Flexera 2024 State of the Cloud: Cost optimisation, FinOps and GenAI key takeaways

James has more than a decade of experience as a tech journalist, writer and editor, and served as Editor in Chief of TechForge Media between 2017 and 2021. James was named as one of the top 20 UK technology influencers by Tyto, and has also been cited by Onalytica, Feedspot and Zsah as an influential cloud computing writer.

Flexera has admitted that 2024 is a ‘complex’ year for cloud adoption as the company publishes its latest State of the Cloud report – and while cost optimisation remains key, sustainability is slowly emerging as an important differentiator.

The report – the 13th – is often regarded as a benchmark study for the industry, with the IT and cloud management provider polling more than 750 decision makers around usage and trends.

Some trends are practically at the point of saturation; 89% of respondents had a multi-cloud setup – up two percentage points from the year before – with almost three quarters (73%) of overall respondents using hybrid cloud. AWS was used by 78% of those polled, with half of overall respondents (49%) running significant workloads. For Azure, it was 80% and 45% respectively.

When it came to priorities between cost optimisation and sustainability, 59% of decision makers said cost optimisation was the primary consideration. Only 8% said sustainability and reducing their carbon footprint; yet 29% of respondents said both were of equal priority. Almost half of those polled (48%) said they had already defined sustainability initiatives, including tracking the carbon footprint of cloud usage.

A full quarter of respondents said they were using generative AI services from public cloud providers. 22% used them sparingly and 38% said they were experimenting. Flexera noted that ‘nearly all’ platform as a service (PaaS) offerings saw a gain in usage.

The strong focus on cost optimisation means that organisations are turning to FinOps tools in order to help. 57% of respondents overall use multi-cloud FinOps tools. More than half (51%) of those polled said they had a FinOps team to in part manage, advise, or execute on cloud cost optimisation strategies. A further 20% said they were planning to implement this in the next 12 months.

With regard to where responsibility lies for cloud spend (below), there was an interesting data point. Governing cloud usage and costs – be they IaaS or PaaS – was the responsibility of specific cloud teams (52%) and infrastructure/Ops teams (53%) at largely the same rate. But for specifically optimising cloud spend, the difference – 42% cloud teams, 56% infrastructure/Ops teams – was significant.

56% of respondents said they had an automated utilisation monitoring policy, with 48% automating a policy to shut down workloads after hours. In spite of this, only 35% of organisations polled currently use automated policies which implement required tags. A further 39% of respondents do this manually.

If the balance between optimising costs and sustainability is more towards the former right now, sustainability directives in Europe – such as the CSRD (Corporate Sustainability Reporting Directive) and the ESRS (European Sustainability Reporting Standards) – might move the needle. Compared with the global figures, 56% of Europe-based respondents said they had a defined sustainability initiative in place.

“Organisations are navigating economic uncertainties by investing in generative AI, security and sustainability while prioritising cost management,” said Brian Adler, senior director, cloud market strategy at Flexera, adding that cloud adoption continues to grow.

“The shift toward hybrid and multi-cloud environments underscores the importance of comprehensive cost management, with nearly half of all workloads and data now in the public cloud,” Adler added. “FinOps practices and cloud centres of excellence are growing as companies move toward centralised, strategic cloud management.”

You can read the full report (email required) here.

Photo by maitree rimthong

Charts credited to Flexera 2024 State of the Cloud Report and used under CC BY 4.0 licence.

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