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Stretching Cloud Investments for Optimal Results

Grant Duxbury
Aptum

Cloud computing continues to soar, with little signs of slowing down. Gartner predicts a 5.5% global increase in digital technology spending in 2023, with a significant percentage of it going to cloud initiatives. But, as with any new program, companies are seeing substantial benefits in the cloud but are also navigating budgetary challenges.

With an estimated 94% of companies using cloud services today, priorities for IT teams have shifted from purely adoption-based to deploying new strategies. As they explore new territories, it can be a struggle to exploit the full value of their spend and the cloud's transformative capabilities.

Realizing the Benefits of the Cloud

The significant benefits experienced by cloud adoption make the costly investment worthwhile over time. Some of the most notable advantages include increased efficiencies, reliability and scalability. Part two of Aptum's Cloud Impact Study, titled Maximizing Value: Controlling Costs and Optimizing Cloud Spend surveyed 400 senior IT professionals in the US, UK and Canada. The study revealed that 95% of respondents stated the cloud is an important way to deliver better business continuity, 93% said it helps their organization improve security and better manage data, and 94% agreed that cloud has delivered expected efficiency gains in 2023.

For many organizations, the return on their cloud transformation results from the flexibility it offers compared to costly legacy systems. Companies can scale up or down based on their unique needs at any time, eliminating unnecessary spending on excess capacity.

Controlling Costs

Cloud investments are a substantial part of a company's budget, with 71% of IT professionals reporting that cloud-related costs account for 30% or more of their total IT spend, and 34% said it accounts for the majority of their tech budgets.

While the cloud provides many operational benefits to organizations, there is still work to be done economically — 73% of survey respondents said their cloud investments have led to higher-than-expected IT costs in the past 12 months, a 28% increase from 2021. Additionally, 52% of IT professionals stated their organizations have wasted significantly on inefficiencies with their cloud platforms and services.

Understandably, many organizations jumped head-first into the cloud during the pandemic and are now realizing the implications of the lack of a Cloud Adoption Framework. While many factors can play into increased costs, the most common are the lack of strategic plan and skills readiness to manage cloud usage effectively and efficiently. These shortcomings are exacerbated for organizations using a hybrid or multi-cloud approach with a mix of on-prem and public cloud services for different data needs and workloads.

Today, most IT professionals believe their organization lacks the right skills and expertise to plan complex and multi-cloud implementations, with 62% agreeing that a lack of internal expertise has prevented them from accelerating cloud implementations. This is imperative for controlling runaway costs and inefficiencies. Companies must have resources with the necessary skills and knowledge to make more informed decisions.

The Power of FinOps

In addition to investing in the right talent and more informed strategies, companies can address cloud costs by adopting FinOps. A collaborative culture approach between diverse teams, FinOps helps organizations gain real visibility into their cloud costs to make more informed decisions. FinOps brings together teams such as engineers, finance and product to create a central, cross-functioning "Center of Excellence" that is dedicated to offering best practices to stakeholders by aiding them in optimizing the company's cloud expenditures.

According to McKinsey, adopting FinOps in a complex cloud environment can reduce costs by as much as 30%. Controlling costs was the top challenge reported in the study, with 37% of IT professionals stating that a key driver of their cloud strategy and investment is gaining more flexibility and scalability in the amount of capacity available.

FinOps is a viable way to address IT professionals' challenges by bringing control and flexibility to achieve more cost-effective cloud consumption.

As the study found, the benefits of cloud computing are irrefutable given its potential for scalability, agility and cost savings. However, in order to reap its true benefits, companies must have a clear strategy in place, including the use of FinOps to ensure it is operating efficiently. Without this level of structure and planning, businesses will continue to experience unexpected costs, security breaches and operational inefficiencies.

Grant Duxbury is Global Director, Advisory & Consulting Services, at Aptum

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Stretching Cloud Investments for Optimal Results

Grant Duxbury
Aptum

Cloud computing continues to soar, with little signs of slowing down. Gartner predicts a 5.5% global increase in digital technology spending in 2023, with a significant percentage of it going to cloud initiatives. But, as with any new program, companies are seeing substantial benefits in the cloud but are also navigating budgetary challenges.

With an estimated 94% of companies using cloud services today, priorities for IT teams have shifted from purely adoption-based to deploying new strategies. As they explore new territories, it can be a struggle to exploit the full value of their spend and the cloud's transformative capabilities.

Realizing the Benefits of the Cloud

The significant benefits experienced by cloud adoption make the costly investment worthwhile over time. Some of the most notable advantages include increased efficiencies, reliability and scalability. Part two of Aptum's Cloud Impact Study, titled Maximizing Value: Controlling Costs and Optimizing Cloud Spend surveyed 400 senior IT professionals in the US, UK and Canada. The study revealed that 95% of respondents stated the cloud is an important way to deliver better business continuity, 93% said it helps their organization improve security and better manage data, and 94% agreed that cloud has delivered expected efficiency gains in 2023.

For many organizations, the return on their cloud transformation results from the flexibility it offers compared to costly legacy systems. Companies can scale up or down based on their unique needs at any time, eliminating unnecessary spending on excess capacity.

