Global Companies Overshoot Cloud Budgets: A New Study Reveals Troubling Trend and Highlights the Urgent Need for Better Cost Control

Boomi

CONSHOHOCKEN, PA — A recent study commissioned by Boomi and conducted by Forrester Consulting reveals a troubling trend among global companies: excessive and unregulated cloud spend. The study, released in December 2023, paints a clear picture of companies scrambling to mitigate rising costs, often without a comprehensive understanding of their entire cloud cost environment.

In the last fiscal year, an astonishing 72% of global companies exceeded their allotted cloud budgets, highlighting a significant issue within the industry. With U.S. public cloud spending expected to surpass $1 billion by 2026, it’s more critical than ever for businesses to reassess and improve their cloud cost management and optimization (CCMO) strategies.

Despite evidence suggesting that industry leaders are placing a higher priority on early-stage CCMO tactics (65%), the study’s results underscore a pervasive lack of proactive cost containment strategies during the solution architecture stage. A mere six percent of decision-makers reported that their cloud cost remediation strategies are fully proactive, and only 40% said they effectively control costs during the solution architecture process.

The data suggests that many organizations understand the potential for cost optimization at the solution architecture level but fail to implement the necessary strategies. Current problem areas include excessive storage (52%), a lack of integration strategy (44%), and overconsumption of bandwidth (42%).

Boomi’s Chief Product & Technology Officer, Ed Macosky, suggests this highlights an industry-wide exclusion of integration in the cloud cost equation. He stated, “When systems are disconnected and data is siloed, companies are only seeing part of their organizations’ cloud cost picture. This lack of visibility impacts tracking and decision making.”

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Macosky’s assertion is echoed in the survey’s findings. When asked about the difficulty of tracking cloud spend with current CCMO tools, leaders identified data management, egress charges (fees for moving data in and out of the cloud), and the time and resources needed to maintain app integrations as the most challenging areas to monitor.

But integration doesn’t just pose a problem — it could also be a solution. Macosky argues that integration has the potential to act as a control layer in calculating cloud costs. The root problem of wasteful cloud spend, however, remains a challenge for 40% of companies. With 56% of respondents agreeing that their CCMO recommendations are only as reliable as the data they can provide, the need for robust data integration and management is evident.

Several key findings emerged from the study, all of which have potential ramifications for the industry:

  1. More cloud complexity is expected in the coming years, with decision-makers predicting increased applications in IT operations, hybrid work, software creation platforms and tools, and digital experiences.
  2. FinOps practices are also experiencing challenges similar to those in CCMO, with nearly half of respondents lacking visibility into FinOps costs. A lack of supporting cloud architecture at the integration level is preventing 35% of leaders from advancing their FinOps cost control initiatives.
  3. Cost mitigation is likely to improve with early integration. A convincing 67% of respondents agreed that an integration platform bridging apps, data, and people could significantly enhance cloud efficiencies and reduce overall cloud spend from the solution architecture stage.

The survey’s results paint a complex picture for the future of cloud cost management. The cry for more effective strategies and improved integration is clear, and as cloud complexity continues to rise, better control mechanisms will be indispensable for maintaining financial stability in an increasingly digitized world.

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