Flexera 2020 State of the Cloud Report Reveals Major Increase in Cloud Spending Due to COVID-19

Flexera has released its 2020 State of the Cloud Report, which provides insights into use of the cloud by enterprises and SMBs, the cloud strategies being adopted by leading companies, and cloud spending trends.

The report draws on the views of 750 technical professionals from a wide range of industry sectors who provided their insights on the current state of the cloud and how they have transformed their businesses through the adoption of public, private, and multicloud infrastructure.

“The State of the Cloud survey captures insights into how organizations are progressing in their journey to cloud,” said Jim Ryan, President and CEO of Flexera. “That journey is even more important for businesses today as we face the unprecedented operational impacts of the COVID-19 pandemic.

The COVID-19 pandemic has forced businesses to increase spending on the cloud to accommodate an increased number of home workers. More than half of surveyed companies said their cloud usage had increased as a result of the COVID-19 pandemic, with many companies confirming they have had to accelerate their digital transformation plans due to the pandemic. Even though many companies have already exceeded their cloud budgets for 2020, a large percentage are still considering migrating even more services to the cloud this year. In 2020, on average, organizations are 23% over budget on their cloud spend and they are expecting cloud spending to increase by a further 47% next year.

57% of enterprises and SMBs said their 2020 cloud use is slightly more or significantly higher than they planned. That means it is now more important than ever for them to optimize their workloads and ensure there is effective cost management and governance. While organizations are aware of the importance of operational efficiency, they are struggling to control cost and eliminate waste. On average, respondents believe 30% of their cloud spend is being wasted. With so much wastage, it is not surprising that cloud optimization is the top initiative this year. 73% of organizations said cloud optimization to eliminate waste is their top cloud priority for 2020.

The vast majority of enterprises (93%) have adopted a multicloud strategy, with 87% using a hybrid cloud strategy. On average, enterprises are using 2.2 public clouds and 2.2 private clouds. More than half of all enterprise workloads are expected to be in the cloud in the next 12 months and 20% of enterprises are now spending more than $12 million each year on the public cloud. 73% of enterprises have created a cloud center of excellence (CCoE) or central cloud team, with 57% of cloud teams responsible for governing IaaS/ PaaS usage costs.

The main cloud challenges were cloud security (83%), cloud cost management (82%), and governance (79%). Understanding the cost implications of software licenses was a major challenge for software in the cloud, and companies that have just started their cloud journeys report that they have struggled with a lack of resources and expertise. Organizations that have more experience of the cloud say managing cloud spending is one of the biggest challenges.

Author: Richard Anderson

Richard Anderson is the Editor-in-Chief of NetSec.news