Cloud adoption continues to skyrocket, with 60% of corporate data reportedly stored in the cloud in 2022, up from 30% in 2015. As organizations become more familiar and confident in the cloud, they invest in sophisticated technologies to further innovation and reap significant benefits.
Despite the overwhelming enthusiasm around hybrid cloud infrastructures, hurdles remain around cloud optimization, according to the 2023 Cloud Impact Study, commissioned by Aptum. The study also reveals the untapped potential IT leaders should implement. A few notable highlights include:
Hybrid and Multi-cloud Environments
Hybrid environments that combine legacy infrastructure with one or more cloud providers are quickly becoming the standard. Companies prefer hybrid and multi-cloud environments to better accommodate legacy solutions, with 59% of survey respondents using a combination of public and private cloud services. The use of both cloud services is high, with 82% of IT leaders using private cloud infrastructure and 77% using public cloud services.
The popularity of these options is no surprise, with both offering substantial benefits. How do you choose?
The 34% of respondents that reported security and governance as important factors when choosing a cloud environment most likely lean toward the private cloud, as it gives them more control over how sensitive and valuable data is stored. Private cloud also tends to offer a lower total cost of ownership (TCO), given the familiarity and customization of the infrastructure to meet the company's unique needs.
Public cloud offers quick-to-market turnaround and lower capital costs for businesses. A third (33%) of respondents preferred public cloud data backup facilities.
Maximizing Cloud Investments
Cloud investments are a significant portion of IT budgets and continue rising despite growing economic uncertainty. According to Google, 41% of business and tech leaders plan to increase spending on cloud services in 2023 in response to the current economic climate. Half (51%) of respondents to the Aptum survey say the cloud is a crucial part of their strategy to weather the economic downturn by helping cut costs, with a third (33%) reporting that the cloud is vital to creating predictability and avoiding unexpected costs. Many (51%) stated they have already seen a cost reduction from cloud investments.
In addition to cost savings, the cloud is also helping organizations optimize spending (48%), drive innovation and develop new services (49%), and deliver a better customer experience (35%).
When evaluating cloud investments, priority was placed on increased efficiency (per 53% of respondents) and improved agility (48% of respondents) over cost savings, which was important to 32% of public cloud users and 33% of private cloud users.
Harnessing FinOps to Control Cloud Costs
To establish long-term, cost-effective cloud consumption, IT leaders should implement effective FinOps practices that bring control and predictability to costs. FinOps blends finance and operations, giving businesses greater visibility of cloud costs to optimize expenditures and maximize ROI. It's most effective when implemented before deploying cloud, but never too late to execute. The longer a company waits to implement FinOps, the greater the cost and effort it takes to move away from a data center mindset and toward a cost-effective cloud.
According to McKinsey, adopting FinOps in a complex cloud environment can reduce cloud costs by as much as 30%. To fully benefit from a sustainable FinOps approach, companies must go beyond merely committing to a spending level for cost reduction. Organizations can achieve more effective use of electricity, cooling, and financial resources by engineering solutions that focus on efficient resource management — utilizing automation, auto-scaling, and contemporary architectural patterns.
Addressing Challenges for Long-Term Success
Despite the vast majority of respondents (98%) in the survey sharing that they are satisfied with their organization's cloud transformation, only 41% reported they are completely satisfied. The results reveal that a few challenges in cloud management remain, including:
■ Integration (42%)
■ Delivering cost predictability (36%)
■ Lack of skills combined (33%)
■ Changes in technology (33%)
Many businesses accelerated cloud migration during the global pandemic without a comprehensive strategy, hindering their results and costs today. Navigating both cloud environments with legacy systems requires mature practices, expertise and effective tooling across technologies. Thirty-five percent of respondents reported they struggle to move their applications or data into the cloud, and a further 34% say they are held back from advancing their cloud maturity because of the complexity of their legacy systems and a lack of in-house knowledge (31%).
Creating a Cloud Strategy to Achieve Business Outcomes
Hybrid cloud environments continue to prove their worth, allowing companies to build technology structures that meet their unique needs. Organizations can overcome challenges by optimizing their cloud architecture, following three key action points:
■ Conduct a comprehensive cloud assessment. Evaluate existing infrastructure, services and applications to identify inefficiencies, redundancy or misalignment with business objectives.
■ Implement cloud governance and cost management policies including a FinOps program for cloud resource usage, including budget allocations, cost monitoring and reporting.
■ Leverage automation, monitoring tools and development team practices to help identify and remediate inefficiencies, reducing the risk of human error and streamlining cloud management.
Combining these three efforts and incorporating DevOps and FinOps principles with a trusted Managed Service provider, IT leaders can effectively address the cloud complexity challenges and maintain control over cost while still achieving business goals.
