Report:

Magic Quadrant for Cloud Financial Management Tools

Top Vendor Products for Cloud Financial Management Tools in 2024

• Broadcom (VMware)
• Flexera
• IBM

Cloud Financial Management Tools Vendor Product Comparisons 2024

• Broadcom (VMware) - Leader
  

  Pros:

  • Track record in market: VMware Tanzu CloudHealth has a very large and diverse client base, with a reputation for reliable service delivery.
  • Core IaaS cost management: VMware Tanzu CloudHealth scores well in IaaS workload optimization, and in cost allocation and reporting for cloud infrastructure resources. This should appeal to large virtual machine deployments.
  • Channel partner support: There is solid support for multicustomer operations and VMware Tanzu CloudHealth is used by many resellers and managed service providers to deliver CFM services to end customers. This increases the likelihood of enterprises combining it with a third party that offers management services.

  Cons:

  • New feature release velocity: VMware Tanzu CloudHealth has not kept pace in recent years with some of the other vendors' solutions evaluated in this research in terms of new features, such as cost optimization for cloud-native PaaS services and cloud financial planning.
  • Limitations in autoremediation: VMware Tanzu CloudHealth provides a limited set of remediation actions out of the box and mostly expects the user to implement remediation. Planned enhancements are in beta.
  • Future pricing uncertainty: Broadcom's acquisition of VMware has resulted in dramatic changes to the structure and pricing of many VMware products. It remains to be seen if these changes will impact the cost of licensing and support for VMware Tanzu CloudHealth in the coming years.


• Flexera - Leader
  

  Pros:

  • Migration support: Flexera supports analysis of cloud-to-cloud migration, specifically extensive what-if migration scenario analysis.
  • ITAM integration: The Flexera One platform provides strong integration with Flexera's ITAM and license management capabilities, enabling a better understanding of the total cost of ownership for workloads.
  • Versatile reporting: Flexera supports both engineering and business use cases, with several layers of KPI tracking available. This also enables support for multiple personas.

  Cons:

  • Advanced billing: Flexera trails some of the other vendors evaluated in this research in providing advanced billing management.
  • Commitment support: The CFM solution does not provide limited logic capabilities needed for commitment management, and lacks support for commitment pooling or reselling.
  • Coding required: The CFM solution requires some coding to fully leverage its capabilities. While that opens up customizations, it may be an inhibitor for clients that are not familiar with writing code.


• IBM - Leader
  

  Pros:

  • Market traction: IBM has a large and growing client base, demonstrating capabilities in large and demanding environments. Its strong market understanding supports its efforts to meet customer needs.
  • Financial planning: IBM's ability to plan cloud spending is beyond the capability of most other vendors in the CFM market. This leads to better accuracy in predicting spending and better support for the finance team in managing cloud budgets.
  • Business context mapping: IBM's unit economics capabilities enable enterprises to connect cloud costs to business objectives.

  Cons:

  • Roadmap: There is uncertainty regarding particular aspects of the roadmap, specifically around how Cloudability and Turbonomic will fully work together. There is current overlap in areas such as workload optimization.
  • Automated commitment management: Acquired from Cloudwiry, IBM's automated commitment management is geared exclusively toward AWS and not yet integrated with the rest of Cloudability.
  • Optimization: IBM's CFM solution offers recommendations associated with workload optimization that do not stand out in the analysis of this market.


• Datadog - Challenger
  

  Pros:

  • Unified cloud observability: Datadog offers a seamless way for organizations to track the technical and cost performance of cloud environments by integrating cost management with its existing infrastructure and application monitoring capabilities.
  • Granular cost attribution: Datadog ingests and processes telemetry across all layers of the cloud IT stack, including infrastructure, platforms and applications. This allows tracking and allocating costs to specific applications, resources or services at any layer.
  • Real-time alerting: By correlating system data to cost data, Datadog can alert users before cost anomalies generate significant excess expenses. It does this as a standard operational activity.

