The state of the cloud in 2020: Public, multicloud dominates but waste spending is high

June 10, 2020

Originally published on TechRepublic.

As more businesses migrate to public clouds, they’re facing challenges related to optimization, security, and a lack of expertise, Flexera’s annual cloud report finds.

IT analytics firm Flexera has released its annual state of the cloud report for 2020, finding that public cloud adoption is skyrocketing and multicloud strategies are mainstream–but so is wasted spending, cloud management struggles, and security troubles.

“Cloud has now become mainstream,” the report said, and with good reason: 90% of those surveyed said they’re using at least one cloud service in their organization. Of those using cloud services, 93% have a multicloud strategy that combines multiple public and private clouds, while only six percent are using multiple public ones. 

With so many enterprises now using cloud services, it stands to reason that problems will emerge, and the report specifically mentions spending as a major source of trouble for businesses. 

The COVID-19 pandemic has added financial insult to injury. A late-added question in the report finds the outbreak likely to upend IT budgets due to significantly higher cloud usage due to remote work requirements of social distancing.

What’s new in cloud in 2020

As mentioned above, multicloud use has reached near total levels, with only seven percent of organizations limited to a single public or private cloud. 

More than half of organizations (53%) are using multiple public and multiple private clouds, followed closely by 33% using a single private cloud and multiple public ones. 

Cloud spending as a whole continues to grow as well, with the report finding that public cloud spending leads cloud budgets, especially among larger organizations: 20% of enterprises (defined in the survey as organizations with 1,000 or more employees) spend at least $12 million USD per year on public cloud resources.

There’s also a shifting mindset around where to store sensitive data. “In the past, some organizations hesitated to put certain types of data in public clouds,” the report states. As of early 2020, however, “more than half of respondents said they’ll consider moving at least some of their sensitive consumer data or corporate financial data to the cloud, which reflects increasing confidence in the security practices of the cloud providers.”

Top cloud challenges in 2020

Cloud adoption and spending may be increasing, but it may be increasing too quickly for some organizations to handle. Rapid cloud growth means rapid cloud spending, which in turn means organizations are struggling to accurately forecast how much to budget for the future. 

“Respondents reported their public cloud spend was over budget by an average of 23%. Moreover, respondents expect their cloud spend to further increase by 47% in the next 12 months,” The report found. 

That question about budget excess comes prior to considering what COVID-19 is doing to cloud budgets: Shredding them completely. 57% of respondents said work changes due to the pandemic will put them over budget–26% significantly. 

Furthering cloud budget problems is money wasted on underutilized services, which Flexera finds is generally underestimated: Most IT professionals say they waste about 3% of their cloud budget, but in its role consulting organizations on efficient cloud use, Flexera said it finds that number to be at least, and even higher, than 35%. 

Five percent may not seem like much of a difference, but when your cloud budget exceeds $1 million USD a year, that can equate to a lot of lost money.

Along with financial problems due to rapid cloud adoption, organizations also cited security as a serious concern, with 81% rating it as one of their biggest challenges. Governance, a lack of resources and expertise, and compliance were also cited as common challenges to better cloud adoption and use.

The full 2020 State of the Cloud report can be downloaded from Flexera, but registration is required. 

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