SAM and FinOps

Cost transparency is the precondition for any economical IT

In a hybrid IT world, classic Software Asset Management (SAM) and modern cloud financial management (FinOps) merge. The goal is seamless control over licences, subscriptions, and variable cloud costs to avoid waste and minimise compliance risks.

FinOps is not a one-time project, but a continuous cultural change that brings engineering, finance, and management to the same table. The operational discipline behind it, from tagging through unit economics to right-sizing, is deepened by the FinOps topic.

flowchart LR
    subgraph SAM[Software Asset Management]
        S1[Licence estate]
        S2[Compliance check]
    end
    subgraph FIN[FinOps]
        F1[Cloud usage]
        F2[Unit economics]
    end
    I[Inform: create transparency] --> O[Optimize: reduce cost]
    O --> P[Operate: establish processes]
    P --> I
    S1 --> I
    S2 --> I
    F1 --> I
    F2 --> O

Anti-Patterns: The Cost Explosion

Unplanned cloud usage (Shadow IT), incorrectly sized instances, and forgotten subscriptions lead to massive budget overruns. At the same time, classic on-premise licences carry the risk of heavy penalties for under-licensing in audits. Without clear accountability for Unit Economics (what does a single user / a transaction cost us?), IT remains an unpredictable cost factor.

The Integrated Management Cycle

1. Transparency (Inform): Real-time visibility of all IT expenditure. Allocation of costs to teams, products, and projects (tagging strategy).
2. Optimisation (Optimise): Identification of savings potential through right-sizing, use of Reserved Instances or Spot Instances, and elimination of unused licences.
3. Operation (Operate): Establishing processes in which developers take financial responsibility for their architectural decisions.
4. License Governance: Automated monitoring of compliance requirements for proprietary and open-source software.
5. Benchmarking: Comparing organisational efficiency against industry standards.

The Focus: Value Creation Rather Than Just Cost Savings

FinOps does not mean spending less, but generating more value per franc invested.

FAQ

Why do our cloud costs fluctuate so much every month?

Because cloud infrastructure is billed on a usage basis. FinOps helps understand these fluctuations, make them predictable, and correlate them with business outcomes.

Is SAM still relevant in times of SaaS?

More relevant than ever. SaaS Sprawl is today the greatest compliance and cost risk. We need to know who has subscribed to which services and where sensitive company data resides.

References

• J.R. Storment, Mike Fuller Cloud FinOps. The standard work on cloud financial management: transparency, optimisation, and cultural change. (2019). www.oreilly.com/library/view/cloud-finops/9781492054610/
• FinOps Foundation FinOps Framework. The global community and framework for cloud financial management. (2019). www.finops.org
• ISO ISO/IEC 19770 IT Asset Management. The international standard for IT Asset Management. (2017). www.iso.org/standard/68458.html