How is cloud spending 💳 increasing, and what % of billions in cloud spend might be going to waste? Let's look at a snapshot from the 2024 State of the Cloud Report by Flexera.
The recently released report draws from insights of 753 tech professionals and executives deeply involved in cloud decisions, including cloud marketplaces and SaaS. 85% of them are in tech/operations , with 71% from companies that heavily use public cloud.
📊 21% Increase YoY in Companies Spending >$1M/month on Cloud
59% of companies now use multiple public clouds - showing growing sophistication of cloud strategies.
The big spenders on the public cloud aren't just a few.
36% of enterprises spent >$12M/year (>$1M/month), up from 29% last year.
Across all organizations (incl. SMBs), 29% of companies spend >$12M/year on public cloud, up from 24%.
Adoption and reliance on cloud is deepening.
A significant 26% of enterprises are also spending >$12M/year on SaaS. This indicates a robust ecosystem where both infrastructure and software thrive in tandem.
When companies were also asked how they buy non-SaaS (cloud and on-prem) software, 📍 28% of such purchases involved cloud marketplaces.
📈 Cloud Migration Re-accelerated from 44% to 58% YoY
The research captured the increasing momentum of migrating more workloads to the cloud. Migration is now 2nd most important initiative for 58% YoY (up from 44%), just after optimizing existing cloud use.
Heavy cloud users now 71% of respondents, up from 65% in 2023. Companies also reported 15% higher actual public cloud spend vs. original budget.
Businesses continue to lean more heavily on the cloud, with 31% expected to increase cloud spend in the next year.
💰 Cloud Spend Management
Companies are becoming more sophisticated and centralized in cloud spend management.
70% of enterprises and 29% of SMBs now have cloud centers of excellence (+15% are planning to create one).
51% of companies now also have a FinOps team (+20% planning to add one).
For the second year in a row, managing cloud spend topped security as the top challenge. 84% of organizations highlighted this challenge.
💲👨🏻💼 Cloud Spend Efficiency
There's a consensus that cloud spend can be use more efficiently. While significant, wasted cloud spend is slowly trending down.
Self-reported public cloud waste decreased to 27% from 28% in 2023.
Software spend on the cloud is more efficient, with the reported waste here at 24%.
Among the reasons behind ongoing improvement is the rise of FinOps and cloud marketplaces, where customers can use their spend to buy 3rd party software.
The insights from the report reflect the re-acceleration of cloud adoption and the potential for companies to leverage cloud marketplaces to further improve their cloud spend efficiency.
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