Costs, not security, worry enterprise leaders most as cloud estates multiply

Dive Brief:

Enterprise cloud customers remain committed to a hybrid cloud strategy, leaning heavily on the three largest public cloud providers, according to Flexera’s 13th annual State of the Cloud Report. The software company surveyed 753 IT professionals and executive leaders in the Tuesday report.
Organizations were intentional about where to run various workloads, Flexera found. Nearly 3 in 5 respondents reported using multiple clouds, a three percentage point increase year over year. And data integration between clouds became a more common practice, growing to 45% of respondents, a seven-percentage point increase over last year’s survey.
The trend reflects a hybrid-cloud “steady state” in enterprise ecosystems, with nearly all respondents deployed in public cloud, roughly three-quarters using private cloud and the majority leveraging both.

Dive Insight:

Enterprise cost scrutiny tends to follow fast on the heels of spending spikes.

In cloud, a migration boom coupled with economic uncertainty drove organizations to clear a path to optimization through a tangle of thorny billing practices and overgrown systems.

“This is a complex year for cloud adoption,” Brian Adler, senior director of cloud market strategy at Flexera, said in the report. “Organizations are navigating economic uncertainties by investing in generative AI, security and sustainability while prioritizing cost management.”

In a repeat of last year’s survey, controlling spend surpassed cybersecurity as the most pressing cloud challenge, cited by 84% of respondents. The shift to prioritize cost over security, which 81% of respondents nonetheless cited as a major concern, reflects the ongoing maturation of cloud strategy, Adler told CIO Dive.

“We’re seeing more and more workloads and more and more data going to cloud, so one of the priorities should be to manage spend,” Adler said.

At the same time, companies have seen their counterparts in some of the most highly regulated, security-conscious industries move to the cloud, including banks and medical institutes, Adler pointed out.

“If Capital One is 100% in cloud then a company that makes widgets is going to feel more comfortable doing that,” Adler said.

That comfort level was reflected in spending growth.

More than 1 in 4 organizations spent $12 million annually on cloud and nearly one-quarter spent that much on cloud-based SaaS, according to the report, which tracked a 21% year-over-year increase in organizations spending $1 million or more per month on the technology.

SaaS and platform services saw across-the-board usage gains, with cloud data warehouse experiencing the sharpest spike. Nearly two-thirds of respondents said their organization stored data in cloud, up nine percentage points year over year.