Every year, the FinOps Foundation releases the State of FinOps Report, capturing how organizations manage cloud costs, where they are struggling, and what is changing in FinOps. The report is a snapshot of how teams are balancing optimizing their IT investments with engineering priorities, and this year’s findings show that the scope of FinOps continues to expand.
TL;DR
- Reducing cloud waste is the top priority, and FinOps is expanding – While workload optimization is the primary focus, teams are broadening their scope to include SaaS, software licensing, private cloud, and data center costs.
- Rate optimization, ranked as a FinOps priority, decreased year-over-year, but there is more to do – As FinOps practitioners achieve better results in commitment management (as evidenced by the year over year increase we have observed in Effective Savings Rates), they are shifting focus to other priorities. However, that increase in savings can come at the expense of future engineering flexibility, unless sophisticated commitment strategies enabled by automation are used.
- Automation and tooling are critical to scaling FinOps – Due to the deepening complexity within cloud management and an expanding scope beyond cloud, teams are investing in automation as a top current and future priority. The ability to leverage purpose-built autonomous platforms that execute on the user’s behalf, such as ProsperOps’ Autonomous Discount Management service, frees up FinOps practitioners to focus on other cost optimization initiatives where human judgment is critical.
- Governance is a top future priority – FinOps teams are shifting from reactive cost-cutting to proactive governance, focusing on policies like budget controls, compliance tagging, and real-time cost monitoring.
- AI cost management is in its early stages – While AI investments are increasing, most teams are still focused on the visibility of AI costs rather than optimizing them.
- FOCUS adoption is growing, but challenges remain – More teams are adopting the FinOps Open Cost and Usage Specification (FOCUS), but they cite challenges, such as skill gaps.
Waste Reduction Remains the Top Priority as the Scope of FinOps Broadens
Similar to the 2024 State of FinOps Report, workload optimization and cloud waste reduction are the top priorities for FinOps teams, and more than 40% of FinOps practitioners say workload optimization is their primary focus.
Eliminating cloud waste at scale is complex because it requires human decision-making and impacts engineering. For example, engineering teams must validate rightsizing recommendations to ensure that performance and reliability are not compromised. FinOps teams can find themselves stuck in a break-fix cycle, reacting to cost increases from their dynamic cloud environments, rather than achieving long-term efficiency.
This year, we also saw the broadening scope of FinOps, with managing costs beyond public cloud as a top priority. What started as a practice focused primarily on public cloud cost optimization has now grown into a broader “Cloud+” approach, where FinOps teams are expected not just to manage cloud spend, but also SaaS, software licensing, private cloud, and data center costs. 40% of FinOps teams already manage SaaS spend, and that number is expected to rise to 65% within the next 12 months. Private cloud management is also increasing from 24% to 39%.
It is unsurprising that cross-team collaboration is increasing with other disciplines, such as IT Financial Management (ITFM), IT Service Management (ITSM), Technology Business Management (TBM), IT Asset Management (ITAM), etc. More than 50% of FinOps practitioners say that they collaborate with the broader ITFM team, an increase from 2023.
Rate Optimization Is Lower Priority but Flexibility Requires Sophisticated Automation
Rate optimization decreased in priority this year compared to being the second-highest priority in 2024. This shift is primarily due to organizations achieving better results from commitment-based discounts, as evidenced by the improvement in Effective Savings Rate (ESR) y-o-y. For example, AWS Compute ESR increased from 21% to 26% from beginning of 2022 to September 2023 based on ProsperOps’ ESR Benchmarking and Insights Report last year. Preliminary analysis on 2024 data suggests the same improvement trend.
However, purchasing commitments without a strategy carries significant risks. Aggressive commitment strategies that rely heavily on rigid, long-term discount instruments can leave organizations locked into one-year or three-year terms without flexibility, making them vulnerable if usage declines. On the other hand, committing too conservatively, in which a larger percentage of the usage is subject to the on-demand rate, can result in missed savings.
ProsperOps is a leading FinOps automation platform that balances cost reduction with maximizing flexibility for dynamic cloud environments. With sophisticated algorithms, ProsperOps adjusts commitments to changes in usage to optimize cost while also taking into account lock-in risk. As one customer puts it:
“ProsperOps tracks our AWS compute usage and adapts commitments to usage changes, increasing our Effective Savings Rate to the absolute maximum possible and reducing financial liability,” says VP of Infrastructure Engineering at CleverTap.
