Almost half of businesses struggle to control cloud costs

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Almost half of businesses struggle to control cloud costs
Duncan is an award-winning editor with more than 20 years experience in journalism. Having launched his tech journalism career as editor of Arabian Computer News in Dubai, he has since edited an array of tech and digital marketing publications, including Computer Business Review, TechWeekEurope, Figaro Digital, Digit and Marketing Gazette.

Nearly half of businesses (49%) find it difficult to get cloud costs under control, and 54% believe their primary source of cloud waste is a lack of visibility into cloud usage.

This is according to a new report published today by business monitoring company Anodot. The findings highlight an ongoing visibility crisis in which organisations are struggling to gain appropriate insights into the breakdown of cloud costs and efficiency of cloud use and therefore cannot effectively reduce wasted spend – even as cloud migration continues to rise and cutting costs is a priority. The report is based on a survey of 131 US-based IT directors and executives.

Anodot’s 2021 State of Cloud Cost Report revealed that the pandemic greatly accelerated many companies’ shift to the cloud, and the latest survey confirms that the transition is continuing as businesses continue to appreciate the agility and scalability the cloud provides: 91% of respondents reported they currently have IT infrastructure in the cloud; 60% said that migrating more workloads to the cloud is their top cloud initiative in the coming year. As enterprises continue to face high monthly cloud bills – with cloud costs ranking second only to payroll in terms of business expenses for many – visualising costs, optimising spend and reducing wasted dollars are top priorities, especially in the wake of a slowing economy.

A significant portion of these inflated cloud bills could have been avoided: 44% of respondents said that at least one-third (33%) of their cloud spend is wasted each year. Visibility is the main culprit: the majority of executives surveyed (53%) said gaining visibility into cloud usage and costs is their top challenge for controlling spend and reducing waste; one-fifth (19%) said they lack the ability to manage their cloud budget due to insufficient visibility into cloud usage. Cloud costs are also becoming increasingly complex to track and understand, also leading to misspending: 46% of executives reported that overprovisioning is a primary source of cloud waste, while 45% blamed cloud assets’ fragmentation across teams and vendors.

David Drai, Anodot CEO and co-founder, said: “Shifting to the cloud requires a delicate balance between the speed of workload migration and cost control.

“Today, cloud cost management – which is all the more crucial as businesses strive to mitigate wasted resources and shore up revenues – should be based on four key elements: visibility, insights, recommendations, and automated actions. Enterprises that are leveraging AI and ML to control and optimise their cloud environments are seeing immediate results and reduced waste, unlocking the true value the cloud has always promised.”

Additional findings:
● Surprise, Surprise: Over a third of participants (37%) have been surprised by their cloud costs or had an incident related to cloud costs.
● Growing Complexity: When asked to choose the top challenges in controlling cloud costs, 53% said the key challenge is gaining true visibility into cloud usage and costs; 50% said complex cloud pricing; 49% said complex, multi-cloud environments.*
● Unnoticed Spikes: 28% of respondents said it takes weeks or months to notice a spike in cloud costs – no improvement in the average time to detect incidents since 2021.

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