APAC companies are fighting wasteful cloud spending, according to a study commissioned by Forrester Consulting. Additionally, cloud cost management initiatives and tools are being introduced too late or without a complete picture of your environment to be very effective.
The new study, commissioned by IPaaS provider Boomi in December 2023, found that 87% of APAC companies had exceeded their set cloud budgets in the last two years, and 69% anticipate that their cloud budgets cloud will be exceeded during the current fiscal year. .
The results come as regional cloud workloads are expected to increase rapidly over the next two years. Workloads for applications in IT operations (51%), hybrid work (55%), software creation platforms and tools (42%), and digital experiences (40%) are expected to increase the fastest.
Challenges of Cloud Cost Management and Optimization Tools
The Forrester Consulting survey, which involved 420 real-time data and cloud decision makers around the world, found that the majority of APAC companies in its survey sample are exceeding their cloud budgets despite the use widespread cloud cost management and optimization tools.
Globally, the survey found:
- Only 10% of companies say CCMO tools fully maximize cloud cost savings.
- On average, a quarter of cloud spending is still wasted among global respondents.
The Forrester Consulting study attributed this to cloud workload growth as tools often only show part of the cost picture after the fact. “They do not enable proactive cost optimization at the cloud architecture level, where choices about service adoption and integrations can have far-reaching impacts on cloud costs,” the report says.
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Issues with timing of CCMO initiatives and tool deployment
Part of the problem seems to be time (Figure A). APAC companies have realized that introducing cost control management and optimization measures too late in the cloud development process creates later difficulties in managing and controlling costs. The study found:
- Only 5% of APAC decision makers report that their cloud cost remediation strategies are as proactive as possible, and only four in 10 contain costs in the solution architecture stage.
- APAC respondents are now prioritizing CCMO tactics in the early stages of cloud development (62%), but most companies lack proactive strategies at the upstream architecture level.
Issues with visibility offered by existing CCMO tools
Organizations say they are having trouble tracking different areas of cloud spend with CCMO tools. Of the set of global survey responses that labeled areas as “moderately difficult” or “extremely difficult,” data management was the most difficult to track with CCMO tools (Figure B).
In APAC, this result was reflected. APAC companies also saw egress charges (charged each time data enters and leaves the cloud) and the time and resources required to build and maintain application integrations as the second and third most difficult areas to track, respectively.
This is due to the lack of visibility at the architectural level, Boomi said. About six in 10 APAC respondents (63%) believed CCMO recommendations were as good as the data their company could provide.
Other problems with CCMO tools
Nearly half (44%) said third-party CCMO tools were not consistent with reporting requirements, while 35% said remediation recommendations given by the tools came too late in the development process.
Additionally, 27% of global respondents said CCMO tool recommendations do not address the root cause of cloud spend in the organization's architecture design, while 19% said they did not trust native CCMO solutions. offered by major cloud providers.
The global results showed that only 14% of organizations have no challenges with CCMO tools.
FinOps practices paralyzed by lack of visibility
FinOps practices have emerged as a key way for organizations to keep cloud costs under control in a cost-constrained environment. The Forrester report notes that the FinOps Foundation in the US has grown rapidly, with 48 of the Fortune 50 companies now participating.
However, FinOps practices are not being as effective as they could be in controlling costs.
The survey found:
- In APAC, 59% of respondents still struggle to gain the cost and data visibility needed to be effective in FinOps practices and roles. Respondents in APAC struggle more than those in North America (43%) and Europe (40%).
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- Respondents in the APAC region also noted that the lack of a cloud architecture that supports cost containment at the integration level is preventing 37% of leaders from advancing their FinOps practices, thereby limiting their ability to control costs. .
Containing cloud spending is a key strategic priority
Reducing cloud spending has become a top priority on global cloud strategic agendas; The only higher priorities mentioned in the report by respondents were executing modernization initiatives and consolidating data for analysis.
However, while APAC organizations are aware that they could optimize cloud costs at the solution architecture level, less than half actually have the strategy to solve the common problems they face that are driving up costs. . Common issues mentioned include excessive storage (52%), lack of integration strategy (44%), and excessive bandwidth consumption (42%).
Modernization and integration is recommended.
Forrester Consulting said modernization and integration were the solutions. “Seventy-two percent of decision makers indicate that cloud architecture modernization and integration initiatives have the potential to transform their company's ability to reduce cloud spend,” the report says.
“Successfully executing these initiatives at the solution architecture level helps avoid unnecessary cloud spend and also allows companies to better align with FinOps best practices, direct resources toward innovation, and improve ROI in the cloud,” he concluded.
