Key Takeaways:
– By 2024, companies are projected to waste $135 billion on unnecessary cloud resources, equating to 30% of global public cloud spending.
– FinOps service providers are stepping up to help businesses salvage cloud funds.
– A rise in the cloud bills of 21% year on year has been recorded among organizations spending over $1 million per month on the cloud.
– Cloud cost savings are a top priority this year, as per Flexera’s 2024 State of the Cloud Report.
– FinOps vendors such as Zesty and nOps are offering tools to better manage cloud storage and compute spending.
Cloud Spending: Performance vs Cost
Based on a forecast from Gartner, businesses worldwide will waste approximately $135 billion on cloud resources by 2024. This wasted expenditure represents a whopping 30% portion of the anticipated worldwide public cloud spending of $675 billion. While this financial drain paints a dismal picture, hopeful developments are underway as a host of FinOps service providers strive to help customers rescue their cloud dollars.
Historically, the appeal of the public cloud lay in its cost-saving potential and agility. Companies turned to cloud resources to offload their dependence on the costly procurement and maintenance of infrastructure. This strategic move freed up funds and time, enabling businesses to focus on their core operations.
The Shift of Cloud Utility
Over time, the unique selling points of public cloud have shifted, with speed and convenience now acting as key pillars. This level of accessibility perfectly matches the requirements of startups and rapidly growing companies. They can quickly scale their resources to meet their evolving needs without committing substantial funds upfront for storage and compute infrastructure.
However, this ‘on-demand’ public cloud model is not always economically viable, particularly for larger or slow-growing organizations. These firms are prone to overpaying if they don’t fully exploit this instant scalability feature or inaccurately predict their storage or compute requirements. This over-provisioning becomes more noticeable where storage is concerned.
Concern Over Escalating Bills
Businesses’ cloud bills have skyrocketed in recent years. A recent report from Flexera unveiled a 21% annual increase among organizations that spend $1 million or more per month on the cloud.
Forrester, in its recent Budget Planning Guide for 2025, issued sage advice to technology executives, urging them to “ruthlessly automate manual tasks” as a way to slash the spread of cloud expenses.
The criticality of cost savings in the cloud domain has been underscored as the top priority for this year in Flexera’s 2024 State of the Cloud Report. The analyst group further encourages organizations to “Stop independent cloud spending by establishing a clear FinOps practice”.
Enter Finops Providers
To aid in these cost savings and optimization efforts, FinOps vendors like Zesty and nOps are stepping up to the plate. Zesty helps clients manage their AWS cloud storage and compute spending by offering tools like Zesty Disk. By partitioning the initial ordered storage into multiple blocks, Zesty Disc effectively enables businesses to modify their storage needs on the fly. According to Omer Hamerman, Principal Engineer at Zesty, this approach paves the way for up to a 60% reduction in storage costs.
Another cloud cost-saving solution provider is nOps, whose mission is to furnish customers with “complete visibility” of their AWS costs by providing real-time insights on reserved instances and the AWS Spot market. Over the past 18 months, nOps has successfully saved its customers over $1.5 billion in AWS expenditure and grown its customer base by an impressive 450%.
In conclusion, the escalating need for more cost-efficient cloud resources has brought FinOps providers into sharp focus. By integrating these dedicated service providers’ expertise, businesses can significantly reduce overspending and optimize their cloud resource utilization.
