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35% of Cloud Spending Is Wasted – RightScale

Enterprise cloud spending is growing, but much of that money is wasted, according to a recent report from RightScale, which specializes in cloud management.

Some 66% of enterprises surveyed by RightScale say they will grow spending by 20% or more in 2018, according to its 2018 State of the Cloud Report. Some 20% plan to more than double public cloud spend this year. (See RightScale 2018 State of the Cloud Report Uncovers Cloud Adoption Trends.)

But a lot of that money is wasted. Enterprise respondents estimate they're wasting 30% of cloud spend. RightScale's cloud optimization tools put the waste even higher, at 35%, the company says.

For a selection of slides from the report, click the slideshow below:

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RightScale makes cloud optimization tools, so of course it has a vested interest in making financial waste in the cloud seem like a dire problem. For a reality check, I asked my colleague Roz Roseboro, Heavy Reading senior analyst, what she thinks of the finding. Roseboro was the one who brought the report to my attention.

"It doesn't surprise me," Roseboro says. Enterprises are still experimenting with cloud; cost optimization will come at a later phase of implementation. Moreover, enterprises enjoy a significant, big jump in savings from initial migration from legacy on-premises infrastructure to cloud, and they don't think about how much more savings they could be seeing.

"Just moving from on-prem to cloud gives enough of a cost savings that there might not be as much pressure to cut additional costs," she said.

She noted that managing costs becomes more important to intermediate and advanced cloud users, according to the RightScale report. Some 63% of intermediate cloud users and 69% of advanced cloud users list optimizing cloud costs as the top initiative, compared with 58% for users overall.

Other interesting findings from the report:

  • Cloud is virtually universal. Some 96% of respondents use the cloud, and 81% have a multicloud strategy. Organizations are using an average of nearly five clouds each.
  • Security is a challenge for 77% of respondents, with 29% seeing it as a significant challenge. Managing cloud spending is a challenge for 76% of respondents, and 21% see it is a significant challenge.

RightScale conducted the survey last month, polling 997 respondents in enterprises and small and medium-sized businesses.

For the full report see here and here for RightScale's press release: RightScale 2018 State of the Cloud Report Uncovers Cloud Adoption Trends

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Phil_Britt 2/19/2018 | 2:12:32 PM
Surprised it's not more With so many so new to the cloud, it's not surprising that there's a lot of waste. This is typical of using new resources. It will take a while to understand how to make the most efficient cloud investments.
Susan Fourtané 2/20/2018 | 3:19:29 PM
Re: Surprised it's not more I was suspecting that there was some waste. But I didn’t imagine it was this much.
Ariella 2/20/2018 | 3:47:17 PM
Re: Surprised it's not more Am I the only who doesn't think 35% is so much? Organizations always have wasted spending, and I'd imagine that when it is all added up, close to half is wasted.
[email protected] 2/21/2018 | 12:19:04 PM
Re: Surprised it's not more @ Ariella I agree its high but I thought it would be higher since with new technology the learning curve often causes a lot of issues and costs are not known since everything is new. There is a tendency to overspend since the unknown is scary, with experience comes understanding and frugality!
Ariella 2/21/2018 | 12:53:58 PM
Re: Surprised it's not more @maryam yes, I guess you have to know more about something to know what you don't need.
[email protected] 2/23/2018 | 4:53:47 PM
Re: Surprised it's not more So true but so sad sometimes, when you start a new project you often don't know what you don't know. Experience at least tells you what you didn't know!
Ariella 2/24/2018 | 7:24:58 PM
Re: Surprised it's not more @Maryam Quite so. At least then you can progress from unknown unknowns to known unknowns. And while that sounds like you're still in the dark, at least you know that you are in the dark and to be appropriately wary.
kq4ym 2/25/2018 | 7:52:18 PM
Re: Surprised it's not more Yes, surprising but yet really not. Lots of waste as folks move into new areas, especially if the move if fairly rapid. but also of note that security is still a huge issue for most as noted "Security is a challenge for 77% of respondents." Wonder when that will change for the better?
[email protected] 2/26/2018 | 11:25:15 AM
Re: Surprised it's not more @ariella yes the darkness inevitably leads to light. Sometimes it's just a rocky road. I worked on my first web product in the late 90s I learned so much because no one really knew anythig we tried sometimes failed and sometimes succeeded. In the end we made much better decisions in the future.
Ariella 2/26/2018 | 12:39:13 PM
Re: Surprised it's not more @Maryam that makes you a real pioneer! All who followed owe you for suffering through paving the path.
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