Top Cloud Trends for 2025: Wrangling Cloud Spend, Expanding FinOps Teams, and Adopting GenAI

Brian Adler
Flexera

Cloud computing evolves rapidly, with each year bringing new technologies and trends that IT professionals must navigate. The Flexera 2025 State of the Cloud Report spotlights these pressures and how they are set to shape IT strategy in the year ahead, leveraging the expert insights of over 750 global cloud decision-makers.

From growing reliance on FinOps teams to the increasing attention on artificial intelligence (AI), and software licensing, this year's report digs into how organizations are improving cloud spend efficiency, while tackling the complexities of emerging technologies.

Cloud Usage Continues to Grow Amid Repatriation Efforts

One thing is clear: organizations are still embracing the cloud. In fact, it seems that many have arrived at their steady state, having settled into an efficient and effective cloud environment that meets their standing needs. For most enterprises, this manifests in a hybrid cloud strategy with at least one public and one private cloud.

In particular, public cloud spend continues to increase. The report uncovered 33% of organizations are spending more than $12 million annually on public cloud alone, up from 29% last year. Among large enterprises, that figure increases to 40%. Along with these growing percentages, some organizations are exploring cloud repatriation.

Today, the current cloud inefficiencies and potential for cost savings are being factored into some IT decision discussions, as leaders consider the option of moving certain workloads from the cloud and back to on-premises data centers. However, this shift toward repatriation is happening slowly. Only 21% of cloud workloads have been repatriated, which is far outpaced by the rate of net-new cloud projects. Even with some moving their workloads to non-cloud environments, cloud usage is still on the rise — now and in the foreseeable future.

Cost Management and Security Sit Top of Mind

Year-over-year, managing cloud spend remains the top challenge for organizations. As additional workloads migrate to the cloud and the associated cost increases, so does the pressure to optimize that spend. A large majority (87%) of respondents cite "cost efficiency/savings" as their top metric for validating team success against cloud goals, further underscoring this narrative. Notably, this year, "cost avoidance," which can be achieved with proper license management, was resurgent among secondary progress metrics, rising from 28% to 64%.

The difficulty of accurate forecasting has also helped turn managing cloud spend into a perennial problem. Organizations are seeking to solve forecasting challenges — and overspending — with the use of FinOps teams. With the proper FinOps framework, organizations are empowered to maximize the business value of cloud, enable timely, data-driven decision making, and encourage cross-team collaboration for greater financial accountability. 86% of organizations either currently have a dedicated FinOps team responsible for some or all of their cloud cost optimization tasks or are planning to implement one within the next year and beyond. Understanding the value of these practices, the number of organizations not using a FinOps team dropped by 6 percentage points from 2024.

Beyond cloud spend, security also received a podium finish, coming in as the second-largest concern for cloud initiatives. In an age of increasingly advanced cyber threats, it's no surprise that security weighs heavy on the minds of many respondents. Specifically, 75% identified governance, managing software licenses, and a lack of resources and expertise as the main drivers behind security concerns.

Generative AI Is Here to Stay

Having dominated industry conversation over recent years, AI, especially generative AI (GenAI), is moving beyond hype to enterprise integration. An impressive 83% of organizations are already using or currently experimenting with GenAI — the most interest any new Platform-as-a-Service offering has generated in the State of the Cloud Report's 14-year history.

The rate of adoption will only continue to increase as the technology advances, becoming more accurate and widely incorporated in daily workflows, products, and services. Last year, 14% of organizations reported not using GenAI. This year, that figure has plummeted to just 1% of organizations. The use of data warehouse services also surged this year, and given they are often used to feed AI models, serves as yet another indicator that GenAI is clearly here to stay long-term.

What's Coming

Looking ahead to the rest of 2025 and beyond, cloud initiatives will be defined by this skyrocketing interest in emerging technologies like GenAI, and the need to optimize spend associated with growing cloud usage. In the coming years, FinOps is likely to emerge as the new normal for combating cost challenges.

Understanding cloud usage and mastering cloud management isn't an easy task, but it can be done with proper oversight and a team of collaborative professionals. It remains to be seen what technologies pass the tipping point from novel to necessity and continue to make an impact. 

Brian Adler is Senior Director of Cloud Market Strategy at Flexera

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Top Cloud Trends for 2025: Wrangling Cloud Spend, Expanding FinOps Teams, and Adopting GenAI

Brian Adler
Flexera

Cloud computing evolves rapidly, with each year bringing new technologies and trends that IT professionals must navigate. The Flexera 2025 State of the Cloud Report spotlights these pressures and how they are set to shape IT strategy in the year ahead, leveraging the expert insights of over 750 global cloud decision-makers.

From growing reliance on FinOps teams to the increasing attention on artificial intelligence (AI), and software licensing, this year's report digs into how organizations are improving cloud spend efficiency, while tackling the complexities of emerging technologies.

