2024 Cloud Spending: IT Balances Costs with GenAI Innovations
How are IT leaders managing cloud expenditures to prevent overruns, and are they anticipating increased spending in light of cloud resources needed for Generative AI?
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Most exceeded cloud budgets in 2023; nearly one-third avoided overruns through careful budgeting, monitoring, and resource optimization
Cloud investments are poised to either rise or remain steady, with IT leaders citing reductions as rare
Nearly three-quarters of IT leaders say their cloud investments are set to escalate this year to accommodate GenAI
Most have already added or plan to add augmented analytics capabilities
The majority (69%) of respondents reported budget overruns in their organization’s cloud spending.
IT leaders who indicated their organizations remained within budget (n = 62) attributed it to accurate budgeting and forecasting (66%), proactive spend monitoring (61%), and effective resource optimization (48%).
In 2023, did your organization encounter cloud cost overruns?
n = 200
If your organization did not experience cloud cost overruns in 2023, please select the primary reasons below that best explain why. Select up to three.
Well-defined cost control measures and policies 31% | Adequate visibility into resource usage and spending 31% | Efficient workload placement and resource allocation 19% | Comprehensive cost management tools and solutions 13% | Robust training and awareness on cloud cost management 10% | Other (fill in)* 3% | Don’t know 0% *Other includes: “Have a minimum spend clause in place,” “We overspent on reservations and were able to optimize resources”
n = 62
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Question: Do you plan to make any adjustments to your approach in optimizing cloud spending in the next year?
We have hired a small team to optimize our expenses, reduce unused resources and to work with developers on optimization strategies for long-term cost reduction opportunities.
Question: Anything else you’d like to add about how your IT organization is approaching cloud cost optimization?
Cost controls and monitoring are critical to ensuring we do not overspend.
Cloud budgets either climb or hold steady in 2024
A majority of respondent organizations (68%) plan to increase their total cloud spend in 2024, while 24% intend to keep spending roughly the same.
How does your organization plan to manage its total cloud spend in 2024?
Note: May not add up to 100% due to rounding
n=200
Question: Anything else you’d like to add about how your IT organization is approaching cloud cost optimization?
Our cloud optimization is a critical component of our cost management in 2024. We're still looking at (ways) to ensure that we utilize this solution while effectively managing the run rate.
Cloud spending ramping up for GenAI
68% of respondent organizations will be taking on more cloud spending for GenAI in 2024.
In 2024, considering your cloud spending plans and any impact from Generative AI (GenAI) adoption, which best describes your organization’s approach?
Note: May not add up to 100% due to rounding
n=200
Question: Anything else you’d like to add about how your IT organization is approaching cloud cost optimization?
Our cloud optimization is a critical component of our cost management in 2024. We're still looking at (ways) to ensure that we utilize this solution while effectively managing the run rate.
In their own words...
Question: Anything else you’d like to add about how your IT organization is approaching cloud cost optimization?
There needs to be a strong commercial mindset in the engineering teams to ensure they chase savings and optimisation. Policy and procedure alone does not get you there.
Question: Do you plan to make any adjustments to your approach in optimizing cloud spending in the next year?
We are looking to cut down (the) number of workloads in the cloud that are duplicate/replicating data.
We will be implementing forecasting tools to understand potential needs, and then track usage on a monthly basis to better address overages in a timely fashion.
Respondent Breakdown
