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Dive Brief:

  • Businesses with high levels of innovation success overall only spend slightly more than those struggling, according to a Deloitte report. While the cloud’s cost-cutting benefit attracts businesses, many are not seeing that upside come to fruition.
  • Nearly nine in ten respondents plan an increase of at least 6% in cloud investment over the next one to two years, according to the report.
  • Over half of businesses surveyed reported that they invested less than $20 million, and two in 10 businesses reported an investment between $20 million and $100 million.

Dive Insight:

Many businesses use multi-cloud to access more tools. However, businesses that struggle to innovate need to do more than just increase cloud options and spending.

The solution to a spend management problem is for businesses to have a plan to prioritize, prepare and refactor applications before moving to cloud.

“The ones that are doing it, right, are the ones that have the time and the resources to plan this out,” Brian Adler, senior director of cloud market strategy at Flexera said. “It’s not just, ‘hey, the data centers closing in six months, throw everything over the wall.’ That’s a recipe for disaster and a recipe for overspending.”

Businesses already transitioning to a cloud-native architecture know that cloud spending is not a new problem. Flexera’s 2022 State of the Cloud report, released in March, found more than eight in 10 businesses reported cloud spending as a top challenge. 

Many businesses find this out on day two of their transition to the cloud, once workloads have moved to the cloud.

“People’s biggest challenges in day two are cost control, security and innovation,” said John Annand, research director of infrastructure and operations at Info-Tech Research Group.

Organizational discipline is an important part of the cloud transition and empowers employees to be more efficient and leads to greater innovation.

“Does it really make sense for every data scientist to go in individually and evaluate each and every one of those?,” Annand said. “Initially, maybe for a while, but at some point, you want to standardize and make sure that you’ve got a consistent platform so it’s easier for people to go faster.”

Businesses struggling to innovate may look to broaden cloud choices by adding another platform. This, in turn, adds extra costs.

While the Deloitte report found leaders of cloud innovation use a multi-cloud strategy, the addition of choices alone does not lead to success. 

“It’s more important that you pick the best services, the things that are able to solve your problems and do so in the most optimal way than the number of clouds,” David Linthicum, chief cloud strategy officer at Deloitte, said.

By AKDSEO