AI projects are further increasing the cloud bill for organizations. Added to this are the problems of wasted licenses and Shadow IT, so that cloud cost management becomes unmanageable, prompting organizations to repatriate part of their environments.
Companies are struggling to manage their cloud costs, this is not news. But the situation has deteriorated further with the rise of GenAI, according to a Vanson Bourne study of IT and financial managers*. Almost all respondents report a sharp increase in their cloud spending. In one year, these costs have increased by 30% on average and, for three-quarters of managers, cloud expenses have become unmanageable.
AI and GenAI are the first two reasons cited by officials to explain this increase in costs. The storage and compute resource requirements for these applications add to the existing challenges of managing cloud costs.
SaaS waste, Shadow IT and complicated chargebacks
Organizations indeed have other challenges when it comes to managing cloud costs. Starting with software in SaaS mode, which accounts for 28% of the cloud bill on average (on average around $2,500 per employee per year among those surveyed).
In particular, managers struggle to ensure that licenses and subscriptions are used efficiently. Two thirds of managers believe that some productivity software licenses (M365, Google Workspace) are wasted. Another concern is purchases made without the knowledge of the IT department. SaaS tools would thus account for 38% of Shadow IT expenses.
Cloud infrastructure spending also presents challenges. As IT engineers increasingly create cloud environments to develop and deploy their applications, these purchases often lack transparency. For FinOps managers, the allocation (43%) and re-invoicing (53%) of cloud expenses are increasingly complex and time-consuming.
Return on-premise
Faced with rising costs, 95% of managers plan to repatriate part of their environments to private clouds. Even so, most managers believe that on-premises costs are even more difficult to control…
For its study, Vanson Bourne surveyed 250 IT decision-makers and 250 financial decision-makers in the United States. The survey was carried out on behalf of Tangoe, a publisher specializing in technology expense management tools.
