Making sense of multi-cloud: Flexera 2025 State of the Cloud Recap

As enterprises develop and refine cloud strategy, their biggest obstacle is uncertainty. Fortunately, SoftwareOne partner Flexera brings us the State of the Cloud report each year, providing research on cloud priorities, challenges, and trends to chip away at the unknowns. If you’re working on your organization’s cloud strategy, read on for a recap of this year’s report, culled from a survey of 759 cloud decisionmakers and users worldwide conducted in winter 2024.

Multi-cloud continues to dominate

In 2025, many organizations seem to have found their place in the cloud—or rather, their places. Among the survey’s respondents, 70% are embracing hybrid cloud strategies, with data and apps in at least one public and one private cloud, as well as multiple public clouds. In fact, on average, organizations are using 2.4 public cloud providers. While multi-cloud strategies offer access to a wider variety of specialized technologies, according to Gartner, they also present additional challenges in security, complexity, cost, and skills gaps, increasing the need for enterprises to take action to mitigate such issues.

While 56% of organizations are planning to migrate more workloads to the cloud or multiple clouds, for many businesses, the focus is shifting to using the cloud more effectively, with 72% looking ahead to optimizing their existing cloud environments and deployments. The number of workloads migrated as a metric increased significantly from the past year (from 36% to 78%), and cost avoidance made a large jump as well (from 28% to 64%).

Cloud Spend Continues to Increase

Despite optimization leading the list of primary cloud initiatives for the ninth year, cloud costs continue to increase. Managing cloud spend is the top reported cloud challenge among all organizations surveyed, coming in at 84%. Not only did cloud spend increase overall in 2024, a larger percentage of enterprises saw their spend surpass $12 million annually in 2024, 40%, versus 36% in 2023. Spend is expected to grow further in the coming year by 28%.

As the focus on optimization of cloud cost has expanded, waste spent on IaaS and PaaS has decreased, but still remains unhelpfully high at 27% in 2024. Organizations continue to struggle with forecasting, those surveyed exceeding budgets by 17%. To address these challenges, FinOps teams are being tasked with expanded cost optimization endeavors.

Addressing cloud overspend with excellence

Seventy-five percent of survey respondents said top challenges for all organizations include governance, managing software licenses and a lack of resources/expertise. Organizations are approaching these challenges with strategic efforts including cloud centers of excellence (CCOE) and increased focus on FinOps.

The presence of a CCOE increased this year by 6% among all respondents. SMBs’ usage (43%) of a CCOE is significantly less than enterprises’ (74%), but still saw a 14% increase compared to last year’s findings. These numbers are expected to continue to increase as FinOps gains traction across the cloud user community. Respondents indicating that they have a FinOps team that does some or all of cloud cost optimization tasks increased from 51% to 59% this year.

AI

This is the first year GenAI was included as an option for public cloud services used by all organizations, and it’s currently being used by 50% of respondents, which is the largest value ever recorded for a new service added to the list. 79% of organizations are already using or experimenting with AI and ML PaaS services. Findings also indicated that:

• 72% of organizations already use GenAI either extensively or sparingly, and another 26% are currently experimenting. Basic arithmetic tells us this is almost everyone, suggesting that AI governance and cost controls must be an evolving priority.
• Usage of GenAI public cloud services increased significantly from 47% using it last year (either sparingly or extensively) to 72% this year. Additionally, the respondents who said they don’t use GenAI dropped from 14% last year to just 1% this year.
• 26% report intelligent workload placement in their multi-cloud architecture.