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One thing is clear: organizations are still embracing the cloud. In fact, it seems that many have arrived at their steady state, having settled into an efficient and effective cloud environment that meets their standing needs. For most enterprises, this manifests in a hybrid cloud strategy with at least one public and one private cloud.

In particular, public cloud spend continues to increase. The report uncovered 33% of organizations are spending more than $12 million annually on public cloud alone, up from 29% last year. Among large enterprises, that figure increases to 40%. Along with these growing percentages, some organizations are exploring cloud repatriation.

Today, the current cloud inefficiencies and potential for cost savings are being factored into some IT decision discussions, as leaders consider the option of moving certain workloads from the cloud and back to on-premises data centers. However, this shift toward repatriation is happening slowly. Only 21% of cloud workloads have been repatriated, which is far outpaced by the rate of net-new cloud projects. Even with some moving their workloads to non-cloud environments, cloud usage is still on the rise — now and in the foreseeable future.

Cost Management and Security Sit Top of Mind

Year-over-year, managing cloud spend remains the top challenge for organizations. As additional workloads migrate to the cloud and the associated cost increases, so does the pressure to optimize that spend. A large majority (87%) of respondents cite "cost efficiency/savings" as their top metric for validating team success against cloud goals, further underscoring this narrative. Notably, this year, "cost avoidance," which can be achieved with proper license management, was resurgent among secondary progress metrics, rising from 28% to 64%.

The difficulty of accurate forecasting has also helped turn managing cloud spend into a perennial problem. Organizations are seeking to solve forecasting challenges — and overspending — with the use of FinOps teams. With the proper FinOps framework, organizations are empowered to maximize the business value of cloud, enable timely, data-driven decision making, and encourage cross-team collaboration for greater financial accountability. 86% of organizations either currently have a dedicated FinOps team responsible for some or all of their cloud cost optimization tasks or are planning to implement one within the next year and beyond. Understanding the value of these practices, the number of organizations not using a FinOps team dropped by 6 percentage points from 2024.

Beyond cloud spend, security also received a podium finish, coming in as the second-largest concern for cloud initiatives. In an age of increasingly advanced cyber threats, it's no surprise that security weighs heavy on the minds of many respondents. Specifically, 75% identified governance, managing software licenses, and a lack of resources and expertise as the main drivers behind security concerns.

Generative AI Is Here to Stay

Having dominated industry conversation over recent years, AI, especially generative AI (GenAI), is moving beyond hype to enterprise integration. An impressive 83% of organizations are already using or currently experimenting with GenAI — the most interest any new Platform-as-a-Service offering has generated in the State of the Cloud Report's 14-year history.

The rate of adoption will only continue to increase as the technology advances, becoming more accurate and widely incorporated in daily workflows, products, and services. Last year, 14% of organizations reported not using GenAI. This year, that figure has plummeted to just 1% of organizations. The use of data warehouse services also surged this year, and given they are often used to feed AI models, serves as yet another indicator that GenAI is clearly here to stay long-term.

What's Coming

Looking ahead to the rest of 2025 and beyond, cloud initiatives will be defined by this skyrocketing interest in emerging technologies like GenAI, and the need to optimize spend associated with growing cloud usage. In the coming years, FinOps is likely to emerge as the new normal for combating cost challenges.

Understanding cloud usage and mastering cloud management isn't an easy task, but it can be done with proper oversight and a team of collaborative professionals. It remains to be seen what technologies pass the tipping point from novel to necessity and continue to make an impact. 

Brian Adler is Senior Director of Cloud Market Strategy at Flexera

Related Links

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Operator to Orchestrator: 80% of IT Pros See Shift in Role as AI Permeates Workflows

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Gartner: 40% of Organizations Deploying AI Will Use AI Observability to Monitor Model Performance by 2028

40% of organizations deploying AI will implement dedicated AI observability tools by 2028 to monitor model performance, bias and outputs, according to Gartner ...

Almost Half of AI-Generated Code Fails in Production

Until AI-powered engineering tools have live visibility of how code behaves at runtime, they cannot be trusted to autonomously ensure reliable systems, according to the State of AI-Powered Engineering Report 2026 report from Lightrun. The report reveals that a major volume of manual work is required when AI-generated code is deployed: 43% of AI-generated code requires manual debugging in production, even after passing QA or staging tests. Furthermore, an average of three manual redeploy cycles are required to verify a single AI-suggested code fix in production ...

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Many organizations describe AI as strategic, but they do not manage it strategically. When AI plans are disconnected from strategy, detached from organizational learning, and protected from serious assumptions testing, the problem is no longer technical immaturity; it is a failure of management discipline ... Executives too often tell organizations to "use AI" before they define what AI is supposed to change. The problem deepens in organizations where strategy isn't well articulated in the first place ...

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Today's modern systems are not what they once were. Organizations now rely on distributed systems, event-driven workflows, hybrid and multi-cloud environments and continuous delivery pipelines. While each adds flexibility, it also introduces new, often invisible failures. Development speed is no longer the primary bottleneck of innovation. Reliability is ...

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