Cloud investment remains strong despite economic uncertainty: Flexera cloud report 2023

IaaS Management

Cloud investment remains strong despite economic uncertainty: Flexera cloud report 2023

Flexera has just released its twelfth annual Flexera 2023 State of the Cloud Report. The report is based on a survey of 750 cloud decision-makers from around the world and aims to reveal experiences and insights about the public, private and multi-cloud market.

Economic uncertainty is clearly the context for this year’s report, but the upbeat nature of the responses will provide some reassuring reading. Despite the very different context this year, particularly a war in Europe and the associated uncertainty and sanctions that go along with it, 90% of respondents have no plans to reduce their cloud spending. In fact, 45% intend to spend more on cloud than they had previously planned.

“This is a watershed year for cloud usage, as the report findings demonstrate,” said Brian Adler, Senior Director, Cloud Market Strategy at Flexera. “We saw FinOps continue to gain traction, cost management challenges pass security as the top cloud challenge for the first time, and artificial intelligence (AI) lead all plans and experimentation of public cloud services. As economic uncertainties wane in the months or years to come, companies will continue to lean into the cloud to transform their businesses, with the goal of finding competitive advantages.”

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Here are some of the other findings that stood out to us:

FinOps gains traction as 39% overspend on cloud budget

Managing cloud spend overtakes security as the top cloud challenge for the first time. As in previous years, a lack of resources/expertise also continues to be a significant challenge for organisations. The need to get a handle on cloud spend is not going unnoticed, with 72% of organisations now reporting having a dedicated FinOps team.

Respondents indicated a 39% increase year-on-year in the amount of cloud spend over budget, while roughly two-thirds of organisations admit to not taking advantage of provider discounts to optimise cloud costs. Our question to them is why not?!

Small shift away from multi-cloud

More than half of respondents use multiple public clouds; while 16% have consolidated onto a single public cloud.

Multi-cloud use is decreasing, albeit marginally, from 89% last year to 87% this year, while hybrid cloud remains the overwhelming preference over a solely public cloud.

Azure and AWS continue to jostle for the top spot in public cloud

Last year Microsoft Azure took the cloud crown from AWS for the first time when it came to organisations running some/significant workloads on Azure, with 80% of respondents running such workloads on Azure vs. 77% on AWS.

There are no great changes this year, however AWS can sleep soundly knowing they have regained the public cloud crown for some/significant workloads, with

71% of respondents now using Azure for some/significant workloads vs. 74% the same on AWS. Both figures show a small decline however, so not a time for either to rest on their laurels.

More AI of course

Machine learning/artificial intelligence is being experimented with more than any other service, with 48% of respondents either already experimenting with machine learning/AI or are planning to do so. This is one statistic to keep an eye on in future reports.

Further reading

The full Flexera Cloud Report 2023 report is deep, far-reaching, and absolutely packed with data. It goes into significant depth in so many areas that we couldn’t possibly cover it all here. If you’re interested in delving into the full data yourself, be sure to download the full report here.

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