Dive Brief:
- Controlling costs overtook security as the primary cloud management concern for the first time in over a decade, Flexera found in its State of Cloud report, published Wednesday.
- More than 4 in 5 respondents — 82% — said managing cloud spend was their top cloud challenge, edging out security and lack of cloud expertise, at 79% and 78% respectively. The software company surveyed 750 cloud decision-makers in late 2022.
- “Companies are putting more workloads in the public cloud and becoming confident in the security controls,” said Brian Adler, senior director of cloud market strategy at Flexera. “Security is still a concern — and it should be — but companies are comfortable with security in the cloud and are now concerned about cost.”
Dive Insight:
Once workloads have shifted safely to the cloud, risk perception declines. It’s a classic virtuous circle, leading the way to increasing cloud consumption and spending.
Nearly half of respondents said current economic realities would have little impact on enterprise cloud spend or usage, the report said. Only 9% anticipate spending reductions.
Yet, pressure to monitor and control costs is growing.
In the initial scramble to get into the cloud, savings could take a back seat. Now that the first few checks have been cut, companies are learning.
“You skin your knees a few times, and you bump into a few walls in the dark until you find the light switch, and then you start to understand what’s really going on,” Adler said.
More than one-quarter of respondents admitted to wasted cloud spend and roughly two-thirds to not taking advantage of built-in provider discounts, such as reserved instances, savings plans and committed use discounts.
Cloud service providers have made these savings opportunities easy to access, according to Adler.
“When reserved instances first came out, we used to joke that you needed a PhD in economics and an Ouija board to understand how they worked,” said Adler. “You don’t have to understand complex financial modeling and be able to predict the future to use savings plans now."
With the three biggest CSPs pledging to help customers cut cloud cost, the enterprise focus is on optimization. Nearly three-quarters of respondents said their companies have stood up FinOps teams dedicated to rationalizing cost through better internal controls and governance.
While hybrid cloud remained the norm, multicloud deployments declined two percentage points year over year, a potential indication of a trend toward consolidation, according to Adler. Single cloud usage saw a parallel uptick, to 11% from 9% the prior year.
“Consolidating on a single public cloud reduces the need to have skills in multiple areas,” Adler said.
Lack of cloud security and containerization talent were two additional concerts that ranked high among respondents, according to Adler. Four in 5 enterprises struggled to source cloud expertise, which made talent the second greatest challenge for large organizations. Fewer than half of SMBs ranked skills as a top concern.
