The accelerating shift to the hybrid cloud has forever changed the management of data-centric applications, and it’s also turning the traditional IT spending model on its head. For decades, IT spending largely centered around balancing ongoing costs for things like licensing, energy, and maintenance with significant, cyclical investments, or capital expenditures (capex), every few years in IT enhancements and hardware and software upgrades. IT managers, finance leaders, and procurement struggled with the complicated, frustrating process of analyzing spreadsheets and reports in order to lay their bets on which hardware and infrastructure investments would deliver the best value in the years ahead.
This model is starting to change. With the increasing move toward hybrid cloud and cloud-led serverless and storageless environments, many companies are now refocusing more of their IT dollars from capex to the ongoing operational expenditures (opex) associated with cloud. According to International Data Corporation (IDC), spending on public cloud IT infrastructure for the first time exceeded the level of spending on noncloud IT infrastructure in Q2 2020, increasing nearly 48% year over year, reaching $14.1 billion. During the same period, investments in noncloud IT infrastructure actually declined nearly 9%.
At NetApp, we believe that understanding our costs and their associated value helps us to strategically use our resources to fund digital transformation and ultimately to better serve our customers, partners, and investors. That’s why NetApp IT is exploring FinOps, or cloud financial management, particularly as it relates to CloudOne, our all-in-one hybrid cloud platform for our software development and operations.