Highlights: Flexera State of the Cloud 2024
Managing spend remains #1 in 2024
Are you surprised?
Flexera’s State of the Cloud 2024 report is out and available, and this year suggests that not much has changed in the landscape.
(**Please go download a copy of the report at the link above if you’d like to read it and have a much more thorough analysis, I’ve taken all the graphics directly from it to write this short list of highlights**)
Here are the top challenges in 2024 according to Flexera:
In terms of challenges spend, security, and expertise remain safely in the Top 3.
Why is that?
Looking at the rate of Cloud Adoption, it’s clear that public cloud platforms are still growing. Azure and AWS are now neck and neck with one another in terms of total usership, with Azure making the most YoY growth among the Big 3 CSPs.
This adoption rate means that new customers are still facing similar challenges upon entry. Although more mature organizations are showing signs of improvement including increased usage of the CCOE and overall adoption of FinOps, the influx of new customers means that there’s still a lot of learning and growing happening.
Early adoption and common themes of organizations moving onto public cloud are also reflected in Top organizational initiatives, provided in the below graphic.
Overall organizational complexity is also increasing. More customers are pursuing multi-cloud and hybrid cloud designs. A possible consequence of this is the increased rate of application siloing, which is up to 57% from 44% YoY (Ibid., p. 18).
More organizations are leveraging FinOps and cloud-native Security tools to straddle this divide.
From my point of view, the tooling available to the average customer has improved significantly the past few years. I think this improvement has allowed many customers to continue to scale in spite of increasingly complex requirements.
One area that saw significant growth this past year was of course Gen AI. This contributed to a larger trend of increased PaaS usage shown down below.
This area of cloud growth is significant, and I expect it to be one of the largest by next year’s report. One area of concern I could see for this is AI Cost Optimization—a topic I hope to cover as we learn more about it. This is fairly new to us too!
While organizations are overspending in Cloud today, they don’t plan on slowing down either.
I suspect many see the investment in AI and some of the unique capabilities of cloud as high ROI. With 31% anticipating growth, the case for cloud is still compelling to many customers.
I’ve talked in the past about repatriation movements, and how customers are seeing value in returning back to on-prem. Echoing this, Flexera’s report indicates that the private cloud is increasing. The clear frontrunner this year was certainly Azure Stack, which I’ve seen take off this past year in the midst of VMware’s acquisition by Broadcom. The uncertainty there made the move to products like Azure Stack far more palatable than any time in the past, and customers are moving with conviction.
I don’t expect to see VMware there in 2nd place for much longer, but in this report, it still is trending highly among organizations. VMware is still a behemoth in the space, and it might take years before we reach stability again. I certainly expect more customers to experiment with private clouds and see what works for their organizations, as many of them still aren’t ready to make use of the full benefits of public cloud and are better suited to maintaining an on-premises footprint.
All in all, the trends in this report indicate more of the same with a few solid improvements over the past year, like the increased adoption of a CCOE and better use of FinOps.
I hope to see organizations successfully take on the challenge of Gen AI this year and get more information about how to do it in a cost-effective manner. I imagine next year’s report will reflect the best and worst of the impacts created by organizations rapidly adopting it. Regardless, we’ll keep you updated!
Also, if you’re interested, please go download a copy of the Flexera report! Thanks.