Managing financial uncertainty is a significant challenge, even during the best of times. Today, two major factors drive the need for continuous cloud cost optimization — the evolving global financial conditions in response to the COVID-19 pandemic and the accelerating adoption of cloud usage.
As identified in the Flexera 2020 State of the Cloud Report, organizations expect cloud spend to increase 47% in the coming year. This rapidly growing spend leads to challenges in forecasting, with respondents reporting they exceeded their cloud budget by an average of 23%.
As cloud spend is growing, respondents are finding it difficult to ensure that cloud costs are optimized. Respondents estimated that nearly a third (30%) of cloud spend is wasted. As a result, 73% of respondents identified the need to optimize their existing use of cloud as a top cloud initiative for 2020.
Due to COVID-19, cloud use is accelerating, with more than half of organizations expecting cloud usage to exceed prior plans. Other organizations will see their cloud use decrease as their businesses are impacted by the pandemic. In either scenario, it becomes imperative for organizations to optimize cloud costs.
On-demand cloud spend — unlike many other IT costs that are set in long-term contracts — can provide nearly instantaneous savings once idle resources are eliminated or overprovisioned resources are downsized. A focused plan for cloud cost optimization can yield significant benefits — often 20% to 25% savings in just a few months — and prepare your organization to manage cloud costs efficiently as cloud usage speeds up or slows down.