Jay Litkey, Governing Board Member, FinOps Foundation and SVP of Cloud & FinOps, FlexeraApril 7, 20254 Min ReadArtemisDiana via Alamy StockOver the last few years, FinOps has become synonymous with cloud financial management, helping organizations optimize cloud spending and usage. As cloud adoption stabilized, the operational framework and cultural practice of FinOps matured.Teams -- representing collaborative efforts between business, finance, engineering, and other groups -- established robust practices, creating a healthy and maturing market.That era established a strong foundation in optimizing the costs associated with public cloud computing. Today, the scope of FinOps has expanded in important ways, going beyond cloud to deliver comprehensive insights into IT spending across SaaS and data centers. Three main trends will continue to move FinOps forward in 2025.FinOps Expands: SaaS and Data CentersBy applying FinOps principles to areas of IT spending in addition to cloud computing, the practice of FinOps is growing. These principles include collaboration; a focus on the business value of technology investments and considering a unit economics perspective; accountability for the costs associated with tech usage; prioritizing centralized initiatives; making FinOps data available in a timely manner; and understanding how variable costs can help deliver value.Related:The operational framework of FinOps now includes two new scopes, to which FinOps practitioners apply FinOps practices. As established by the FinOps Foundation, the new scopes apply specifically to SaaS and data centers.This expansion provides valuable guardrails to keep spending in-check in important ways.SaaS integration: The rise of software-as-a-service (SaaS) brought new challenges, notably subscription sprawl and underutilized licenses. Similar to the challenges of cloud spend, SaaS spend is often exacerbated by decentralized IT purchasing. Companies are applying FinOps principles to manage SaaS spending and optimize its value, extending beyond cloud platforms. This approach can help manage the complexities of varied pricing and licensing approaches.Data center inclusion: As organizations transition to hybrid environments, the need for comprehensive financial management across all domains increases. License portability, bring your own license (BYOL) policies, and the need to manage entitlements across cloud and on-premises systems have become critical. FinOps principles, capabilities and best practices now serve as the data backbone for managing costs and usage across these domains, offering a comprehensive evaluation, rather than letting these areas remain siloed, as has often been the case. By applying the framework of FinOps to include data centers, organizations can move beyond a focus on hardware to a more comprehensive approach suited to the role of data centers as part of hybrid environments.Related:FinOps Meets Innovation: Artificial IntelligenceSpending on artificial intelligence, including generative AI, is the new cloud challenge: opaque, sprawling, and often unmanaged. Fortunately, FinOps provides an effective approach for managing AI-specific resources, such as SaaS-based AI tools (including ChatGPT and Microsoft Copilot), private large language models (LLMs), and on-premises resources, such as graphics processing units (GPUs). With ChatGPT, gaining market share and moving into the ranks of a top software vendor based on spend, the urgency to gain insight and control of AI is growing rapidly.Whether it's for skunkworks projects or mainstream enterprise initiatives, FinOps programs now include AI as a core use case, helping address the question of who is responsible for managing AI spend. FinOps practitioners can forecast and estimate the expenses related to AI implementations and workloads across an organization. This can help illustrate the full picture of how AI and GenAI are being used enterprise wide. Its also an important step for minimizing the risks associated with shadow AI, when staff install and use AI products, without informing the wider business.Related:Market Validation: Collaboration Across ITAM, SaaS, and CloudThe market is making it clear: multiple domains require effective collaboration in order to optimize IT environments. FinOps has become that go-to framework for solving the problems that span cloud, SaaS, and on-premises environments.The Flexera 2024 State of ITAM Report, drawing on a survey of more than 500 technical professionals, showed that collaboration between FinOps and IT asset management (ITAM) teams is growing, with 32% of ITAM teams engaging with FinOps in 2024, up from 25% in 2023. As collaboration matures between FinOps and ITAM teams, efficiencies will grow, illustrating (and shoring up) the significant visibility gaps into sprawling IT.This plays an important role for SaaS, including for SaaS-based AI. Cloud optimization maturity is also on the rise, with heavy optimization for SaaS services increasing to 11%, while basic optimization holds at 43%.Collaboration across all of these teams is essential for ensuring that your business is getting value from its technology investments, while actively managing the associated expenses. Evaluating your organizational approach is crucial. Disparate approaches are no longer the answer.Todays business leaders need comprehensive insights into spending, driving an operational imperative for clarity across all IT spending categories. The expanded scope of FinOps reflects the realities of hybrid IT, making FinOps a central player in the financial and operational governance of modern technology ecosystems.About the AuthorJay LitkeyGoverning Board Member, FinOps Foundation and SVP of Cloud & FinOps, FlexeraJay Litkey is a governing board member of the FinOps Foundation and serves as SVP of Cloud & FinOps at Flexera. He joined Flexera through the acquisition of Snow Software, where he played a pivotal role following Snows acquisition of Embotics, a company he founded. He has over 25 years of executive leadership experience (CEO, president, EVP) in enterprise software, SaaS, FinOps, and Internet companies.See more from Jay LitkeyWebinarsMore WebinarsReportsMore ReportsNever Miss a Beat: Get a snapshot of the issues affecting the IT industry straight to your inbox.SIGN-UPYou May Also Like