$300 billion in cloud commitments remain untapped, says new Infosys report
Sat 9 Sep 2023
Infosys has found that more than $300 billion in corporate cloud commitments remain untapped. Meanwhile, cloud used for growth and transformation is three times more important to companies than cloud used to cut costs.
The research highlighted the shift beyond storage and cutting costs, to utilising cloud to gain access to new technology and capabilities, enable new revenue streams, and replace or update current systems.
It also indicated that, though companies will continue to invest in cloud, less than half of the committed spend is actually being utilised. While this did not indicate a near-term problem, companies that fail to meet their cloud contracts stand to face higher costs as cloud providers renegotiate contracts.
“As cloud continues to evolve, it’s imperative for organisations to integrate it as a strategic enabler for their growth and transformation. Leveraging multiple cloud providers allows organisations to optimise resources, improve resilience, and access specialized capabilities, which lead to improved efficiency and accelerated growth,” said Anant Adya, EVP of Infosys Cobalt.
The Cloud Radar 2023, by the Infosys Knowledge Institute, surveyed more than 2,500 respondents from companies across the US, UK, France, Germany, Australia, New Zealand, and the Nordic countries.
Based on interviews with subject matter experts and global business leaders, the report highlighted the new sophistication and complexity of cloud, and the subsequent management challenges.
The challenges identified included high cloud spending, poor utilisation, cost management, and siloed decisions:
- Cloud spending remains high: 67% of companies increased cloud spending this year, and 80% intend to raise their spending next year
- Utilisation: Only 47% of current cloud commitments are utilised, over $300 billion in corporate cloud commitments remain untapped
- Cost is a headache: Roughly 50% of companies struggle to manage their cloud costs
- Cloud is complex: Nearly two-thirds of respondents (65%) use three or four cloud vendors, a 75% increase over the proportion who used three or four providers in 2021. Over the past two years, the proportion of companies using a single cloud provider has decreased from 21% in 2021 to 7% in 2023
- Companies unable to control cloud deployments: 43% of companies report having unclear policies regarding the department or function head authorised to deploy cloud resources
- Cloud decisions are siloed: For nearly half (45%), either the IT department alone or business leaders alone decide which cloud technology to deploy or how to manage cloud compliance
But cloud still matters, as 73% agree that cloud migration achieves objectives, which drives further cloud interest and investment.
The Cloud Radar 2023 report suggested three strategies of success:
- Master monitoring and prediction: Establishing guardrails for governance and costs is paramount as complexity of cloud grows with the addition of technologies such as generative AI, IoT, and more
- Embed the business case into cloud: Forging a transparent, agile, collaborative relationship between IT and business helps drive accountability and improves ROI
- Adopt a value-centric cloud operating model: An updated operating model will enable teams to track value flow, create alignment, and encourage engagement around measurable goals.
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