Why Traditional FinOps Tools Fail in True Multi-Cloud Environments

As organizations adopt multi-cloud—encompassing a mix of on-premise, private, and public clouds—the limitations of traditional FinOps tools become increasingly apparent. These tools, primarily designed to manage costs for hyperscalers like AWS, Microsoft Azure, and Google Cloud, are ill-equipped to support the full spectrum of cloud environments, which now includes niche providers like DigitalOcean and regional players such as Gcore and Leaseweb.

Here’s a deeper look into why traditional FinOps tools fail in true multi-cloud environments, leaving FinOps professionals struggling to maintain cost control, optimization, and governance in today’s complex landscape:

Complexity of hybrid and multi-cloud management

Hyperscalers offer standardized APIs, billing structures, and usage metrics that traditional FinOps tools are specifically designed to track. However, they fall short when you introduce a complex mix of on-prem infrastructure, private clouds, and niche or regional providers like DigitalOcean and Leaseweb.

• Non-standardized APIs
  While hyperscalers offer detailed APIs for cost tracking and optimization, other providers may not support the same level of integration or detail. On-prem and private clouds, in particular, lack the granular usage data that public clouds provide.
• Interoperability struggles
  Traditional tools do not have consistent visibility across all environments. As a result, they can’t handle dynamically shifting multi-cloud workloads and the resulting cost fluctuations either.

For FinOps professionals, this inability to track costs effectively across hybrid and multi-cloud environments results in inefficiencies and missed savings opportunities.

Diverse pricing and usage models

Public cloud providers offer a variety of pricing models—pay-as-you-go, reserved instances, spot instances, and different SLAs.Traditional FinOps tools are usually built around these models but falter when applied to different pricing models of niche or regional cloud providers.

• Different billing models
  Each provider comes with its own unique billing structure. For example, DigitalOcean is known for its simple, flat-rate pricing model while regional players like Gcore often provide specialized pricing for regional markets. Traditional tools fail to adapt to these differences, making it harder to achieve cost efficiency.
• Mismatch in optimization strategies
  FinOps tools designed for hyperscalers apply the same optimization tactics that work for hyperscalers to other clouds, leading to inefficiencies or missed opportunities.

Without the ability to capture the nuances of each provider’s pricing and usage model, FinOps professionals are left without a clear path to cost optimization across the full breadth of their multi-cloud infrastructure.

Dynamic and evolving multi-cloud strategies

Organizations using multi-cloud environments often adopt highly dynamic strategies. They switch between providers based on performance, pricing, or changing business needs.

• Cloud arbitrage
  The practice of dynamically switching providers based on real-time pricing or performance—requires real-time visibility across clouds, which traditional tools often lack.
• Evolving provider choices
  As companies shift to new providers or adjust workloads based on geopolitical risks or performance, traditional tools become rigid, failing to capture this fluidity.
• Workload migration challenges
  Moving workloads across disparate environments introduces egress costs that traditional FinOps tools can’t comprehensively appreciate.

Traditional FinOps tools, which assume steady-state operations within a single provider, struggle to keep up with the agility required for multi-cloud strategies.

Limited multi-cloud governance

Governance becomes a major hurdle when each cloud provider has its own compliance, security, and cost management standards. FinOps tools do not focus much on governance, primarily addressing cost controls and spending policies only. Even so, they fail to extend their limited governance capabilities across all cloud providers.

• Tagging inconsistencies
  Each cloud provider uses its own system for resource tagging, making it hard to allocate costs accurately across providers.
• Diverse compliance needs
  Each cloud adheres to distinct compliance requirements based on its region or industry. Since FinOps tools often lack a nuanced understanding of these regulatory constraints, they can increase the risk of non-compliance.

Achieving usage and cost optimization, in reality, is impossible without consistent governance across multiple clouds.

Data silos and integration gaps

In a multi-cloud environment, organizations often deal with data silos, where each cloud provider generates its own isolated datasets for usage, performance, and cost.

• Inconsistent data formats
  Billing and performance data from on-prem systems, niche providers, and hyperscalers is usually in different formats. This inconsistency makes it difficult for FinOps tools to aggregate this data centrally.
• Limited integration
  Traditional FinOps tools usually lack built-in integration and require extensive customization and manual intervention to cover non-standard providers. This adds to operational overhead and restricts real-time cost visibility.

Without seamless data integration across all clouds, FinOps tools offer flawed analysis and suboptimal financial decisions.

The Future of FinOps in Universal Integration

Traditional FinOps tools are doomed to fail in true multi-cloud environments because they lack the adaptability, flexibility, and scope to handle the inherent complexity of managing costs across public, private, and niche cloud providers. At best, they cater only to renowned, hyperscale environments.

In an environment where cross-platform integration, diverse pricing models, and dynamic workload shifting are the norms, organizations need modern FinOps solutions that offer:

• Consistent view of cost and usage data
• Unified, cloud-agnostic governance and cost management capabilities
• Real-time optimization capabilities based on changing requirements

Without these capabilities, organizations simply cannot hope to manage, optimize and govern cloud spend in a true multi-cloud environment.