. Everyone starts to say, gotta bring this cost down. Reduce it. What’s going on?
But Tango says, you need that, but you also need visibility. So Tango’s, tackling this in two ways. One is in our expense management side, we’re taking everything that’s, AI categorized from all the hyperscalers and kind of, you know, pulling it out and separating it, allowing it to be part of the overall, but also independently. So you can see exactly your AI cost, AI related cost through the hyperscalers.
Another way is, we always look for the best partnerships to give an over overviewing portfolio all inside of the TangoOne cloud product. So we have an optimization solution that is geared and focused towards AI and GPU because they’re so interlocked and interrelated in the hyperscaler spend. These GPU costs are what’s kind of running these AI services, and that’s where suddenly we’re gonna see a massive spike. It was, if I could give a in a an example earlier, it was kind of like storage.
Right? Everybody was using these large storage utilities because they were cheap until you realize that egress charges, taking the data back out, was suddenly very expensive. So everybody was optimizing by changing their storage or changing to something new or AWS and Azure were putting out new different types of storage utilities and services.
The same thing’s gonna happen here at AI. It’s gonna be sprawling and getting scary, but you can’t kill the project. Your your executive leadership said just said launch, and you’ve launched a product. Right?
Maybe you have one already or you’re looking at services. So Tango wants to attack these and always stay ahead of the curve, and we’re just gonna basically be using this as a talking point to customers. This might be your current problem statement to get them kind of hooked in because they need to solve an emergency today, but then also say, but you need overview, holistic visibility so that every alert, every every viewpoint, every service across any vendor is is coming into one place so you can see it all. So AI is certainly gonna be a let’s call it the the the tip of the spear in conversation for our our staff with our customers because it’s the next thing that we’re seeing even at Tango starting to spike.
Well and you’d mentioned a couple of things that this does. Right?
And we’re gonna get to the questions in the the panel. I’m gonna answer one.
With with hair like Josh is, he’s always welcome on screen. He’s coming up next to the next segment, so he’s hanging out, to answer that question.
And, yes, I am envious to answer any follow-up questions of the hair. The other piece of it, kinda getting back to the FinOps piece, you talk about visibility. And for an adviser, right, for you guys on the call, that additional visibility across everything they have going on, You also mentioned, PinOps doesn’t say do. They they say, we you know, here’s what’s going on.
The advisers, we can say do this. Right? We need to execute on this. We need to move forward on this.
And customers are inherently wanting someone to come in and give them guidance along with the recommendations, and this really sets everything up nicely for an additional sales on top of just the FinOps sale itself with Tango. It’s gonna recommend a lot of different potential management opportunities, moving things around, taking things out of a public cloud, moving them into a private cloud if it makes more sense. So there is a ton of different components that can come out of this.
What a great way to get additional visibility, bring a tremendous amount of value for your clients, and then drive drive additional, like, you know, perception changing models for your business into your client base. So, again, it’s it’s really gonna be across any type of vertical. Right? Like, health care, retail.
We see this Absolutely. Vertical. The key component is it really is a mid market grade and above conversation because you’re you have a lot of, like, dependencies on multiple parts of the organization come together to understand it. And if the company doesn’t have multiple parts of the organization, therefore, it kinda falls flat conversationally.
But anywhere mid market above, this can really lean on and hit. And you’re gonna go in in to the to Paolo’s point, the sales approach is gonna be we’re gonna make sure we have full visibility and everything going on to make sure you guys are aware of everything you have going on. Impeller, imagine there’s some tools and everything as you guys implement this that’ll showcase that. So then the second piece of it is from there, we’re gonna be able to figure out where we save you some money and if possible.
And that that could create additional pieces of it. You stack that as you’re doing this with if there’s a lot of inefficiencies with the customer’s team, say they do a lot of stuff internally, this can lead into a bigger like, how do I move them from an in source only company to a co source? I’ve seen FinOps be the driver for that where they’re like, hey. We do need some additional help.
We do need management of this, and we need to have everything, going from there. So I’m gonna go ahead and hit on some of the questions here as far as what we’re what we’re attacking as far as mid market. So mid market, if you guys want from are you wanting revenue or customer account? I’ll I’ll try to hit you on both.
So, Paolo, what do you what does Tango define as mid market for you guys first, and I’ll circle back.
Sure. And and we have to look at this because we have and we can independently sell IaaS services, SaaS services, UCaaS services. Right? From the infrastructure side, we look at spend. Right? They’re cloud spend per year. So for us, mid market is anybody spending one and a half to two million plus a year.
That’s where we’re seeing, you know, strong return and, you know, ROI on our services, both from an optimization standpoint. There’s enough there to justify the expense and and the return on the savings, but also there ‘s a lot of, like you said, sprawl and many business units in different departments where shadow IT can happen both even even on the SaaS space. Right? We look at SaaS. We’re looking at five hundred users plus at an organization.
