Flexera State of the Cloud 2021: One in three companies spend more than $12 million a year on the public cloud

Flexera has released its State of the Cloud 2021 report, an annual benchmark in the cloud industry around strategy, workload allocation, cost management, etc.

The study, which surveyed 750 policy makers and global users in the public, private and multi-cloud markets, found that companies continue to embrace multi-cloud and public cloud – but continue to struggle with spending.

92% of respondents had a multi-cloud strategy. This is slightly down from 93% in the 2020 edition. However, while 87% of last year’s cohort used a hybrid cloud strategy, this number has fallen to 82% this time, which means that more companies are using multiple public clouds.

Similarly, just under a third (31%) companies reported spending more than $12 million a year – seven digits a month, for those less inclined to math – on the public cloud. That’s one in five this time last year. It is a lucrative industry, but there is still much more room for growth. It is expected that 54% of corporate workloads will be in the public cloud in 12 months.

The 2020 report, released in April, fell amid the first global lockdowns of the coronavirus pandemic. As a result, Covid’s nascent impact was a priority. 12 months later and the trend towards accelerated digital transformation is confirming here; 90% of respondents who answered a question about Covid-19 think cloud use will exceed expectations.

For the fifth year in a row, the organizations’ main initiative has been to optimize cloud costs – cited by 61% of respondents. More than three-quarters (76%) reported using profitability and savings to measure cloud progress.

In terms of specific providers, Amazon Web Services (AWS) continues to lead the store with a slight increase in percentage points, but Microsoft Azure has significantly narrowed the gap. AWS has penetration among 77% of Flexera respondents, compared to 76%, ahead of Azure on 73% – against 63%. Google Cloud also experienced double-digit year-over-year growth, at 47% compared to 35% the previous year, as did Oracle (29%) IBM (24%).

In terms of organizational approaches to the cloud, three-quarters of respondents have a central cloud team (39%) centre of excellence (36%). This is most evident in companies, where only 8% had no plans, compared to SMEs (23%).

This naturally removes other departments, already loaded with a myriad of other tasks. For the financial segments, cloud teams still dominate. Reporting and analyzing cloud costs was a task for cloud teams by almost half (45%) companies surveyed, compared with 21% for finance. The rebill of cloud costs, with 26% in finance and 36% in the specific cloud team, saw less disparity.

While managing spending in the cloud was the main initiative, security remained the main challenge, cited by 81% of respondents versus 79%. Yet governance, compliance and lack of resources were all surveyed at more than 75%. On the business side, these challenges remain constant, but slightly more achievable; security fell by two percentage points over one year, with spending in the cloud down three.

In the end, the 2021 iteration of Flexera’s state of the cloud report shows even more continuous growth, without real surprise – Azure’s comparative reduction of the side gap – and Covid accelerating already pernicious problems.

However, Jim Ryan, President and CEO of Flexera, had a warning. “Covid-19 has accelerated the migration to cloud computing. Yet the cloud is neither magic nor the land of milk and honey,” he said. “Companies are evolving rapidly, facing challenges and trying to connect cloud computing to business results.

“Real-world challenges, such as managing security and optimizing spending in the cloud, still need to be addressed,” Ryan added.

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