Apptio Drives Integration of Cloud Control and ESG

A significant transformation is underway in how enterprises approach technology investments, with organisations moving beyond simplistic cloud adoption to more sophisticated strategies balancing cost, efficiency and environmental impact. 

Technology Business Management (TBM) specialist Apptio stands at the forefront of this evolution, providing tools which combine granular cost visibility with sustainability metrics.

Speaking to FinTech Magazine from TBM conference 2024, three Appptio executives, including Mallory Beaudreau, Account Management EMEA, share insights on organisations evolving approach to cloud adoption.

Apptio: Striking the balance in cloud migration

“This year, as organisations continue their cloud migrations, cost awareness has been a key consideration. This is a step forward from previous ‘cloud first’ policies, which in reality meant dumping data into the cloud to figure out later,” Mallory explains.

This reactive approach has given way to more strategic thinking about which workloads belong in the cloud.

“Now, our banking clients are moving from awareness into accountability. Their strategy is not cloud-first, it's cloud smart,” Mallory continues. 

“They're looking at the most appropriate application to migrate to the cloud because not everything is conducive to this pay-as-you-go model.”

For many organisations today, a hybrid environment is the working reality – with some applications migrating to the cloud while other workloads remain on-premise.

Indeed, when it comes to AI, Apptio finds its banking clients see these workloads as most optimal on-prem, to “minimise big data transfers to the cloud”, says Mallory.

“If the data is on-prem, then AI applications can be built on-prem too, reducing both latency and operational costs,” she continues. 

So, while hybrid environments are beneficial, particularly for banks, they do present unique challenges. 

Greg Holmes, Area VP of Solutions at Apptio, emphasises that organisations need new approaches to measurement and optimisation. 

“When organisations go and push things into the cloud without rethinking how they're running them, not even going all the way to re-architecting or rebuilding, that’s when you see inefficiencies,” he explains.

The skills challenge compounds this complexity. “What if you're a 25-year-old engineer? You only know the cloud, and I'm asking you now to understand hybrid,” Mallory notes. “It's neither good nor bad, it's just another challenge. You need people who can code switch and translate between on-prem and cloud workloads.”

Cost visibility during migration poses another challenge. Mallory warns businesses they could be paying twice for expensive data to be stored both on-prem and in the cloud. She calls this "double bubble".

“This has happened for years, this is not a new trend, but that idea of ‘double bubble’ when you are migrating,” Mallory explains. 

“If you have a big database that you’re migrating to the cloud, while you have an open application on-prem and in cloud, you are paying for both.”

Automation drives efficiency

A key development in Apptio's approach is the increasing role of automation in cost optimisation. The company's latest Cloudability Premium package, recently recognised as a leader in both the Forrester Wave and Gartner Magic Quadrant for cloud financial management, incorporates elements of architecture, automation and orchestration.

“Our newest package will do some architecture automation for you,” Mallory notes. “If we're talking about pennies of savings per change, my engineers are too expensive to do that. However, thousands of changes saving pennies add up over time.”

Holmes emphasises the importance of systematic thinking: “It's how you systematically think about all the applications you're running, how much you need to run it and what the best way to run it is.” He cites an example where a workload running 12 times monthly could achieve the same result at one-twelfth the cost by running once.

Sustainability integration

Of course, while speed and operational efficiency are vital for organisations when onboarding automation tools among other technologies, the environmental cost of these tools – and the energy they consume – is a vital consideration. 

Ann Marie Chow, VP Global Customer Operations & Sustainability at Apptio, emphasises that sustainability metrics must be embedded within existing operational processes. “It's often very easy to leave sustainability on the side when budgets get cut, but if you embed it in your existing processes, you kill two birds with one stone,” she says.

Apptio's approach focuses on measurable metrics such as  power consumption through compute hours. “We factor our environmental costs around power because it is something you can directly measure,” Ann explains. 

“Carbon emissions themselves are only estimates – there’s not an exact science behind it. So we focus on power consumption as it ties directly into the actions taken by an organisation.” 

The company's GreenOps capabilities are already showing significant results. Global payments company Mastercard was recently recognised as a finalist in the TBM Council Awards for achievements in technology sustainability while maintaining cost control.