A thousand plus is even better. You know, we we have customers that have ten thousand users, five thousand users, you know, eighteen thousand users plus because what happens is we do auto discovery on the SaaS side. So, you know, FinOps, we’ve been telling them it’s more than infrastructure. And on the SaaS side, this is where customers are spending more than they are in infrastructure. When you put hundreds of vendors together through this organization and a lot of duplicative vendors, a lot of people who have left the organization and still have licenses tied to them, they can’t renegotiate properly with confidence. So for us, that bid market is, five hundred to a thousand users plus.
I would say, and we just got a a note. Have you seen this be where it undermines a CIO, CTO? And I would assume there’s probably gonna be, you know, examples of everything, but we’re No. It’s a very good question. Like, entry point for this converse.
Yeah. Actually, to be honest, CIO, CTO tend to be our best advocate because they’re at an executive level where the undermining where we have to be careful is the layer right below them because that’s a person who is already managing it, being paid to manage and look at it. So that’s a persona we talk to about. You’re doing this today.
You understand that the, the nitty gritty details of everything. We can centralize it in one place. We can give you the viewpoints, the alerts, so you stay a hundred percent on top of it. You have ROI in your optimization, it’ll pay for itself.
And you get to work and talk to your CIO and CTO and be ahead of the game in everything, whether it’s through, dashboards, alerts, staying to budget, relationship of infrastructure and SaaS, all in one location for you, have optimization components ready through a third party adviser rather than directly through AWS.
The CTO CIO tends to look at that and say, wow. This is this has really got a handle on on everything, and it’s tied to my organization. And the CIO and CTO can talk to the, CFO, can talk to the the CPO, can talk to the CEO. Right? Because now they have all the information and nice visual dashboards to say, I’m on top of this. My team’s on top of this, and here’s how I can show you this information in, I’ll say, in layman’s terms that you’ll understand that fits your side of the business. So the persona actually tends to buy in after a while.
And, Devin, the answer to your question on when he was referring to he’s he’s talking about total users of the SaaS product. So that’s gonna be total number of employees, not just in the IT department.
Total employees across the organization. Correct.
Yeah. And then minimum spend. As we kinda wrap up, that’ll be the last question I have for you, Paolo.
Minimum spend on infrastructure, we really try to stay above one million a year only because any anybody spending less than that is too small of an organization or too small of a footprint that the customer tends to say the ROI and optimization, the ROI and the FinOps centralization isn’t enough. There’s not enough departments or anything. So that’s kind of the lowest we’ll go. We wanna be above that because then there’s massive, ability to bring teams together and centralize and ROI opportunities on optimization that it makes customers really see the ROI in going with Tango.
Well, Intango does have obviously, this is one one product within Tango. You also have your mobile expense management, your telecom Telecom expense. That’s right. So those are different entry points for everybody that wants to get involved. What I’ve seen with Tango is their teams are really good at expanding once they get into one avenue and reaching across and starting to to expand what they’re doing for the clients, of course, with the adviser working alongside them. So, Paolo, I really appreciate the information.
We will be sharing this deck if you guys are cool with that with the audience because they Absolutely.
Absolutely.
We’ll have some additional things in Tellur’s University over time to get in deeper around FinOps and how to take advantage of it. So thank you again for joining us.
Doug, we’ll Thank you for having me.
Thanks very much, Koby Phillips and Paulo Salari. Cleaning up closets all over the mid market range.
That’s a great presentation. Koby, I love the analogy. I wanted to give you just a a quick moment to go back through the focus acronym for a moment. FinOps open cost and usage specification and the importance of that not only for Tango, but for advisers who are trying to recommend this solution and offer these solutions to their clients. How does that play into it?
Sorry, Doug. My audio completely cut out when I went on mute for a second.
Can you repeat That’s alright.
I I just wanted to give you one more chance to talk a little bit more about FOCUS, the acronym, the FinOps Open Cost and Usage Specification. Such an important part of this solution and how advisors can leverage that in their conversations with clients.
Yeah. Absolutely. So the more customers are becoming FinOps aware and creating FinOps, personas within their organization, the first question they’re gonna ask is, are you focused standard enabled? So do you apply your does your product utilize this standardization of data, the naming conventions of columns, the naming conventions of service, the categorizations that all encompass what came out of this focused project, which is a standardization of all the different cloud vendors to say, this service is called this.
This category is called that. And we can say, yes. We are adhered to the latest version of Focus. It’s part of our dataset.
When you look at our reporting, when you go to build your own dashboards, you’re gonna see focus enabled columns and values. So you know with, confidence that if you’re trying to implement FinOps in your organization and you’re trying to build that practice internally at your company, the utility with Tango is gonna allow you to do that successfully.
Excellent. Such an important solution. Great discussion on FinOps. You made it extremely interesting. Thank you both.
Great presentation.
Thank you.
Koby, Paolo, thank you very much. Look forward to having you both back very soon.