Controlling Costs

Cloud investments are a substantial part of a company's budget, with 71% of IT professionals reporting that cloud-related costs account for 30% or more of their total IT spend, and 34% said it accounts for the majority of their tech budgets.

While the cloud provides many operational benefits to organizations, there is still work to be done economically — 73% of survey respondents said their cloud investments have led to higher-than-expected IT costs in the past 12 months, a 28% increase from 2021. Additionally, 52% of IT professionals stated their organizations have wasted significantly on inefficiencies with their cloud platforms and services.

Understandably, many organizations jumped head-first into the cloud during the pandemic and are now realizing the implications of the lack of a Cloud Adoption Framework. While many factors can play into increased costs, the most common are the lack of strategic plan and skills readiness to manage cloud usage effectively and efficiently. These shortcomings are exacerbated for organizations using a hybrid or multi-cloud approach with a mix of on-prem and public cloud services for different data needs and workloads.

Today, most IT professionals believe their organization lacks the right skills and expertise to plan complex and multi-cloud implementations, with 62% agreeing that a lack of internal expertise has prevented them from accelerating cloud implementations. This is imperative for controlling runaway costs and inefficiencies. Companies must have resources with the necessary skills and knowledge to make more informed decisions.

The Power of FinOps

In addition to investing in the right talent and more informed strategies, companies can address cloud costs by adopting FinOps. A collaborative culture approach between diverse teams, FinOps helps organizations gain real visibility into their cloud costs to make more informed decisions. FinOps brings together teams such as engineers, finance and product to create a central, cross-functioning "Center of Excellence" that is dedicated to offering best practices to stakeholders by aiding them in optimizing the company's cloud expenditures.

According to McKinsey, adopting FinOps in a complex cloud environment can reduce costs by as much as 30%. Controlling costs was the top challenge reported in the study, with 37% of IT professionals stating that a key driver of their cloud strategy and investment is gaining more flexibility and scalability in the amount of capacity available.

FinOps is a viable way to address IT professionals' challenges by bringing control and flexibility to achieve more cost-effective cloud consumption.

As the study found, the benefits of cloud computing are irrefutable given its potential for scalability, agility and cost savings. However, in order to reap its true benefits, companies must have a clear strategy in place, including the use of FinOps to ensure it is operating efficiently. Without this level of structure and planning, businesses will continue to experience unexpected costs, security breaches and operational inefficiencies.

Grant Duxbury is Global Director, Advisory & Consulting Services, at Aptum

Hot Topics

The Latest

As businesses increasingly rely on high-performance applications to deliver seamless user experiences, the demand for fast, reliable, and scalable data storage systems has never been greater. Redis — an open-source, in-memory data structure store — has emerged as a popular choice for use cases ranging from caching to real-time analytics. But with great performance comes the need for vigilant monitoring ...

Kubernetes was not initially designed with AI's vast resource variability in mind, and the rapid rise of AI has exposed Kubernetes limitations, particularly when it comes to cost and resource efficiency. Indeed, AI workloads differ from traditional applications in that they require a staggering amount and variety of compute resources, and their consumption is far less consistent than traditional workloads ... Considering the speed of AI innovation, teams cannot afford to be bogged down by these constant infrastructure concerns. A solution is needed ...

AI is the catalyst for significant investment in data teams as enterprises require higher-quality data to power their AI applications, according to the State of Analytics Engineering Report from dbt Labs ...

Misaligned architecture can lead to business consequences, with 93% of respondents reporting negative outcomes such as service disruptions, high operational costs and security challenges ...

A Gartner analyst recently suggested that GenAI tools could create 25% time savings for network operational teams. Where might these time savings come from? How are GenAI tools helping NetOps teams today, and what other tasks might they take on in the future as models continue improving? In general, these savings come from automating or streamlining manual NetOps tasks ...

IT and line-of-business teams are increasingly aligned in their efforts to close the data gap and drive greater collaboration to alleviate IT bottlenecks and offload growing demands on IT teams, according to The 2025 Automation Benchmark Report: Insights from IT Leaders on Enterprise Automation & the Future of AI-Driven Businesses from Jitterbit ...

A large majority (86%) of data management and AI decision makers cite protecting data privacy as a top concern, with 76% of respondents citing ROI on data privacy and AI initiatives across their organization, according to a new Harris Poll from Collibra ...

According to Gartner, Inc. the following six trends will shape the future of cloud over the next four years, ultimately resulting in new ways of working that are digital in nature and transformative in impact ...

2020 was the equivalent of a wedding with a top-shelf open bar. As businesses scrambled to adjust to remote work, digital transformation accelerated at breakneck speed. New software categories emerged overnight. Tech stacks ballooned with all sorts of SaaS apps solving ALL the problems — often with little oversight or long-term integration planning, and yes frequently a lot of duplicated functionality ... But now the music's faded. The lights are on. Everyone from the CIO to the CFO is checking the bill. Welcome to the Great SaaS Hangover ...

Regardless of OpenShift being a scalable and flexible software, it can be a pain to monitor since complete visibility into the underlying operations is not guaranteed ... To effectively monitor an OpenShift environment, IT administrators should focus on these five key elements and their associated metrics ...