Wasted cloud spend linked to blind cost management

Study cites companies’ inability to gain visibility at the architecture level is blowing out their cloud costs.

  • Tuesday, 2nd April 2024 Posted 1 week ago in by Phil Alsop

Boomi has launched the findings of a commissioned study conducted by Forrester Consulting on behalf of Boomi, December 2023, that reveals companies are fraught with uncontrolled and wasteful cloud spend, and cost remediation tactics are introduced too late or without a full picture of the environment.

The independent study found 72% of global companies exceeded their set cloud budgets in the last fiscal year. With public cloud spend expected to reach more than $1 billion in the US by 2026, the stakes are high for improving cloud cost management and optimization (CCMO) strategies.

Although the study shows leaders prioritizing CCMO tactics earlier in the cloud development process (65%), most companies lack proactive strategies at the earlier architecture level.

Just six percent of decision makers report their cloud cost remediation strategies are as proactive as possible, and only four in 10 say they contain costs at the solution architecture stage. While organizations are aware that they could optimize cloud costs at the solution architecture level, less than half of companies have the strategy in place to resolve perennial problems, such as excessive storage (52%), lack of integration strategy (44%) and overconsumption of bandwidth (42%).

“We believe the findings are a clear example of integration being left out of the cloud cost equation,” said Ed Macosky, Chief Product & Technology Officer at Boomi. “When systems are disconnected and data is siloed, companies are only seeing part of their organizations’ cloud cost picture, and this lack of visibility impacts tracking and decision making.”

When asked how difficult it is to track areas of cloud spend with the CCMO tooling currently in place, leaders stated data management as the most difficult undertaking, followed by egress charges (e.g., fees for moving data in and out of the cloud), with time and resources needed to build and maintain app integrations as the third most difficult area to track.

“More than half (56%) believe their CCMO recommendations are only as good as the data their company can provide. Yet 40% are struggling to fix the root problem of their wasteful cloud spend. The problem is integration is being viewed as a separate entity, when it actually has significant potential to act as a control layer in the reckoning of cloud costs,” said Macosky.

Further key findings from the study include:

More cloud complexity to come: Cloud workloads and costs will increase even more rapidly over the next two years, with decision makers expecting applications in IT ops (54%), hybrid work (50%), software creation platforms and tools (45%), and digital experiences (44%) to rise at the fastest rates.

FinOps practices are also being hit: Similar to CCMO tooling, emerging FinOps practices are not spared the challenges associated with reactive cloud cost remediation strategies. Almost half of respondents (46%) stated visibility into costs associated with FinOps roles remains elusive. Meanwhile, a lack of cloud architecture that supports cost containment at the integration level prevents leaders (35%) from advancing their FinOps cost control initiatives.

Cost mitigation to improve with early integration: Respondents agree (67%) an integration platform that connects apps, data, and people is a game changer for improving cloud efficiencies and reducing overall cloud spend from the solution architecture stage. Among those using integration platform as a service (iPaaS) solutions, 59% report experiencing more effective cloud cost management, 56% report increased data visibility and reporting capabilities across stakeholders, and 50% report improving cloud spend governance.

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