Flexera’s annual report says enterprises expect cloud spending to increase
Most enterprises will use the public cloud more this year than initially planned in response to the spreading coronavirus outbreak, according to the latest report on the cloud from Flexera.
The Lowdown: The Flexera 2020 State of the Cloud Report (formerly the RightScale State of the Cloud Report), released this week, also notes the continued adoption of multicloud and hybrid cloud strategies by most businesses and ongoing concern about security in the cloud.
The Details: The COVID-19 pandemic has driven the majority of employees to work from home and accelerated businesses’ digital transformation plans, fueling the demand for cloud services, according to the report. Key findings in the report include:
> Planned cloud usage: 57% of all businesses (59% of enterprises and 50% of SMBs) will use the cloud this year slightly or significantly more than planned because of the public health crisis.
> Multicloud: 93% of respondents said they have a multicloud strategy, while 87% said they’re adopting a hybrid cloud model. They use an average of 2.2 public clouds and 2.2 private clouds.
> Public clouds: 28% of enterprises spend more than $12 million a year on public cloud, and more than 50% of enterprise workloads and data are expected to be in a public cloud within 12 months.
> Cloud spend: Organizations are an average of 23% over budget in the amount they spend on the cloud and expect that cloud spend to grow by 47% next year. They estimate that 30% of that spend is wasted.
> Cloud initiatives: 73% of respondents will focus on cost savings in the cloud, making it the top priority, followed by cloud migration (61%).
> Cloud challenges: 83% of enterprises said security is a challenge, followed by managing the cloud (82%) and governance (79%).
Itasca, Illinois-based Flexera, a software asset management firm, surveyed 750 tech professionals from around the world and across a range of industries during the first quarter. The report is available here.
The Impact: The rapid transformation to a remote workforce has led to a spike in a number of tech sectors, including videoconferencing and other remote collaboration tools and the public cloud. Google Cloud reported this week that it saw revenue jump 52% in the first quarter and Chinese e-commerce giant Alibaba earlier this month announced it was investing $28 billion over three years to expand its cloud business in a move driven in part by rising demand fueled by the pandemic.
The Buzz: “The State of the Cloud survey captures insights into how organizations are progressing in their journey to cloud,” Flexera President and CEO Jim Ryan said. “That journey is even more important for businesses today as we face the unprecedented operational impacts of the COVID-19 pandemic. With employees working from home and more business interactions going digital, more than half of enterprise respondents said their cloud usage will be higher than originally planned at the beginning of the year due to the pandemic. Companies plan to migrate more services to cloud, yet they’re already exceeding cloud budgets. They will need to focus on optimizing workloads as they migrate in addition to cost management and governance to ensure operational efficiency.”