The COVID-19 pandemic marked a significant shift in the way businesses operate, with many companies accelerating their move to digital platforms. This trend has continued even as the pandemic subsides, with cloud adoption showing no signs of slowing down. According to Gartner estimates, global end-user spending on public clouds will reach over $599 billion in 2023, up from $421 billion in 2021 and nearly $500 billion in 2022.
The Challenge of Overspending in the Cloud
However, not every enterprise has adjusted well to this new norm. One major challenge they’re facing is overspending on cloud resources. A recent Forrester report found that 94% of companies have experienced avoidable cloud expenses due to underused and overprovisioned resources, a lack of in-house talent to oversee cloud infrastructure, and other related factors.
The Rise of FinOps: Abstraction Away Cloud Orchestration and Optimization
In response to this challenge, a new market has emerged focused on providing tools to abstract away cloud orchestration and optimization tasks. This sector is known as FinOps (Financial Operations), and it’s designed to help businesses track and reduce their cloud spend.
Competition in the FinOps Sector: Cast AI Raises $35 Million
One of the more successful ventures in this space is Cast AI, which today announced that it raised $35 million in a Series B round led by Vintage Investment Partners with participation from Creandum and Uncorrelated Ventures. This brings Cast AI’s total raised to $73 million, which will be put toward product development and growing its team of just over 100 employees.
Cast AI: A Tool for Automating Cloud Optimization
Cast AI was co-founded by Yuri Frayman, Leon Kuperman, and Laurent Gil in 2019. The trio’s inspiration came from their previous company, Zenedge, a cloud-based cybersecurity firm that Oracle acquired in 2018. At Zenedge, they struggled to keep up with the costs of cloud infrastructure, leading them to develop Cast AI as a solution.
Cast AI uses machine learning algorithms to analyze an organization’s cloud usage patterns and identify areas where costs can be reduced. It then automates the process of optimizing these resources, ensuring that businesses get the most value out of their cloud investments.
A Market in Need: The Growing Importance of FinOps
The market for FinOps solutions is growing rapidly, driven by the increasing adoption of cloud computing and the need for businesses to control costs. According to Frayman, customers are looking for unbiased sources of truth to help them navigate the complex world of cloud finance.
"We don’t care if Google, Amazon, or Microsoft make more money," Frayman said. "We ultimately are responsible for customer savings, and that’s what we deliver."
Conclusion: FinOps is Becoming an Essential Part of Cloud Adoption
The rise of cloud adoption has created a new set of challenges for businesses, particularly when it comes to managing costs. The emergence of FinOps solutions like Cast AI provides a much-needed tool for companies looking to optimize their cloud spend.
As the market continues to grow, we can expect to see more innovative solutions emerge in this space. For now, however, it’s clear that FinOps is becoming an essential part of cloud adoption, and businesses would do well to take notice.
Related Topics:
- Cast AI: A tool for automating cloud optimization
- FinOps: Financial Operations, a sector focused on providing tools to abstract away cloud orchestration and optimization tasks
- Cloud Adoption: The trend of businesses moving their operations to the cloud
- Overspending in the Cloud: The challenge faced by many companies when it comes to managing costs in the cloud
Sources:
- Gartner estimates, 2023
- Forrester report, 2022
- Cast AI press release, 2023