A global survey of 759 technical professionals and executive leaders conducted by Flexera finds more than half of all workloads, including software-as-a-service (SaaS) applications, are now running in a public cloud. However, 21% of cloud workloads have also recently been repatriated to some type of on-premises IT environment, the survey finds.
The primary reason for making that shift is typically cost, with 84% identifying managing cloud spend as their biggest challenge. On average, cloud budgets are exceeded by 17% and organizations are looking to recapture 27% of their current cloud spend, the survey finds. A full 87% said cost efficiency/savings is the number one metric used for assessing progress against IT goals. Additionally, the survey finds cost avoidance (64%) is a major concern, up from 28% a year ago.
Despite those concerns, however, the total number of workloads being deployed in the cloud continues to increase. The survey, on average, finds respondents expect their organization to increase cloud spend by 28% in 2025. A third (33%) of respondents noted their organizations are already spending more than $12 million annually on public cloud services.
Jay Litkey, senior vice president of Cloud and FinOps at Flexera, said that as cloud spending continues to increase, it’s clear organizations are increasingly sensitive to those costs. In fact, the survey finds a full 59% of respondents have embraced FinOps as a methodology to better control cloud costs. Less clear is how many organizations are relying on a center of excellence to implement those best practices versus driving them deeper into existing IT management workflows.
Of course, a significant portion of the increased spending on cloud services is being driven by the rise of artificial intelligence (AI) applications that require access to expensive graphical processor units (GPUs), noted Litkey. Those workloads, in turn, are driving increased awareness of the need to apply best FinOps practices to AI, added.
However, even accounting for AI, the total number of workloads being deployed in the clouds continues to rapidly expand, noted Litkey.
As a result, there is more reliance on external expertise to deploy and manage cloud applications. The survey also finds 60% of respondents are also relying on managed service providers (MSPs) to manage some (29%) or most (31%) of their public clouds, with 18% reporting they expect to increase their reliance on MSPs.
Finally, the report finds well over half of respondents (57%) also have or plan to have a defined sustainability initiative in place in 2025, including carbon footprint tracking of cloud usage.
Ultimately, each IT organization will need to find some way to rein cloud spending. Unfortunately, there’s also a long-standing tendency to over provision IT infrastructure to ensure application availability, which may soon become a luxury that more organizations may simply not be able to afford. Hopefully, there will also soon come a day when IT teams are also provided with AI tools that automatically right size IT environments based on the amount of budget dollars actually allocated
In the meantime, IT leaders in the short term may need to focus on getting more out of their existing cloud infrastructure resources using, for example, spot and reserved pricing options, before provisioning any additional cloud infrastructure resources.
