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Embracing complexity: A recap of the 2024 Flexera State of the Cloud Report

SoftwareOne blog editorial team
Blog Editorial Team

In this recap of the 2024 Flexera State of the Cloud Report, we discuss the key findings on the current state of cloud computing. From the rise of multi-cloud strategies to the challenges in workload migration and cost optimization, we explore the trends that are shaping the way organizations approach cloud adoption and management. Read on as we dissect the results of the report, offering a comprehensive overview of the trends and implications for businesses in today's dynamic cloud landscape.

The multi-cloud movement

As the cloud becomes an increasingly integral part of our digital infrastructure, organizations are moving away from single-provider solutions. According to the latest Flexera State of the Cloud Report, an overwhelming 89% of organizations now employ multi-cloud strategies, reflecting a modest yet significant increase from the previous year. With 73% utilizing hybrid cloud environments, it's clear that the versatility and robustness of multi-cloud adoption are winning over the enterprise space.

While the benefits are clear, the transition to a multi-cloud environment is not without its challenges. Security and cost optimization remain top concerns, with enterprises seeking innovative solutions to manage their cloud expenditures effectively while safeguarding their data across multiple platforms.

Migration and management: A balancing act

Migrating workloads to the public cloud is no trivial task. Top challenges organizations face include understanding application dependencies, assessing costs, and the technical feasibility of such migrations.

With understanding app dependencies as the number one challenge, it suggests organizations are facing organizational preparedness and IT complexity challenges. This could include having a lack of documentation, technical debt, skill gaps, or migrating customized/legacy systems. High dependency challenges often indicate the presence of heavily customized systems or legacy applications – since these systems are harder to migrate due to their unique configurations and may not have direct equivalents in the cloud.

2024 Flexera state of the cloud report

The rise of cloud financial management

Organizations are showing no signs of reducing their cloud spend, with nearly a third of respondents allocating over $12 million annually to public cloud services. This upward trend in spending emphasizes the growing reliance on cloud infrastructure across various sectors.

Despite the upward trend in cloud expenditure, organizations are adopting a more deliberate approach to managing their cloud costs. The report signals a proactive shift in managing cloud costs with over half of the organizations having a FinOps team in place. This strategic move emphasizes the complexity and significance of cloud cost optimization, which 51% of respondents pointed to as a primary concern and 27% indicated that a FinOps team is on the horizon. Moreover, optimizing current cloud utilization remains a top priority for 71% of respondents, showcasing a strategic dedication to enhancing operational efficiency.

The leading cloud providers: A duopoly

Public cloud is no stranger to enterprise workloads, with over half of the organizations hosting their workloads in the public cloud and an additional uptake expected in the following year. SMBs appear as the highest adopters, though there has been a slight decrease from the previous year, indicating a nuanced approach to cloud adoption strategies.

AWS and Azure continue to dominate the public cloud space, with AWS at a 49% usage rate among respondents and Azure close behind at 45%. Google Cloud Platform, IBM Cloud, Oracle Cloud Infrastructure, and Alibaba Cloud are also key players, each holding significant portions of market share and indicating a competitive landscape.

The software licensing conundrum

The complicated dance between cloud costs and software licensing is highlighted in the report, with organizations needing to pay close attention to the implications of their software licensing agreements on overall cloud expenses. Microsoft emerges as the dominant non-SaaS software vendor, which suggests that while many are moving to cloud-native solutions, traditional software giants maintain a strong presence in enterprise IT.

Even so, the adoption of Software as a Service (SaaS) has reached new heights, presenting its own set of governance challenges, especially in cost management. Organizations are increasingly favoring the ease of SaaS offerings, which might suggest a shift in IT strategy to more managed services.

AI and ML: High interest, but slow adoption

Artificial intelligence (AI) and machine learning (ML) continue to dominate discussions and prove to have immense potential. Although widespread adoption is still on the horizon, ongoing experimentation indicates a growing interest, hinting at a potential surge in adoption as these technologies mature.

Prioritizing costs over sustainability

When asked to prioritize between cost optimization and sustainability, companies leaned heavily towards the former. This finding may prompt a discussion on the need for a balanced approach that considers both financial efficiency and environmental impact as cloud technologies evolve.

In conclusion

To summarize, the insights from the 2024 Flexera State of the Cloud Report highlight the importance of strategic decision-making in embracing multi-cloud adoption while effectively managing costs and navigating complexities. The dominance of key providers like AWS and Azure necessitates careful consideration of vendor relationships and software licensing agreements, while the rise of AI and ML technologies presents opportunities for innovation. Proactive financial management, including the establishment of FinOps teams, is crucial in optimizing cloud expenditures. Overall, organizations must prioritize agility, efficiency, and innovation to leverage the full potential of cloud computing in driving business growth and competitiveness.

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Read the full report.

Download the Flexera 2024 State of the Cloud Report exclusively through SoftwareOne to explore the core findings of the Flexera report, as well as to understand the present and future landscape of cloud technologies.

Read the full report.

Download the Flexera 2024 State of the Cloud Report exclusively through SoftwareOne to explore the core findings of the Flexera report, as well as to understand the present and future landscape of cloud technologies.


SoftwareOne blog editorial team

Blog Editorial Team

We analyse the latest IT trends and industry-relevant innovations to keep you up-to-date with the latest technology.