In this in-depth article, you will discover why ITAM FinOps are more effective togetherStarting with the definition of ITAM, , we will explore its relevance for FinOps, analyze hidden costs beyond IaaS and PaaS , and understand the benefits of their convergence for a more strategic valuation of IT assets.
The adoption of the cloud is accelerating globally, with spending reaching$600 billion in 2023. However, this growth brings new complexities and inefficiencies: it is estimated that about30% of cloud resources are wasted, generating$180 billion in non-optimized costs (source"The State of Cloud Report”)
At the same time, more and more companies are migrating traditional on-premise softwareto SaaS solutions, also transferring license management to the cloud. This phenomenon, combined with the coexistence of traditional infrastructures and the cloud, has led to the emergence of a hybrid IT ecosystem, where cost control, governance, and resource optimization are becoming increasingly critical.
Two key factors further complicate the picture:
In this scenario, optimizing costs and ensuring a strategic use of resources becomes an absolute priority. FinOps was created with exactly this goal: it is a financial management framework for the cloud that promotes collaboration between technical, financial, and business teams to maximize the value of IT investments.
Codified by the FinOps Foundation, this approach helps organizations balance costs and performance, reduce waste, and make decisions based on concrete data. By following a continuous cycle of Inform, Optimize, and Operate, FinOps enables efficient, transparent, and strategic cloud resource management, seamlessly integrating into an increasingly hybrid IT management model. What is ITAM and Why is it Important for FinOps?
According to ITIL, an IT asset is is any valuable item that contributes to the delivery of an IT service. Therefore, IT Asset Management (ITAM) refers to the practices that enable the management, tracking, and optimization of IT assets throughout their lifecycle. If we extend this concept to cloud resources, clear parallels with FinOps emerge.
There are international standards, such as l’ISO/IEC 19770, which provide a reference framework for ITAM, supported by detailed ITIL documents that define best practices, ensuring effective management in compliance with regulations.
Most companies already have an ITAM program based on people, processes, and technologies to gain visibility and control over IT assets. However, the level of maturity varies: ranging from simple spreadsheets to advanced tools that, integrated with the asset lifecycle, enable automation and proactive management. We discussed this in our webinar “From Excel to AITAM: Innovative Methods to Manage Your IT Assets.”.
ITAM management in companies is usually divided into two main areas:
Those working in this field, particularly in Software Asset Management (SAM), handle governance, optimization, and compliancedaily, using monitoring technologies and having solid experience in managing financial and contractual IT resources.
However, the role of these figures can become a even more strategic through direct collaboration with the teams responsible for infrastructure, cloud resources, and costs. Decisions made in these areas directly influence IT asset management, making it crucial to integrate expertise for more effective and proactive control.
In an increasingly hybrid and complex IT environment, siloed thinking is no longer effective. A unified approach, where contracts, licenses, infrastructure, and cloud resources are managed cohesively from the outset, is the key to achieving more effective and strategic control over the entire IT ecosystem.
The convergence between ITAM and FinOps has also been recognized by FinOps Foundation, which has highlighted its importance by integrating ITAM principles into the FinOps processes. This approach promotes a unified strategy, combining on-premise asset management with greater financial visibility in the cloud.
It is no coincidence that their three operational phases are remarkably similar. Both frameworks, in fact, share a:three-phase approach:
Both frameworks start withvisibility and the collection of accurate data regarding costs, usage, and compliance:
This shared objective highlights how ITAM and FinOps, despite having distinct approaches, share the same mission: to provide control, optimization, and governance within an increasingly hybrid and dynamic IT ecosystem.
From the Integration of ITAM and FinOps to More Comprehensive Management This overlap demonstrates that the ITAM Manager already has the mindset, tools, and processes necessary to lead this evolution helping eliminate silos between IT, Finance, and OperationsThe future of SAM and ITAM lies through FinOps.
Both disciplines, in fact, share manycore principles:
ITAM focuses on on-premise hardware and licensing, while FinOps focuses on the cloud and virtual resource costs. By integrating the two disciplines, , a more complete and accurate management is achieved, enabling unified financial control across traditional and cloud environments, improvingtransparency and efficiency.
The integration between ITAM and FinOps can bring significant operational benefits,improving governance and optimizing IT costs. Here are some concrete examples where this synergy can make a difference:
1. Sizing of Cloud Resources and Impact on Software Licenses
One of the critical aspects of cloud management is thesizing of virtual instances and their impact on software licensing.
