Cloud Adoption Soars as Organizations Navigate Challenges

Companies are using the cloud more than ever and they're also spending more than ever before, Flexera's State of the Cloud Report reveals.

Sean Michael Kerner, Contributor

March 15, 2024

3 Min Read
businessman pointing to a cloud with a lock in it with the words "cloud adoption" above it

Flexera has released its 13th annual State of the Cloud Report, shedding light on the evolving cloud landscape and the challenges that organizations worldwide are facing.

While this is the 13th version of the report, it is the first with the Flexera name, as cloud optimization and management vendor Snow Software, which Flexera acquired on Feb. 15, conducted the previous versions.

Public cloud adoption continues to accelerate, with 29% of all respondents spending more than $12 million annually on public cloud services. This is a significant increase from the previous year's report. Additionally, nearly a quarter of respondents are spending the same amount on software-as-a-service (SaaS) solutions, highlighting the growing importance of cloud-based software in modern organizations. The report also revealed that organizations are increasingly adopting multicloud strategies, with 89% of respondents reporting the use of multiple cloud providers.

The report, based on a survey of 753 cloud decision-makers and users, highlights the following key findings:

• 89% of respondents have embraced a multicloud strategy, up from 87% last year.
• 29% of all respondents are spending more than $12 million annually on public cloud.
• 63% of organizations have a Cloud Center of Excellence (CCOE).
• 51% of organizations have a FinOps team.
• 49% of respondents use AWS for significant workloads, while 45% use Microsoft Azure.

Related:Cloud Cost Calculators: Benefits and Limitations

Adler pulled quote

"The biggest surprise we saw in this year's survey results was that AI's actual use was lower than I expected," Brian Adler, senior director of cloud market strategy at Flexera, told ITPro Today.

Forty-one percent of the respondents said they are currently using artificial intelligence/machine learning (AI/ML); however, nearly half, 49%, are experimenting and planning to use ML/AL platform-as-a-service (PaaS) services.

"While the use of AI in real-world applications turned out to be lower than anticipated, I expect a significant increase in these numbers next year," Adler said.

Cost Remains the Top Challenge for Cloud

The report identified cloud cost spending as a primary challenge for cloud management.

"For the second year in a row, managing cloud spend was the top challenge, with security coming in as No. 2," Adler said. "We used to joke that you needed a Ph.D. in economics and a Ouija board to manage reserved instances."

Cloud computing has become very complex, which impacts cloud cost management, according to Adler. He noted that across the cloud providers, there are thousands of infrastructure-as-a-service (IaaS) options and many different PaaS offerings and multiple ways to pay for them.

Related:7 Cloud Finance Metrics to Track to Better Control Cloud Costs

The pricing models may depend on allocation as well as consumption patterns, which are hard to predict, particularly when a service is being used for the first time. In addition, Adler noted that an organization has to manage cloud provider discounts, which vary from provider to provider.

In terms of how an organization can get a better handle on cost, Adler said organizations with active FinOps teams and clear goals manage costs much better. Understanding various software licenses when applications are deployed is also important.

"Companies that build software licenses into their cloud cost planning tend to save significantly more," he said. "In some instances, specific licenses can more than quadruple the costs of the cloud infrastructure on which the applications run."

As organizations increasingly shift to multicloud deployments, Adler said enterprises must have governance and optimization practices in place.

"Governance helps keep cloud resource owners on track and limit over-provisioning, while multicloud optimization processes and tools help keep costs under control," Adler said.

About the Author(s)

Sean Michael Kerner


Sean Michael Kerner is an IT consultant, technology enthusiast and tinkerer. He consults to industry and media organizations on technology issues.

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