Cloud trends 2023: Cost management surpasses security as top priority

As cloud use has grown over the past decade, one trend among cloud users has remained consistent: security remained the top challenge for users. That approach is changing.

For the first time since Flexera began its annual survey of cloud decision makers, security was not the top challenge reported by respondents. As revealed in the Flexera State of the Cloud 2023 Report, released on March 8, 2023, 82% of respondents from all organizations indicated that their top cloud challenge is managing cloud spend, exceeding safety by 79%.

These changing challenges may be the result of organizations becoming more comfortable with cloud security, while needing to manage the increased expense associated with their increased reliance on cloud services. 78% of respondents reported that a lack of resources or expertise was one of the top cloud challenges, making it the third top cloud challenge for businesses today.

With nearly half (45%) of respondents indicating that their expected cloud usage and spending is slightly or significantly higher than planned due to economic uncertainty, the focus on cloud cost management may not be a surprise. Today’s economic volatility means that while cloud adoption and spending remain strong, businesses are becoming more aware of the associated expenses.

However, organizations continue to look for innovative programs and increased revenue. How does this affect your dependency on the cloud? This year’s report, Flexera’s 12th annual exploration of cloud user experiences and insights (public, private and multicloud), is based on responses from 750 IT professionals and executive leaders around the world. , which represent a broad cross-section of industries and use cases. , to illustrate the trends in cloud usage experiences today.

Here’s a look at some of the top cloud trends of 2023, revealing how cost-conscious organizations can help strengthen their digital transformation initiatives.

Confidence in the cloud continues to grow

As cloud adoption becomes more widespread, more than half of all workloads and data are now in the public cloud. Nearly two-thirds (65%) of respondents say their company’s level of public cloud usage is high, up from 63% in the 2022 report. Just over one in 10 (11%) report usage of a single public cloud. The majority of respondents (86%) use multiclouds (composed of 12% using multiple public clouds and 72% using a hybrid cloud). This reliance on multicloud reflects a small decrease from last year’s findings.

Among respondents using multiclouds, the top two multicloud deployments are isolated applications across different clouds (reported by 44%) and disaster recovery (DR) or failover between clouds (reported by 42%). Across organizations, the most widely used multicloud tools are security tools (reported by 30%), closely followed by cost optimization (finops) tools (29%). Among businesses (organizations with 1,000 or more employees), confidence in these tools increases significantly, with 68% using cost optimization tools and 63% using security tools.

Public cloud spending exceeds $12 million per year for roughly a quarter (24%) of respondents. Nearly one in five (18%) of respondents reported that their current cloud spending exceeds their original budget. Cloud spending is also anticipated to continue to grow, with 30% of respondents expecting cloud spending to increase in the next 12 months.

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The battle for cloud dominance continues

Amazon Web Services (AWS) and Microsoft Azure continue to lead the pack of cloud providers. They have maintained close competition as market leaders while extending their lead over other competitors.

In the 2022 report, Azure surpassed AWS in adoption rates. In 2023, AWS is in the lead again: 46% of enterprise respondents run significant workloads on AWS, while 41% run significant workloads on Azure. The adoption of public cloud providers, based on each organization’s level of cloud usage, indicates that as organizations mature, they gravitate toward market leaders. AWS continues to be used more frequently by organizations that have been using the cloud for a longer period of time and are heavy cloud users.

When it comes to the public cloud providers experiencing the most expected growth, as measured by the number of respondents currently experimenting with or planning to use it, Google Cloud Platform and Oracle Cloud Infrastructure are tied at 28% each.

Controlling cloud costs remains a challenge

Estimated wasted cloud spend is 28%, down slightly from 32% as reported in 2022. But the need to optimize costs and minimize waste continues. Migrating workloads to the public cloud continues to present challenges that can ultimately increase costs.

Top cloud migration challenges include understanding application dependencies (reported by 49%), assessing technical feasibility (reported by 46%), and right-sizing or selecting the best instance (reported by 42%) . Post-migration challenges such as application management and cost optimization also indicate the importance of understanding all stages of the migration process to better optimize cloud costs.

Cloud cost management responsibilities are often distributed among teams within an organization. Year after year, vendor management and finance or accounting teams have less responsibility for cloud spend. Instead, initiatives are shifting towards finop teams.

Finops, the cloud cost management practice, is a growing priority. Nearly three-quarters of respondents (72%) have a dedicated finop team, while an additional 14% are planning one in the next twelve months.

Areas for improvement in cloud cost optimization include discounts for providers, which are currently not used by approximately two-thirds of respondents. Unit economics, a key metric used in finops to measure the efficiency of cloud spending, can be difficult to implement, but 39% of organizations have already implemented a unit economics model for cloud cost analysis. cloud. This number is likely to increase in the coming years.

Brian Adler is a senior director of cloud market strategy at Fold. He was previously a senior analyst director at Gartner.

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