  Cons:

  • Limited CFM space commitment: Datadog effectively leverages its existing product capabilities into a new cost correlation use case. While offering a range of other CFM capabilities, it is not yet a complete, general-purpose CFM tool. Awareness for the offering is growing as Datadog expands its investments in the CFM space.
  • Operational limitations: As a monitoring solution, Datadog is not fully focused on proactive administration. Its support is average in the market for workload optimization, commitment management and remediation.
  • Uneven provider support: While deep in support for AWS, Datadog has more limited support for other hyperscalers; this is the case across multiple features.


• Anodot - Visionary
  

  Pros:

  • Modern platform: Anodot provides a newer-generation CFM platform that has a modern user interface, is extensible, and includes AI (including AI-based anomaly detection), ML and chatbots. This has allowed it to respond rapidly to evolving enterprise requirements.
  • Kubernetes support: Anodot provides strong Kubernetes cost management and optimization capabilities. This is key, as many organizations are highly overprovisioning their container deployments and incurring unnecessary costs.
  • Multiple organizational support: Anodot's combination of strong cost incident detection along with showback and chargeback features enables both centralized enterprise organizations and service providers to adequately determine and notify groups under management.

  Cons:

  • Company size: Anodot's size could culminate in less support and long-term viability. As a small company, it currently lacks the revenue and resources of its larger competitors.
  • Geographic coverage: Anodot lacks the field and geographic coverage of other vendors evaluated in this research. Prospective buyers that may require more support should evaluate whether the vendor's solution will meet their organizations' needs.
  • Support symmetry: Some capabilities offered by Anodot are more geared toward AWS — most notably for workload optimization — although the solution can handle multiple cloud environments.


• CloudBolt - Visionary
  

  Pros:

  • Hybrid cloud cost management: CloudBolt includes native VMware cost management along with support for the major hyperscalers.
  • Autoremediation: Because CloudBolt has a strong history in providing cloud operations tooling, it offers orchestrated workflows to facilitate remediation of many cost optimization issues.
  • Channel partner support: CloudBolt offers extensive support for managed service provider partners wishing to deliver cloud operations and cost management services to customers using their platform.

  Cons:

  • New to the CFM market: CloudBolt has recently expanded into the CFM market and its current capabilities are not competitive for most CFM use cases. However, the vendor's vision points to strong alignment with where the CFM market is heading. Prospective customers should track how well CloudBot is able to execute on its plans, which particularly impacts prospective buyers that may require more support.
  • Oriented toward technical users: CloudBolt's current user interface reflects its primary role as an operations tool. It lacks business KPI tracking and reporting, and likely will not appeal to CFM practitioners outside the IT operations team.
  • Tagging support: CloudBolt has fewer features for detecting tagging compliance violations than most other offerings in this research. This might not appeal to enterprises that have resources in the cloud without a solid tagging strategy.


• CloudZero - Visionary
  

  Pros:

  • Unit cost metrics: CloudZero can ingest and correlate business data with cloud telemetry data. This can help customers produce unit value measures, such as cost per customer or cost per feature.
  • Big data cost optimization: CloudZero includes support for cost optimization of key cloud data platforms, including Databricks, Snowflake and MongoDB. Gartner is seeing strong adoption of these offerings.
  • Account support: CloudZero offers a designated FinOps Account Manager to each customer that can help identify savings opportunities and optimize cloud budgets.

  Cons:

  • Viability: CloudZero is a newer vendor with a developing product. Risk-averse enterprise customers should balance the advantages of this product's emerging feature set against the risks of committing to an early-stage vendor.
  • Remediation capabilities: CloudZero provides limited support for common autoremediation techniques, such as instance scheduling, autoscaling and budgets. While some enterprises prefer manual remediation, there is a certain population that wants some aspect of automated remediation.
  • Partner ecosystem: CloudZero is currently focused on direct enterprise customers and does not have a channel partner edition. This limits the number of third-party consultants that are familiar with the product.


• CoreStack - Niche Player
  

  Pros:

  • Policy-driven cost governance: CoreStack includes flexible capabilities for cost-policy definition and offers automated assessments of FinOps maturity.
  • AI-powered anomaly detection: CoreStack emphasizes the use of AI models to forecast cloud costs and detect cost anomalies more accurately.
  • Flexible integration: CoreStack APIs are rich and flexible. They include the ability to use the solution to create and manage native cost policy rules in each of the major cloud providers.