Greg emphasises that sustainability considerations increasingly influence technology decisions: “Some CIOs have decided that certain workloads, whilst providing business value, have such great sustainability costs that they're not feasible. 

“We're seeing considerations beyond just carbon - water resources and other sustainable resources that businesses find they could be squandering.”

The environmental aspect helps engage staff differently than pure cost savings.

“In a big bank, your engineers might not care that much about it costing the bank more money,” Greg notes, “but when you tell them this is going to save the environment by a certain amount and make your bank a protector of the environment and not a destroyer of the environment, that changes their minds.”

Regulatory compliance drives sustainability action

Just as environmental considerations are vital for cloud, automation and AI costs, they are imperative for regulatory adherence. European regulations, particularly the Corporate Sustainability Reporting Directive (CSRD), have accelerated the adoption of integrated tracking solutions. 

“In EMEA, which is highly led by legislation, there's been a lot more attention just because of CSRD,” Ann explains. “We are seeing things pick up because there was recent legislation in Australia as well as different regions.”

The regulatory landscape continues to evolve, with increasing consequences for non-compliance. 

“With Europe being one of the first to regulate sustainability, regulators are now putting out fines for inaction. It's no longer just about visibility,” Ann continues. 

“The penalties from just within IT are going to start to hit your CFO and Chief Risk Officer. That's why you should partner and get ahead of it.”

New regulations such as the Digital Operational Resilience Act (DORA) create additional requirements. “Every day right now, I'm having that conversation,” Mallory says. 

“We can give them the data that helps them make transfer pricing decisions, which is going to help with their tax burden. We're not a tax accounting software, but we are providing visibility so their accountants can make decisions.”

Data sovereignty and management

Elsewhere, the issue of data sovereignty has become increasingly critical. “Data storage costs, data warehouses and databases can all be tracked in the cloud,” Mallory explains. 

“Highly regulated organisations such as financial services and healthcare firms are all retaining data, but they're not necessarily sure what they're going to do with it, or how best to manage it.”

Recently, Apptio launched a UAE data centre in AWS for hosting Cloudability and Apptio costing planning. “People all over the world are getting much more into cloud, but they want their cloud to be controllable, visible and accessible to them and them alone,” Greg notes. “We're also hosting on Azure as well as AWS, which is a big deal too.”

The company's approach to data management reflects growing market sophistication. 

“We're bringing multiple data sets together and modeling it to get a comprehensive view of a business,” Mallory explains. “It's the same data, just presented in a different way. That's what really enables businesses to make the right decisions, optimise, turn things off if you don't need them, and invest in certain areas if they’re the big money makers.”

Future developments and market evolution

As Apptio looks to the future, one eye is firmly on the evolving convergence of financial operations and sustainability tracking. 

“I think it's really exciting to see how the GreenOps space can fold into TBM and FinOps as another area that becomes a new standard or framework,” Ann says. "There's not really a gold standard right now but finding one is definitely the next phase, it really is an evolving space.”

Automation will play an increasingly important role too. “Our customers have responded to that. I cannot tell you how many times we've been in a review with an executive and we'll say, 'Hey, you've got a potential US$1m of savings,'" Mallory reveals. 

"For any organisation, it’s important to start with your top ten cost savers, because they make up a significant portion of your unnecessary expenditures.

“But many firms will have a long tail of small but accumulatively significant costs, which, to address manually will require significant man hours. Now, what Apptio can do is look at that tail and automate the cost reduction by ceasing those unnecessary operations.”

Greg sees similar patterns emerging in AI adoption: “What we've seen with AI is that's following that same kind of model that you need a central team to manage the financial operations of that. The CTO will start to play a more important role in detailing the right AI services for the right use cases,” he adds. 

It’s clear that as organisations navigate increasingly complex technology environments, Apptio's integrated approach to cost management, sustainability and automation provides a framework for making informed decisions. 

And, with AI embedded into Apptio’s tools and services, spending patterns are being detected that previously would not have been uncovered by humans alone. 

“With AI and large language models, we're now able to use our clients’ data in ways we can't even anticipate. This is one of the beauties of AI – the model is finding patterns we can’t see, and doing so at speed – offering effective cost reduction to our customers across a wide range of sectors,” Mallory concludes.

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