Automation & Tooling Help Manage Increasing FinOps Workloads
FinOps practitioners are increasing their workloads across an average of 12 capabilities, and 34% agree that they need to invest in automation and tooling to achieve their priorities (a 20% increase from last year). Not only can automation help offload repetitive tasks and save time for FinOps practitioners to focus on other initiatives, it can also achieve better optimization results.
This is especially true for rate optimization. Manually managing commitments takes up resources, time, and effort that can be leveraged elsewhere where human decision-making may be more important. A DIY/ manual approach requires FinOps practitioners to continuously monitor, forecast, and execute on commitments. However, with purpose-built automation platforms that watch the environment and operate autonomously, such as ProsperOps, managing commitments becomes more effective and easy to administer. Here is how one customer describes the benefit of using ProsperOps:
“Truly a set-and-save solution. Not only did our Effective Savings Rate increase significantly, but the amount of time we spend buying and managing commitments has been reduced substantially,” says FinOps Lead at Boomi.
As FinOps continues to scale, teams must rethink how they allocate their time. Automation does not replace FinOps practitioners; it amplifies their impact and accelerates the organization’s FinOps journey.
Shift Left – Governance Set to Take the Lead in FinOps Priorities
Looking ahead, governance and policy enforcement is set to become the #1 FinOps priority over the next 12 months, ahead of workload optimization, which is expected to drop 21%.
This change reflects a natural progression in FinOps maturity. Organizations want policies to prevent uncontrolled spending as soon as their engineering teams start application development; examples include budget controls, compliance tagging, and real-time cost monitoring. FinOps teams are moving beyond reactive cost-cutting and shifting toward proactive governance models that help maintain efficiency at scale.
Managing AI Costs Starts with Visibility
While organizations are increasing their AI investments, most FinOps practices are focused on simply understanding AI spend, which includes activities such as reporting and analytics, data ingestion, forecasting, and allocation. As AI cost management matures, usage and rate optimizations may become higher priorities.
FOCUS Adoption Grows but Sustainability Efforts Remain Stagnant
A major development in FinOps standardization is the growing adoption of FOCUS (FinOps Open Cost and Usage Specification). As organizations strive for greater transparency and consistency in cloud cost reporting, more teams are turning to FOCUS to standardize billing data across providers. 57% of FinOps practitioners plan to adopt FOCUS in the next 12 months, of which 54% plan on integrating it into their data pipeline.
However, adoption is not without its challenges. Teams cite time constraints, skill gaps, and dependency on billing providers as pain points for FOCUS adoption. Many organizations are also waiting for wider SaaS adoption of FOCUS before fully committing.
Meanwhile, sustainability and reporting on cloud carbon is a low priority in FinOps. Despite predictions that cloud carbon tracking would increase in importance, adoption has remained largely flat globally, with only a 1% change compared to 2024.
For most teams, cost efficiency still drives decision-making far more than environmental impact. Without stronger reporting capabilities from cloud providers and direct financial incentives for sustainable practices, this is unlikely to change in the short term.
Final Thoughts
The 2025 State of FinOps Report makes one thing clear – FinOps is evolving rapidly, and teams are being asked to do more. As organizations expand their scope beyond the public cloud into SaaS, licensing, and private cloud, the challenge is not just cost optimization but also managing complexity at scale.
FinOps teams cannot afford to be stuck in reactive cost-cutting cycles – they need proactive policies, standardized processes, and autonomous vendor solutions that eliminate manual overhead and achieve more than what is humanly possible. At ProsperOps, we believe automating rate optimization is one of the most effective ways to reduce cloud costs without adding to engineering effort. By eliminating the complexity of managing commitments, FinOps teams can shift their focus to other higher-value initiatives – whether it is refining unit economics, driving AI cost visibility, or strengthening cross-team collaboration.
As FinOps grows in scope, teams that embrace automation will likely be able to scale quickly. Those still relying on manual processes will find it harder to keep up.
Book a demo to see how ProsperOps reduces cloud costs, maximizes flexibility, and automates commitment management with zero manual effort.
