Dive Brief:
- In the rush to escape cumbersome legacy systems, organizations generate technical debt in their cloud deployments, according to a SoftwareOne report published Thursday. The cloud software company surveyed 600 IT leaders.
- While over 90% of CIOs expect IT spending to increase this year, 83% feel pressure to stretch their budgets. Cloud is the primary driver of IT spending, 9 in 10 respondents said.
- In addition to digital transformation costs, CIOs most commonly blamed cloud budget overruns on inflation-driven price hikes, expiring vendor discounts and workloads that exceeded planned capacity, the report found.
Dive Insight:
Hastily executed cloud deployments can have immediate returns. But inefficiencies, technical debt and poor planning catch up with organizations over time, and CIOs are left holding the bag.
Nearly three-quarters of respondents admitted that technical debt is hampering enterprise modernization, according to the report. More than one-third blamed the problem on rushed cloud migrations during the pandemic.
Failure to optimize workloads prior to migration was a common misstep, according to the survey, which also found that many organizations underestimated future cloud usage and expenditures.
Companies are getting value from cloud investments, but they are concerned about cost overruns and lack of spending controls.
As cost surpasses security as the leading cloud concern, IT leaders have turned to FinOps processes to rationalize usage and optimize existing deployments. Four in 5 respondents said they plan to increase investment in FinOps this year and 2 in 5 are prioritizing better governance to improve efficiency and reduce cost.
Investment in FinOps encompasses tooling, consulting services and, for larger organizations, executive sponsorship, Dan Ortman, global FinOps practice director at SoftwareOne, said in an email. Cross-functional collaboration within the enterprise is also key.
Mapping cloud usage across the enterprise, tagging applications to specific business functions and defining clear governance are core FinOps practices.
The goal is “make sure you have a full view of everything that’s being spent and who’s spending it,” Brian Adler, senior director of cloud market strategy at Flexera, said in an interview with CIO Dive.
IT leaders can then look to economize data and compute costs through discounts most providers build into service contracts. Nearly two-thirds of companies do not take advantage of these provisions, according to a Wednesday Flexera report.
Continued migration to cloud from data centers remains critical to reducing IT costs, 2 in 5 respondents to the SoftwareOne survey said. Roughly the same number believe cloud native services will help reduce software licensing costs.
