Cloud spend exceeds budgets as organizations expect increased cloud use due to COVID-19, according to a Flexera report.
“With employees working from home and more business interactions going digital,” said Jim Ryan, President and CEO of Flexera, “more than half of enterprise respondents said their cloud usage will be higher than originally planned at the beginning of the year due to the pandemic.
“Companies plan to migrate more services to cloud, yet they’re already exceeding cloud budgets. They will need to focus on optimizing workloads as they migrate in addition to cost management and governance to ensure operational efficiency.”
Organizations embrace multi-cloud
- 93% of enterprises have a multi-cloud strategy; 87% have a hybrid cloud strategy
- Respondents use an average of 2.2 public clouds and 2.2 private clouds.
Public cloud adoption continues to accelerate
- Twenty percent of enterprises spend more than $12 million per year on public cloud
- More than 50 percent of enterprise workloads and data are expected to be in a public cloud within 12 months
- 59% of enterprises expect cloud usage to exceed prior plans due to COVID-19
- The top challenge in cloud migration is understanding application dependencies.
Cloud cost optimization
- Organizations are over budget for cloud spend by an average of 23 percent, and expect cloud spend to increase by 47 percent next year
- Respondents estimate that 30 percent of cloud spend is wasted.
Cloud initiatives and metrics
- 73% of organizations plan to optimize existing use of cloud (cost savings), making it the top initiative for the fourth year in a row
- 61% percent of organizations plan to focus on cloud migration
- 77% of organizations use cost efficiency and savings to measure cloud progress.
Organizational approach to cloud
- 73% of enterprises have a central cloud team or cloud center of excellence
- 57% of cloud teams are responsible for governing infrastructure-as-a-service (IaaS)/platform-as-a-service (PaaS) usage costs.
- 83% of enterprises indicate that security is a challenge, followed by 82 percent for managing cloud spend and 79 percent for governance
- For cloud beginners, lack of resources/expertise is the top challenge; for advanced cloud users, managing cloud spend is the top challenge
- 56% of organizations report that understanding cost implications of software licenses is a challenge for software in the cloud.