A survey from Vega Cloud found 62% of respondents are more closely monitoring all IT costs, with more than half (52%) more closely evaluating their cloud service provider options.
The survey polled 100 vice presidents from organizations with more than 1,000 employees and was published today by Vega Cloud, a provider of a platform for managing multiple clouds.
Overall, nearly half of respondents (48%) said they expected to reduce their IT spending a little or a lot in 2023, with 65% identifying the reduction of cloud spending as a specific goal. Three quarters (75%) are looking to cut cloud costs by 10-50% in 2023, the survey found.
A full 93% reported they have invested at least a fair amount of money on tools to optimize cloud costs, with 82% having invested in FinOps staff or people with FinOps experience. The challenge is that 70% of respondents said it was difficult to find people with these skill sets, the survey found.
The best way for organizations to reduce cloud costs is to become more informed about what they’re spending (40%), and 33% said that the best approach is to consistently optimize use of cloud resources. A total of 61% identified reserved instances/savings plans as the best way to optimize cloud use, while 55% said optimization was best achieved through waste elimination followed closely by right-sizing (54%).
Vega Cloud CEO Kris Bliesner said it’s clear the days when organizations allowed developers to consume cloud resources at will are coming to an end as cloud services consume a much larger percentage of the IT budget. In fact, the survey noted that 91% of respondents are spending at least one million dollars annually on cloud infrastructure alone.
The issue is that finance departments not only want to reduce cloud spend but also want cloud spending to become more predictable from a budget perspective. Nearly half of survey respondents (45%) said they’d received a surprise in their cloud bills “a number of times” over the past 12 months, with 70% of respondents noting surprises have happened at least a half dozen times in the past year.
A total of 40% admitted they had exceeded budgets multiple times in the past year, and 38% said they had to modify their forecast cloud spending budget numerous times over the past 12 months. More than half of respondents (55%) said database costs are the metric that matters most when looking at cloud usage followed by bandwidth costs (51%), storage costs (49%) and compute costs (47%). Nearly two-thirds (64%) said they track metrics at least somewhat often, while 46% said they have somewhat optimized their cloud use. A total of 11% said they’re not optimized at all.
A full 88% said they’re using artificial intelligence (AI) at least somewhat to optimize cloud use and costs, with nearly three-quarters (74%) noting they think ChatGPT or a similar generative AI tool could be used to optimize cloud use/costs further. Specifically, 42% said they thought it could improve decision making and 30% said it could automate decision making.
Among the cloud service providers, Google is cited as doing the most to help customers manage and reduce cloud costs (38%), followed by Amazon Web Services (34%) and Microsoft (28%)—but a full 85% said they could all be doing more.
Of course, changing economic conditions are naturally driving organizations to look harder at cloud spending. Well over half of respondents (56%) said they are concerned about the economy, and 95% of those respondents said those concerns have, at least somewhat, impacted their IT strategy.
It’s not clear whether organizations will continue to exercise greater control over cloud spending should the economy recover. For now, at least, there’s clearly more desire for control than ever.
