1. About the First CCoE Summit 2023
On July 20, 2023, the CCoE Summit hosted by Google Cloud was held, and I had the opportunity to participate as one of the organizing members. It was a valuable chance to communicate directly with CCoE leaders from domestic companies. Moreover, the number of attendees and participants was significantly higher than initially expected, highlighting the growing interest in CCoE among all organizing members.
CCoE (Cloud Center of Excellence), the topic of this time, refers to organizations and initiatives aimed at maximizing the use of cloud technology by companies. Recently in Japan's business scene, the term CCoE is being heard more frequently. Indeed, the number of applications and participants in this CCoE Summit clearly shows the growing interest and attention towards CCoE. This increase is attributed to the acceleration of digital transformation in companies and the widespread adoption of cloud technology. Also, the adoption and utilization of cloud technology as a strategy for sustained corporate growth are considered contributing factors.
2. Agenda and Overview of the CCoE Summit
At the CCoE Summit, diverse sessions were held on the practice of CCoE, its success factors, and the latest trends in cloud technology. Particularly, case studies on organizational transformation using the cloud and the importance of communities to support CCoE activities garnered attention.
There were lively discussions on successful cloud adoption cases in major companies and on the new organizational structures and roles of CCoE, emphasizing knowledge sharing and expert networking in a community-like manner, rather than being just an internal “handyman”. This approach seemed to converge into a common practice for consolidating knowledge and experience from experts in various fields, to foster the organization-wide use of the cloud.
There were discussions led by Mr. Aoyagi of Accenture Co., Ltd. on the approach of CCoE using the Hojo accounting method, debates from both the perspective of those initiating CCoE within their companies and those supporting the launch of CCoE. For participants who are likely to lead CCoE in the future, it was a very meaningful time.
*For a detailed agenda and content of each session, please refer to the official website.
3. The Relevance of Our Work in FinOps to CCoE Initiatives
Both CCoE and FinOps, which we at Alphas work on, aim for the optimization of business using cloud technology. While CCoE centers on the role and efforts of organizations promoting the introduction and utilization of cloud technology, FinOps focuses on cloud cost management and optimization. Below are the definitions of each term.
CCoE is a company-wide, cross-functional organization established in companies to promote the use of cloud in information systems, accumulating necessary personnel, resources, and knowledge to facilitate cloud usage across various departments.
FinOps (Cloud FinOps) is not just about one-off cost optimization or cost reduction actions. Like DevOps, one of the origins of the term, it’s a concept related to discipline and culture involving various internal stakeholders related to cloud expenditure (investment) to continuously improve business value.
Due to the increase in inquiries and exchanges of opinions related to cost optimization, our customers have been more involved in discussions with those supporting cost management, visualization, and optimization from a CCoE perspective.
Given this background, as Alphas, we have a significant interest in the initiatives of CCoE. Especially considering the current heightened interest in cloud costs and their relation to FinOps, we believe CCoE initiatives will become an indispensable part of Alphas' business in the future. In this market environment, the insights gained from the CCoE Summit will continue to serve as a guide for supporting various companies' CCoE as enablers of Finops.
4. Learnings from the CCoE Summit (Focusing on Cloud Costs)
As mentioned above, we believe CCoE and our work in FinOps share the common goal of cloud optimization. Thus, the sessions and discussions at the CCoE Summit were extremely valuable in providing specific ideas and insights into how we can incorporate CCoE concepts and methods into our services and efforts.
For example, offering dashboards that provide cost visibility tailored to various stakeholders within a company, or cloud phase-aligned cost optimization recommendations. I felt that solutions for managing and optimizing the constantly changing costs of the cloud are necessary as a CCoE. Increasing efficiency and automation in operations, and making the most of the valuable time of CCoE members will be crucial for advancing cloud adoption in the long term.
This was inspired by the keynote speech by Mr. Moriya of NTT DoCoMo, which mentioned that the role of CCoE has shifted from a position of "support" to "leading" stakeholders. Listening to the needs of stakeholders, both internal and external, and driving cloud optimization as a CCoE will provide great value in aligning cloud cost optimization to the needs and situations of each stakeholder is crucial.
At the CCoE Summit, there was also a keynote speech by Mr. Kamagata of Ul Systems, Inc., discussing the importance of cloud cost optimization. Issues such as shadow IT and unexpected expenses associated with cloud migration were highlighted. Having mechanisms for detecting and monitoring unforeseen costs that arise at various phases of cloud adoption can enable companies to carry out cloud migration more confidently.
While these are just a few ideas, hearing about the actual initiatives of the CCoE leaders who delivered keynote speeches at the CCoE Summit was very enlightening. We hope to continue participating in and discussing at such events actively in the future.
5. What FinOps Expects from CCoE
As mentioned at the CCoE Summit, it's becoming increasingly important to nurture and acquire cloud talent and maximize their capabilities. The concept of CCoE, based on the premise of multi-cloud, is not yet a concrete topic in Japan, but discussions on multi-cloud-based CCoE are already actively underway in the United States.
As mentioned earlier, there is a deep connection between CCoE and FinOps, with a common goal of cloud optimization. From a FinOps perspective, CCoE is expected to maximize cloud cost efficiency and business value. As a center where cloud technology experts gather, CCoE should support the formulation and execution of an organization-wide cloud strategy. In FinOps principles, transparency in cloud costs, optimization, and budget management are highlighted. To realize these principles, CCoE needs to facilitate continuous communication and cooperation, providing optimal practices and tools for cloud usage.
For example, as mentioned on the FinOps official site, the concept of cloud unit economics is an important metric in driving the cloud and is a common understanding for those promoting the cloud, such as CCoE.
Definition of Cloud Unit Economics:
Cloud unit economics is a concept for making effective economic decisions and decisions when deploying a business using cloud computing. Specifically, it involves analyzing the costs of cloud resources (servers, storage, networking, etc.) per unit and the business performance (profit, etc.) to achieve an optimal balance of cost and performance.
By understanding cloud unit economics, it's possible to establish an evaluation axis combining business and cloud optimization, creating a common metric for cloud optimization, the shared goal of FinOps and CCoE. By linking business metrics (sales, profit margins, etc.) with cloud cost metrics as one of CCoE's KPIs, businesses can evaluate cloud optimization from a FinOps perspective.
Many companies abroad have already adopted such initiatives, establishing mechanisms to realize the maximum business value from cloud adoption, a common goal of FinOps and CCoE.
*As an aside, Alphaus' representative, Hajime Hirose, participated in FinOps X 2023, an event where the latest trends in FinOps were announced. He has compiled an experience report, which you can read here.
The Google Cloud-hosted CCoE Summit 2023 was an excellent opportunity to learn about the latest information and trends in cloud technology utilization and cost management optimization. As Alphas, participating in such events allows us to gain new ideas and insights to improve the quality of services we offer to our customers. We expect the initiatives of CCoE to deepen further in the future. Especially considering the evolution of cloud technology and changes in the business environment, advancing these efforts organization-wide will be key to business success. We intend to continue participating actively in such events, keeping abreast of the latest information and trends to provide our customers with optimal services.