  Cons:

  • Business planning: CoreStack is a multicloud governance tool. It has little support for migration planning, integrated cost forecasting or what-if analysis, which is problematic for buyers seeking those features.
  • Cost allocation: CoreStack does not offer the ability to map and reallocate shared costs. While IaaS resources are well-tracked, PaaS costs may not be as visible in the solution.
  • Commitment management: CoreStack is oriented toward policy-based cost tracking and reporting. It does not focus on commitment management, which is a major cost mitigant for many enterprises.


• Harness - Niche Player
  

  Pros:

  • Developer support: Harness can incorporate cost management considerations early in the development process via policies integrated into the build phase. This includes supporting serverless and infrastructure-as-code (IaC) functionality.
  • Rightsize recommendations: Harness exhibits the ability to make recommendations to rightsize both compute and container instances. This allows the optimization of traditional and cloud-native workloads.
  • Integrations: Harness offers full integrations with bidirectional data synchronization with several collaboration platforms (e.g., Slack, Teams, Jira), instead of the more common simple hand-off with a webhook.

  Cons:

  • Market traction: Harness is relatively new to the CFM market, with low name recognition. Prospective buyers should take the time to assess the vendor's functionality and long-term strategy and roadmap, ensuring that they align with their business goals.
  • Limited on-premises capabilities: Most of Harness' optimization and governance capabilities are available for the leading public cloud and Kubernetes environments, with limited functionality for on-premises resources.
  • Primarily AWS support: Harness' solution, while strong with AWS, has gaps in its capabilities across other cloud vendors, particularly in the optimization area.


• NetApp - Niche Player
  

  Pros:

  • Fleet management: Spot Elastigroup has a unique offering that helps users build, manage and consume fleets of low-cost spot (also known as preemptible) compute instances.
  • Container cost optimization: Spot Ocean provides cost optimization for container clusters, automatically scaling and rightsizing capacity using a combination of spot, reserved and on-demand compute resources, while maintaining workload performance and quality of service.
  • Enterprise presence: NetApp storage products are popular among more than 30,000 enterprise customers, and NetApp-based storage services are offered by most leading public cloud providers. Some NetApp customers may prefer to adopt Spot rather than build a relationship with a new CFM vendor.

  Cons:

  • Uneven CFM feature set: Spot offers only basic support for many critical CFM features, such as financial planning and broader workload optimization, although it is strong on Kubernetes, spot instance, and AWS and commitment management.
  • Fragmented UX: Despite being unified under the same brand, the Spot offerings are still partially integrated. Reporting capabilities are split across several different user interfaces, while APIs are OpenAPI-compliant, but not unified. NetApp continues to converge its Spot portfolio into a seamless and unified platform.
  • Product strategy: NetApp is in the early stages of integrating its CFM products into a cohesive market vision and feature suite, and articulating its corresponding roadmap. Prospective customers will need to observe NetApp's ongoing execution in these areas.


• ServiceNow - Niche Player
  

  Pros:

  • Platform linkage: ServiceNow is a prominent platform in many organizations, providing multiple functionality. Combining this solution with CFM capabilities could be a key enabler for many enterprises because it allows advanced remediation workflows.
  • Budgeting and forecasting granularity: ServiceNow gives customers the ability to automate budget and forecasting at the project and portfolio levels. This will benefit large enterprises with complex organizational and/or project structures.
  • Migration assistance: ServiceNow's Cloud Cost Simulator provides cost guidance to enterprises looking to migrate on-premises workloads to the cloud.

  Cons:

  • Roadmap: ServiceNow's planned improvements to its CFM offering do not meet emerging requirements (e.g., managing and optimizing serverless, data and analytics workloads; AI infrastructure; links to application performance monitoring, etc.) as well as other vendors evaluated in this research do.
  • Value as a stand-alone entity: ServiceNow's performance in all the use cases prevents it from competing as a stand-alone offering (i.e., lack of suitability for enterprises not using the vendor's ITSM offering).
  • Implementation: Gartner clients have mentioned in inquiries the difficulty and length of time they experienced with deployments of ServiceNow's CFM solution.

Reference

• Gartner, Magic Quadrant for Cloud Financial Management Tools, 15-Oct-2024, ID G00807006

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