Many businesses have no clue how much they are spending on cloud services

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A new report has found that many organizations are not aware of how much money they are spending on cloud computing (opens in new tab) solutions, missing opportunities to optimize their financial outgoings. The findings raise questions regarding how well businesses are managing their cloud expenditure.

The FinOps Foundation has taken a survey of more than 800 FinOps practitioners – the individuals that are tasked with bringing financial accountability to cloud spending – and found that many businesses are finding the savings of switching to a CapEx cloud model are being rapidly eroded by rising subscription costs.

In particular, it appears that many businesses are struggling to automate parts of the cloud, leaving them cut off from potential savings. Almost half of FinOps respondents admitted that they employed little or no automation in managing expenditure on services such as cloud backup (opens in new tab) and cloud storage (opens in new tab). Within those businesses that did use some level of automation, 31% automated notifications, while 29% used automaton for tagging hygiene.

Optimization challenges

In addition, half of the compute public cloud spend was on-demand, which represents the costliest service on offer. Only 13% of respondents said they used spot-use, the most cost-effective option, even though 28% of those asked worked for organizations where it would be an “excellent” option.

Unsurprisingly, many organizations are keen to make cloud spend optimization a priority within their future business finance plans (opens in new tab). With cost optimizations cited by 40% of survey respondents as their biggest challenge.

Some of the biggest obstacles to optimizing cloud spend include difficulties achieving network (opens in new tab) and hardware integration at speed and scale, and enabling reporting around service management (opens in new tab) spend. In order to meet these challenges, it is likely that many firms will see an expansion of their FinOps teams over the next 12 months.

Via ZDNet (opens in new tab)

Barclay has been writing about technology for a decade, starting out as a freelancer with ITProPortal covering everything from London’s start-up scene to comparisons of the best cloud storage services.  After that, he spent some time as the managing editor of an online outlet focusing on cloud computing, furthering his interest in virtualization, Big Data, and the Internet of Things.