The licensing of SQL Server on virtual machines in Azure is determined by the number of vCPUs. If a company chooses an oversized VM compared to actual operational needs, it will end up paying more licenses than necessary, increasing costs without real performance benefits.
How ITAM and FinOps Can Intervene
A joint analysis between the two frameworks helps identify theoptimal sizing of instances, avoiding waste and ensuring compliance with Microsoft contracts. This approach not only reduces operational costs but also minimizes the risk ofnon-compliance.
2. Cost Optimization with Bring Your Own License (BYOL)
Many software vendors allow transferring existing licenses to cloud environments via theBYOL (Bring Your Own License)model, but proper management of this process is essential to avoid unexpected costs.
Oracle licenses can be transferred to AWS, but compliance depends on the number of cores used and the type of instance selected. If a company does not monitor instance allocation accurately, it risks exceeding contractual limits, exposing itself to audit risks and possible vendor penalties.
How ITAM and FinOps Can Intervene
An integration between FinOps and ITAM allows the selection of the most suitable instances, efficiently leveraging existing licenses and avoiding unexpected costs linked to improper use of cloud resources.
3. Shadow IT and Uncontrolled SaaS Proliferation
With the growing adoption ofSoftware-as-a-Service (SaaS)solutions, many companies are facing the issue ofShadow IT, i.e., the purchase of software tools by departments without centralized IT coordination.
Sometimes, different companies within the same group separately subscribe to Microsoft 365, Adobe Creative Cloud, or other SaaS solutions, without leveraging existing corporate agreements. This leads to licenseduplication, increased costs, and difficulty in IT governance.
How ITAM and FinOps Can Intervene
FinOps has traditionally focused on optimizingIaaS e PaaSresources in major cloud providers like AWS and Azure. However, the, SaaS now represents an increasingly significant portion of IT spending, requiring a more structured management approach. Rather than being “forgotten,” it is simply not always a priority for FinOps, which may lack the tools to address inefficiencies.
The integration withITAMbecomes crucial. By combining FinOps spending data with the ITAM database, overlapsand redundancies can be quickly identified, optimizing licenses and negotiating better contracts with vendors.
FinOps may not have the method or capability to address SaaS inefficiencies alone. This is whereSoftware Asset Management (SAM)comes into play: thanks to its ability to analyze license data and support strategic commercial discussions, SAM allows achieving even moretangible and effective results.
4. IT Asset Lifecycle Management and Cloud Resources
The migration of workloads to the cloud must be accompanied by careful management of on-premise resources, to avoid continued unnecessary costs from unused assets.
After migrating workloads to the cloud, many companies forget todeactivate and properly decommission the corresponding physical servers, continuing to pay maintenance and support contracts for unused hardware.
How ITAM and FinOps Can Intervene
With integrated management between the two frameworks, the entire lifecycle of IT resources can be tracked, ensuring that licenses, contracts, and physical assets are correctly decommissioned or reallocated, avoiding wasteand optimizing the IT budget.
Once the principles ofITAM e FinOpsintegration are understood, the next step is to equip oneself with theright tools to collect accurate data and automate management. Without technological support, there is a risk of losingvisibility,optimization opportunities, and increasingoperational complexity.
We needintegrated solutionsthat combine ITAM and FinOps data for more effective management.ITAM already has tools for monitoring and managing the ITasset lifecycle, but can they be expanded for even more precise control?
The answer isyes. Flexera, a leader in ITAM and FinOps solutions, has anticipated this evolution, transforming its platform into a single solution capable of providing a comprehensiveview of IT assets, both on-premise and in the cloud, allowing companies to optimally managecosts, licenses, and resources.
AtWEGG , we support companies in integratingapproaches and technologies, helpingITAM Managercommunicate with other business functions to make moreeffective decisions.
Abbiamo approfondito questi temi nel webinar “Il futuro del SAM: perché il SAM Manager non può ignorare FinOps”, che si è tenuto il March 20. Durante l’evento abbiamo how to apply FinOps principles in ITAM, abbiamo analizzato concrete integration cases e presentato technologies supportingthis new approach.
Insights
OUR OFFICES
OUR OFFICES
PADUA
Via Arnaldo Fusinato 42, 35137
MILAN
Viale Enrico Forlanini 23, 20134
ROME
Viale Giorgio Ribotta 11, 00144
Copyright © 2022 WEGG S.r.l. • P.I 03447430285 • C.F. 02371140233 • REA 311023
Certified company ISO 9001:2015