By Most organizations treating cloud cost as a data problem are solving the wrong problem. Consumption dashboards and commercial negotiations address only the first stage of cloud financial maturity. The second stage, improving efficiency at the application layer, is where most finance and engineering teams have no tooling and no clear definition of success.
Technical Deep Dive
In this interview on TFiR, Peter Maloney, CFO and COO at Azul, walks through the two-stage FinOps adoption model, where cloud spend actually lands on a P and L, and why CFOs need to reframe cloud investment around outcomes rather than cost reduction alone.
Guest: Peter Maloney, CFO and COO at Azul
Show: TFiR
Here is what every CFO, FinOps practitioner, and platform engineering leader needs to know.
Q: Where does cloud spend actually go on a company’s P and L?
Peter Maloney, CFO and COO at Azul, identifies two primary destinations for cloud spend on a P and L: cost of goods sold, which covers supplying the product or service to customers, and engineering and R and D cycles. Understanding this split is the foundation for any meaningful cloud cost strategy because it ties spend directly to business function rather than treating cloud as a single undifferentiated line item.
“When you look at a P and L view of where cloud spend is going, it’s going into two areas primarily. One is your cost of goods sold to go supply your product or your service to your customer. And number two, in your development cycles, in engineering and R and D.” — Peter Maloney, CFO and COO, Azul
Q: What are the two stages of FinOps adoption and what does each one address?
Maloney frames FinOps adoption as a two-stage progression. Stage one covers identification, consumption management, and commercial optimization, including the tooling provided by major cloud providers and third-party software vendors. Stage two moves beyond tracking spend to improving efficiency at the application layer, which is where Azul operates. Most organizations are still in stage one, which means they are managing what they spend but not improving what they get for it.
“I look at the adoption of FinOps in two stages. Identification, working on consumption and commercials. And then secondly actually working on the efficiency at the application layer.” — Peter Maloney, CFO and COO, Azul
Q: Why does having more cloud cost data not solve the ROI visibility problem for CFOs?
Maloney is direct that the core issue is not a data shortage. Significant volumes of cloud cost data are already available to finance and engineering teams. The gap is in connecting that data to outputs rather than stopping at consumption metrics. Without a clear definition of what success looks like for a given cloud investment, whether the goal is product delivery, customer-related activity, or something else, the data cannot be used to optimize ROI.
“It’s not really a data issue. There’s a lot of data that’s available. I think the gap is taking that data and applying it not just to consumption, but to outputs.” — Peter Maloney, CFO and COO, Azul
Q: How should CFOs reframe cloud investment to drive better outcomes?
Maloney argues that cloud investment decisions should start with a clear definition of success tied to the specific business purpose of the spend. CFOs should ask whether a given investment is going toward product development, customer-related activities, or another defined goal, and use that framing to evaluate performance. The shift is from cost management as the primary lens to ROI and outcome optimization as the organizing principle.
“From a CFO’s perspective, it’s not just about cost management, it’s optimizing ROI or optimizing outcomes.” — Peter Maloney, CFO and COO, Azul
Q: Where does Azul fit within the cloud cost optimization stack?
Azul operates at the application layer, which Maloney positions as the domain of FinOps stage two. While stage one tools from cloud providers and third-party vendors address consumption tracking and commercial negotiation, Azul works to improve application performance directly, which translates into better efficiency from the compute already being purchased. This distinction matters because stage one tools cannot drive stage two outcomes.
“That’s one of the things that Azul does for our customers. Stage two is more the tools that will help you at the application layer and actually help performance improve.” — Peter Maloney, CFO and COO, Azul
Resources and Documentation
- Azul, Java runtime and application-layer performance optimization for cloud environments
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Swapnil Bhartiya: What is their cloud actually being used for? Because most of the time you have all these resources, of course, all the major deals, all the contracts, but where is it being used? So do they also look at input, output and the whole consumption model as well?
Peter Maloney: When you look at a P and L view of where cloud spend is going, it’s going into two areas primarily. One is your cost of goods sold to go supply your product or your service to your customer. And number two, in your development cycles, right. In engineering and R and D. And so there’s a lot of tools out there and a lot of data to measure the activity and to help you manage. And there’s actually tools with the big cloud providers as well as individual software companies that will help you to manage consumption and automate things. There’s also tools out there to help you with the commercial side of things. What’s been happening now is the adoption of those tools. Stage two is more the tools that will help you at the application layer and actually help performance improve. Right. That’s one of the things that Azul does for our customers. And so I look at the adoption of FinOps in two stages. Identification, working on consumption and commercials. And then secondly actually working on the efficiency at the application layer.
Swapnil Bhartiya: Since you talked about tools, I would love to talk a bit about that. Because cloud pricing complexity and lack of visibility, you need to be a mathematician to actually do all the calculation to figure out how much it’s going to cost. They would also cite it as the biggest barrier to cost optimization in the report as well. Talk a bit about what kind of insights do CFOs and finance leaders actually need, but often don’t have when it comes to cloud usage? And what if Azul is doing anything to actually help them?
Peter Maloney: So Azul definitely helps and like I said, Azul helps at the application layer. I think it’s not really a data issue. There’s a lot of data that’s available. I think the gap is taking that data and as I mentioned, applying it not just to consumption, but to outputs. Right. You think about, from a CFO’s perspective, it’s not just about cost management, it’s optimizing ROI or optimizing outcomes. So as you’re investing in the cloud, having a clear definition of success, what are you investing in? Are you investing in product? Are you investing in customer related activities? And knowing what a true success looks like helps you use the data that you have to achieve that success.
