By 2026, 40% of organizations will reduce the pace of their cloud adoption due to challenges managing increasing public cloud expenditure.

In the Predicts 2024: Unraveling Tomorrow’s Cloud Computing Landscape (ID G00800051) Gartner makes the interesting strategic planning assumption that by 2026, 40% of organizations will reduce the pace of their cloud adoption due to challenges managing increasing public cloud expenditure. Now why is that?

Traditional capacity-centric IT financial management techniques are inadequate in a consumption-based, public cloud context. Many enterprises, unfortunately, fail to transition from these techniques and continue to make fixed, multiyear commitments often paid in advance. This practice limits the key cloud benefits of elasticity and agility, which in turn decreases the overall business value of cloud adoption, if applied not correctly. It seems these organizations are missing a cloud-native strategy: keeping a traditional infrastructure in the cloud and not modernizing to serverless or containerized infrastructure. This limits the true financial benefits of the public cloud: alignment of IT cost to business demand.

Sadly, many organizations are without a dedicated team for cloud financial management, and instead depend on part-time work from multiple IT and business functions. Without dedicated teams, the needed cultural change to a cost aware and sensitive organization will not happen. Because of this there will be an increasing resistance due to the concern for current and future cloud expenditure, which will diminish enterprises’ ability to achieve digital transformation and improve the customer and citizen experience.

An important instrument needed for the cultural change is showback and other relevant forms of expense reporting to highlight where business units are incurring the highest proportion of centrally funded IT expenditure. External resources, such as tooling or (managed) services will help implement these instruments quickly but won’t drive the cultural change needed in the organization.

With Noventiq by your side as the trusted partner you don't have to reduce your ambition! Let’s discuss how we keep the momentum going for you whilst keeping compliance, control, and cost savings.