Jul 31 2025
Cloud

3 FinOps Strategies for SMBs to Optimize Cloud Spending

The cloud isn’t a plug-and-play, cost-saving machine, but with a strategic approach to FinOps, SMBs come out ahead financially.

The cloud allows small and medium-sized businesses to go to market faster and grow with less capital. However, 84% of businesses identified managing cloud spending as their top challenge. This isn’t indicative of an inherent flaw with the cloud, though, and experts caution SMBs and startups away from knee-jerk repatriation.

“Repatriation consumes significant investment and upfront costs for space, hardware and migration programs,” says Ranjit Shenoy, executive adviser for FinOps at Flexera. “It also shifts the onus of several ongoing responsibilities to the organization’s employees or suppliers.”

Not to mention, many SMBs lack the capital to repatriate at all.

The antidote to cloud cost complexity, according to Shenoy, is to prioritize FinOps, or cloud cost allocation management. To this end, experts have identified three core strategies that can help SMBs come out ahead financially in the cloud.

Click the banner below for a more detailed explanation of how to optimize FinOps.

 

1. Establish a Hub-and-Spoke Approach for Businesswide FinOps

The FinOps Foundation calls FinOps “an operational framework and cultural practice.” It must be a formal undertaking that a particular practitioner is tasked with owning.

“Within startups, we often see the FinOps practitioner appointed from engineering, given the combined knowledge of the technology and costs,” Shenoy says. “This might be an additional responsibility for a senior engineering colleague, depending on the amount of cloud spending.”

He adds: “For SMBs, FinOps is likely to start as an IT directive, with someone from IT appointed to take up the FinOps practitioner role who then interlocks with other stakeholders from across the business.”

Shenoy calls this a hub-and-spoke model. The FinOps practitioner is the hub. Whether this person works on FinOps part-time or full-time will depend on factors such as the size of the business and the investment in the cloud. Either way, the FinOps practitioner works with a person from each department or project (the spokes) to help optimize that slice of cost.

“This approach drives clarity for individuals and teams and helps to set out unit economic measures and FinOps key performance indicators,” Shenoy says. 

EXPLORE: Find out how your peers are approaching cloud adoption in 2025.  

2. Track and Publish Cloud Spending Data

The cloud has ample real-time dashboards and automated alerts to track cloud costs. AWS Budgets, Azure Cost Management and a bevy of third-party managed services can flag anomalies before they become surprises.

But businesses must still prioritize certain KPIs to maximize cost-effectiveness. Part of that lies in implementing the aforementioned hub-and-spoke model. The other part is carefully selecting which KPIs to track and, crucially, sharing that data with the lines of business.

“Increasing visibility of the contribution each application makes to the overall costs will motivate application or department owners to take ownership of this value to then drive improvements,” Shenoy says.

Other core metrics to track include cost-per-compute hour, data storage costs and transfer costs (which tend to run higher than other costs). Over time, the FinOps practitioner can analyze these, start to expect baselines, and set goals and alerts from there to yield improvements.

Ranjit Shenoy
Increasing visibility of the contribution each application makes to the overall costs will motivate application or department owners to take ownership.”

Ranjit Shenoy Executive Adviser for FinOps, Flexera

The more a business understands its cloud costs, the easier it is to identify savings. Some SMBs may even be able to move toward reserved instances, which lock in a lower price over a longer period of time. 

3. Automate Cloud Management and FinOps Reporting

The obvious candidates for automation include turning off idle resources, autoscaling workloads and rightsizing instances based on usage trends.

But the FinOps practitioner — most likely an IT decision maker — will still be saddled with additional work, especially when it comes to gathering analytics. 

“If done manually, this consumes a lot of time and effort, diverting the focus to gathering the data as opposed to reporting, investigation and analysis,” Shenoy says. “This is much more taxing in a multicloud environment, with billing in multiple countries and currencies.”

The FinOps practitioner will also need to deliver information to end users “with the appropriate business context and access controls, adding significant complexity to a manual process or a custom-built solution,” Shenoy says. Finally, “optimization opportunities need to be gathered, collated and distributed to the appropriate technical stakeholders.”

DIVE DEEPER: The multicloud is helping manufacturers get better analytics. 

To offset that labor, Shenoy encourages SMBs to automate reporting so that the right information is delivered to the teams that need to take action. Plenty of solutions and services exist to help with this. Some tools, such as Flexera, come with prebuilt integrations that simplify data-sharing among stakeholders. 

Shenoy also recommends that cloud-heavy SMBs join the FinOps Foundation as a way to collaborate with practitioners from other businesses, for free. In addition to recommending the best FinOps tools for specific functions, the community has ample resources for practitioners. 

“The FinOps framework and supporting artifacts have a lot of best practices,” Shenoy says. “They’ve been built from the experiences and contribution of FinOps practitioners from all across the globe.”

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